The road to serfdom: how Africa is sliding back to servitude

Is Africa trudging the road back to serfdom? Friedrich A. Hayek, the 1974 Nobel Laureate in Economics, wrote in his book, The Road to Serfdom, that central planning systems are the surest way of enslaving people. Asked Hayek, “Is there a greater tragedy imaginable than that in our endeavour consciously to shape our future in accordance with high ideals we should in fact unwittingly produce the very opposite of what we have been striving for?”

With over 50 million Africans living on less than $1 a day, African policymakers have focused on policies that encourage external donor funding to their governments. According to the World Bank, aid inflows to sub-Saharan Africa rose from 3.4% of GNP in 1980 to 16.3% in 1995. These official inflows typically funded basic government programmes, together with all or most of government development expenditures. Dependence on aid has led to African governments virtually ceding the shaping of their economic and social policies to external agencies. Wealthy nations and international institutions such as the World Bank and International Monetary Fund have become the central economic planners for Africa. The end result is sporadic project implementation, corruption, and poor economic performance attributable to inept policies, political tensions as each ethnic community jostles to partake of the “national cake” and disaster unpreparedness due to donor anaesthesia.

At independence, the African leadership was faced with the task of building nations and economic development. Given that the colonialists were mostly capitalists, the African elite sought to embrace socialistic strategies as a way of identifying with the masses. For the past 40 years, African countries have got stuck on the inherited economic systems that rely on production of export of primary resources. Sub Sahara’s share of world trade has declined over this period from 3.1% of world merchandise exports in 1955 to just 1.2% in 1990. The entire continent of Africa accounted for a lesser share of the world’s exports than Belgium, 2.3% against 3%. Agricultural goods and raw extracted minerals form the bulk of the exports.

Africa must urgently move from engaging in reforms to please donors to reforms that will encourage entrepreneurship. Recent developments in Kenya and Africa in general demonstrate that people are suffering from the fatigue of excessive state manipulation. One regime after the another promises to make life for Africans better but in the long run they have all ended up taking away individual liberties in the name of public safety and/or state security. Frederic Bastiat, distinguished 19th century author of The Law, recognised that government can help secure liberty, but it can also be the greatest single threat to liberty. Said Bastiat, “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another doing what the citizen himself cannot do without committing a crime”.

Our political and economic systems have tended to make people rely on governments for solutions to problems that they should and can solve on their own. Bastiat points out, “ No one would have any argument with government, provided that his person was respected, his labour was free, and the fruits of his labour were protected against all unjust attack. When successful, we would not have to thank the state for our success. And, conversely, when unsuccessful, we would no more think of blaming the state for our misfortune than would farmers blame the state because of hail or frost. The state would be felt only by the invaluable blessings of safety provided by this concept of government”.

Most of the agricultural activities in Africa take place on patches of impoverished soil tilled by smallholder farmers. 70% of the African population is in the rural areas and depends mainly on agriculture. 60% of Africans are in absolute poverty with 80% of Africa’s expenditure going on food. Repeated attacks by pests and diseases and expensive farm inputs coupled with natural disasters have put this industry in jeopardy. Food crises have exposed Africa to manipulation by wealthy nations that use food aid to further their agendas. Without analysing the long-term impact of their decisions, African policymakers have accepted food aid that further disorients their farming communities, making the continent even more vulnerable.

Extraction of mineral wealth, instead of making Africa wealthy, has turned into a curse. Gold, Copper, Uranium and Oil wars in the Congo, oil and water wars in Sudan, diamond wars in Sierra Leon, clan land wars in Somalia, to mention but a few, have devastated a big section of the continent. It has also led to thousands of innocent people being displaced as refugees, family lives being disrupted and government systems destroyed. The conflict situation in Africa has made it difficult for strong institutions to be put in place that support predictable and enforceable laws. This has not only made it difficult for African entrepreneurs to prosper but also for African countries to attract external investment.

Due to constant political instability and lack of security in office, African ruling elites tend to concentrate on looting, banking the proceeds outside of Africa. This breeds short-term policies meant to satisfy the regime in power without ever focusing on establishing conditions that will benefit future generations. Lack of proper institutional systems in Africa makes it difficult for individuals to explore new knowledge and utilise their potential to the full. Hayek observed, “Only since industrial freedom opened the path to the free use of new knowledge, only since everything could be tried – if somebody could be found to back it at his own risk – has science made the greatest strides which in the last 150 years have changed the face of the world”. In Africa, entrepreneurship is frowned upon by political elites who fear potential rivals. Many people are made to focus on salaried employment because commercial enterprise is viewed to be immoral and exploitative. In Africa, anyone who employs a hundred people will be seen as an exploiter but if he is put in command of the same number of people he will be viewed as a respectable member of society.

Unless Africa wakes up to the reality that international relations are driven mostly by commercial gains, it will be difficult for her to fit into the global economy. In market economies, the consumer is king; this was well illustrated when Kenya’s tourism industry ended on its knees due its inability to honour the demands of the consumer..

In essence, African government systems have become agents of dislocation and creators of vulnerability for their own people. They respond to the wishes of the donor community rather than to the views of their own citizens. Rather than strengthen the productivity of the agricultural sector, they provide food aid to farmers. Rather than strengthen their economies to enable Africans to afford drugs, they ask for free medicines for the sick. Rather than focus on increasing the volume of trade with the developed world, they focus on asking for donor funding. Instead of allowing communities to manage and benefit from wildlife resources they protect the wildlife according to western environmental practices. If Africans are not already enslaved they are steadily and surely trudging the road back to serfdom.

Author: James S. Shikwati is the Director of the Inter Regional Economic Network (IREN) based in Kenya. This article may be reprinted without prior consent but with acknowledgement. The views expressed in the article are the author’s and they are not necessarily shared by the members of the Free Market Foundation.

FMF Article of the Week\15 July 2003

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