Talking Drums

The West African News Magazine

Markets Around Africa

Loans need protection

by Ben Mensah

The economies of the non-French speaking West African countries are in a mess due to political instability caused by incessant coups, but the point can also be made that massive French aid to their former colonies outside the IMF/World Bank has guaranteed political stability and consequently economic growth
The acute problems of poverty and drought in parts of Africa, very distinct from the debt burdens of the more developing countries were briefly looked at by the recent summit in London of the seven major industrialised countries. Some concern was expressed but action on these problems was deferred pending the completion of a special action programme for Africa being prepared by the World Bank and which the summitteers believe should provide renewed impetus to the joint efforts of the international community to help.

The picture that emerged from the summit about Africa's problems would however have been different if in addition to the rich nations' realisation of their moral obligation to channel their surpluses to the poor countries, the summit participants had also heeded the French warnings of the risk of food riots and political upheaval if third world countries were blindly forced to adjust to IMF prescriptions.

The French had their own solution:- the need for more OFFICIAL AID and for a boost to world liquidity to help developing countries, more structural lending by the World Bank and adoption of its special programme for Africa, setting up a world cereals stock and pushing ahead with a common raw materials fund.

Socialist President Mitterand is not the first French leader to emphasise the need for more official aid to the developing countries. Before him the various agreements regulating relations between the developed and developing nations were negotiated and signed in either Yaounde in Cameroon or Lome in Togo, both former French colonies with much benefits to the French speaking developing nations.

French endorsement of more official aid to the debt burdened developing countries has sustained their monetary arrangements which make available to the former colonies hard currency to import goods from France.

Following from their colonial policy of assimilation, the French in their paternalistic approach have always ensured that their former colonies gained a better deal than the non French 'colonies' in their negotiations with the developed countries or International Organisations.

An example of this situation is represented by the difficulties encountered by the non-French speaking developing nations seeking to negotiate special economic relations with the European Economic Commission (EEC) in what is now known as the transition from Yaounde to Lome I convention.

Again, French endorsement of more official aid to the debt burdened developing countries has sustained the monetary arrangements which makes available to the former colonies hard currency to import goods with from France.

The French have pursued this policy of official aid in close co-operation with a select group of developing nations at the risk of being labelled neo-colonialists. Yet theirs is a policy which has elevated the former French colonies above the rest of Africa.

In West Africa the special monetary relationship between Liberia and the United States of America which enables Liberia to continue to use the dollar and ensured the prosperity of Liberia over its neighbours also goes to endorse the positive impact of the French policy of official aid towards the developing countries.

Listed among the least developed states are the following former French colonies in West Africa: Togo, Benin, Chad, Guinea and Mali. They are in this category of nations due to their lack of natural resources which deprives them of respectable levels of per capita income.

Above these are countries like Ghana and Sierra Leone which are supposed to enjoy higher standards of living but which have been experiencing endemic rounds of economic hardships and currently Nigeria which is also going through a period of stagnation marked by the formation of long queues by Nigerians looking for basic essential items like soap, sugar etc. at the gates of the department stores.

Whereas reasons are still being found for the problems that confront Nigeria, one need not overstretch his imagination to discover why in least developed Benin and Togo basic essential products-soap, sugar, baby foods, agricultural inputs etc are readily available on the markets but cannot be found in developing Ghana. The answer to this riddle can be found in the determination of countries like Guinea and Mali which opted out of the franc zone at the height of the Ghana-Guinea-Mali Union wanting to return to this Francophone economic umbrella.

It might be argued that the economies of the non-French speaking West African countries, such as Ghana and Nigeria are in a mess due to political instability caused by incessant military coups, but again the point has to be made that massive French aid to their former colonies outside the IMF or the World Bank has guaranteed the political stability of these countries.

From Benin, through Togo, Ivory Coast to Senegal, the governments have not all been democratic yet the French have managed to ensure their survival. The presence of several hundred French troops to protect the regime of Hissen Habre in war torn Chad is a pointer to the determination of the French to pursue policies that protect the official aid they give to the developing world.

On the surface it might appear that the French are paying dearly for their policy towards the developing world and which might account for the difficulties the French economy faces now in its battle to beat down inflation. The French may also be called names such as neo-colonialists, revisionists etc.

But the fact of the matter is that the French are benefitting immensely from the availability of ready markets to absorb French exports. For while in Ghana, Nigeria, Sierra Leone, Japanese motor vehicles like Datsun, Mazda, Toyota have completely taken over roads which were known to Vauxhall, Opel, Austin, Morris etc the streets and roads in Togo, Benin, Cameroon, Chad, Gabon are still choked with Peugeots, Renaults and Citroen.

Aid to the developing nations in any form is not only welcome but needs to be protected against its misuse by governments. IMF and World Bank loans have been found to have been badly lent in the first instance, mis- applied subsequently without any proper supervision, and therefore piled up without serious efforts to resettle them.

The French however have a way of helping their friends in the developing world not to depend too much on the IMF or the World Bank. The French grant official aid which from the records have helped to develop countries like Togo, Ivory Coast, Cameroon, Gabon, Benin etc.

This is why the merits of their solution to the underdevelopment of the developing world through official aid and with less emphasis on IMF and World Bank machinery should have made an impact on the other members of the summit of seven industrial nations in London.

talking drums 1984-06-25 why Ghana is not stable - Nigerian journalist's trial Rotimi