“Redefining Afrika’s Political Identity in the Era of Globalisation”- 2nd Mayihlome Annual Lecture

The World Bank Poverty Report of 1990 defines poverty as “the inability to attain a minimal standard of living”. This definition hinges on three aspects:
• A measurement of the standard of living;
• A clear conception of a minimal standard of living; and
• Encapsulating the severity of poverty in a single index (World Bank, 1990:25).

However poverty surpasses concrete living conditions and material circumstances to encompass access to processes, to tools and instruments that effect meaningful transformation. Poverty is an interlocking, multidimensional social phenomenon. Poverty can be defined as pain, as daily humiliations, as inability to make qualitative choices – such as whether to use limited funds to save the life of a family member, or use those same funds to feed their children.

Trade and Industrial Policy after the colonial period

At another level, the trade and industrial policy pursued during the late colonial period was aimed at responding to emerging structural shifts in the local and global economies that also translated into social and political pressures for an acceleration of the development of the colonial economies. These pressures were aimed at moving the post- 1945 colonial economies beyond the simple production and supply of raw materials, and ensuring that they occupied a higher position in the international value chain that would at least begin more effectively employ the expanding pool of skilled labour available in the colonies.

It was out of the trade and industrial policy of the late colonial period that the earliest experiences of industrialisation, most of it in simple, light manufacturing activities, emerged in various parts of Afrika. The basic trade and industrial policy framework developed in the late colonial period was carried over into the post-colonial period and fed into various national strategies that were aimed, among others, at accelerating the development of the local economy, attracting domestic and external investment, promoting the home market, encouraging local research and development, achieving accelerated technology transfer, reducing import dependence, achieving rapid industrialisation, and increasing local content. As in the late colonial period, the state assumed a key role in the definition and operationalisation of trade and industrial policy; indeed, within the context of the state-led model of development which Afrikan countries followed after independence, the state played a commanding role which also entailed various degrees of central planning. Within this framework, trade and industrial policy involved the state both as leading actor and a prime facilitator. As actor, the state took a direct role in investing in the economy, especially in large-scale agricultural projects and industry.

As facilitator, it offered various incentives to private investors and partnered with them as necessary in order to achieve its defined objectives of accelerating local development. The tariff regime was central to the trade and industrial policy and it was underpinned by a philosophy and an incentives structure that sought to discourage the importation of a range of simple consumer goods, facilitated the importation of intermediate and capital goods, and protected local infant industries. The consumer goods whose importation was allowed were brought in either on the basis of temporary waivers to address specific national exigencies or were subject to heavy duties that aimed at ensuring that they did not squeeze locally-made alternatives from the domestic market. Subsidies were also employed to reinforce aspects of the tariff regime put in place as were tax holidays granted to investors in the manufacturing sector.

As post-independence commitments to economic cooperation and integration among Afrikan states gathered momentum, the tariff policies that were pursued were also adapted to accommodate Afrikan cooperation and integration partners. Preferential trade agreements that similarly had a bearing on trade and industrial policy were also concluded by Afrikan countries with major international economic blocs such as the European Union.

If trade and industrial policy in the first two decades of independence allowed not only for a central role for the state but also contributed to the growth and expansion of import substitution industries, the state-led model of accumulation within which it was nestled was to come under severe attack in the period from the 1980s onwards.

Locked in and locked out

Within the framework of the structural adjustment programme which they pursued in different Afrikan countries, the international financial institutions pushed for the liberalisation of trade and investments, the generalised opening up of national economies, the removal of tariff walls that cushioned local infant industry, the elimination of subsidies that favoured local manufacturers, the liberalisation of interests and exchange rates, the decontrol of prices, the reversal of the frontline role taken by the state, the dismantling of national planning systems, and the introduction of a variety of complementary measures designed to entrench a free market system, promote an open trade regime, and deepen the role of the private sector in national economic development.

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