Planning for Economic Development in Africa.

Photo by my friends Kerry and Susan, taken while on Safari in South Africa

The 54 countries that make up the continent of Africa are individually rich in natural resources that support their main economic activities.  In addition, the continent has the second largest and youngest population in the world, which positions it as a major world market in the coming years. 

The sad reality, however, is that in the post-colonial era, development planning at the macro-economic level has failed to create opportunities for high economic growth and is often influenced by donor needs and commitments to compliance with international goals, at the expense of sustainable exploitation of natural resources.

For a long time after Uganda’s current president came to power, the planning was based on a 10-point program he had developed during the guerilla war.  This was followed by the Poverty Eradication Action Plan, which was less a plan than a framework focused on privatizing government institutions, through structural adjustment programs. It was not a blueprint for sector activities, but rather an instrument to appease the donor community.  It was later realized that the PEAP had flaws that came with not being an actual plan, and the National Planning Authority was created to revive the national development planning process. 

My previous work with Uganda’s National Planning Authority gave me insight into how complex it can be to create a National Development Plan, given that it requires integrating plans for different sectors with Plans of Action derived from African Union programs and other internationally agreed goals such as the UN Sustainable Development Goals and the African Union’s Agenda 2063. It takes effort to integrate all these goals into a country’s Development Plan, but the good news is many of the goals are overlapping.

Trying to catch up with these rapid changes in plans and programs has, in a way, enticed governments to borrow from international financial institutions such as the World Bank, International Monetary Fund, and from specific developed countries. The inability of many African countries to meet all their budget requirements internally stems from a narrow domestic tax base; high expenditure on public administration; unsatisfactory returns on exports; low foreign direct investment, which could have increased the tax base; and high levels of corruption, especially in tax administration.

As a result, the capacity of many countries in sub-Saharan Africa to develop self-reliant and self-sustaining economies is constrained by challenges of unsustainable debt, energy crises, low human capital development, corruption and lack of accountability.

There have been attempts to improve revenue performance and increase the share of internally generated funds for funding projected expenditures. It is, however, rather difficult to generate revenue from largely informal sectors and small family owned businesses which do not necessarily embrace corporate governance principles.  

One of the ways some countries have tried to become players in the global economy is by becoming members of different regional economic blocs to improve trade. This has also not worked so well for small economies that have failed to position themselves well in the economic bloc. These countries need to identify their main resources, exploit them sustainably and position themselves competitively in the regional and global economy.

It is going to take the young generation to adopt planning processes that support the sustainable growth of African economies, while preserving their ecosystems and tapping into the local markets, as part of strategically positioning the continent for economic growth.

Vivian Birchall

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