The African state must play a larger role in the
economy and seek to protect fledgling industries or
globalization will torpedo the continents huge
development challenges, leading experts warned in Abidjan on
Nigeria central bank governor Lamido Sanusi said: The
state needs to be a powerful last line of defence against the
We need a new paradigm to defend our interests, and
challenge the paradigm that has been imposed upon the third
world by the West.
African policy-makers are taking stock of the regions
development model after the financial crisis turned economic
orthodoxy on its head.
Sanusi said the West has lost moral authority, after decades
of preaching to the developing world the virtues of
conservative economic policies and then ripping apart their
free market bibles in the crisis.
He blasted the neoliberal policies advocated by the
so-called Washington consensus, which touts free markets,
fiscal prudence and financial liberalization.
The comments, at an AfDB seminar on Rebalancing the Role of
the State and Markets, were a shot across the bows of
politicians and businessmen who have pointed to Africas
economic outperformance in the past year as evidence of its
rise in the global pecking order.
Sanusi said: World trade has grown and Africa
has benefited. But this growth has been disproportionately
skewed to the rich, creating huge [income] disparities and our
whole development strategy needs to be
Alioune Sall, executive director at African Futures
Institute in South Africa, said: The crisis has shown
that Africa needs to develop its own growth model and
neo-liberal model no longer holds sway.
Sanusi said the liberalization of Africas young
industries has exposed and destroyed local manufacturing
capacity and exacerbated the continents unemployment.
We have exposed our young, immature industries to
mature markets, and we get battered. The Chinese will batter
our markets; the Indians will batter us. The Americans will
batter us. It is time to ask: why are we sending our young
forces to battle with these bullies?
But the irrepressible power of globalization will force
African policymakers to pay homage to market forces and enforce
greater liberalization, said Gudrun Kopp, parliamentary state
secretary to Germanys federal minister for economic
cooperation and development, told the seminar.
Its not a question of state or private sector.
We need to balance the two, she added. The most
important challenge is good governance.
Africas lack of fiscal and monetary capacity limits
the states ability to be a provider of goods and
services, AfDB chief economist Mthuli Ncube said. Rather than
ideological debates, he advocated stronger public financial
management and beefing up tax revenue collection.
The state in Africa has historically been vilified as either
weak, over-dominant, repressive, or too dependent on foreign
powers. But in the global bull run, a growing pack of economies
embraced conventional macroeconomic policies. Sanusi said
post-crisis fallout should trigger a structural shift in
Africas economic model.