Resource-rich Africa gets little from world trade

National Catholic Reporter, Feb 3, 1995 by Carole Collins

The lined yellow paper is faded, the handwritten note marked by a few spelling errors. But the anguish of Munyaradzi Shoriwa, a would-be student from one of Zimbabwe's rural regions, comes through eloquently clear:

Because of the [1993] drought here in Zimbabwe we have a shortage of food. I left school last year while I was in Form One [seventh grade]. Father's little amount of money is spend on buying food, so there is no money for my school fees. We are buying nothing except for food. All our cattles have died. I am a boy aged 14 year and I am looking forward for your help. Please do your best.

Shoriwa, who signed his letter "yours in great tears of problem," was not writing to a charity. He was writing to the finance ministers attending the International Monetary Fund's 1993 annual meeting. He, like the continent of Africa, is still waiting for that help.

Few regions of the world face as many economic problems as Africa, a resource-rich, conflicted continent, home to more than 900 million people and 32 of the world's 47 poorest nations.

Africa is the only region of the world that ended the 1980s worse off than at the start. Western economists claim Africa enjoys a "comparative advantage" in the global market because of its supply of cheap labor and raw materials. Africa is the world's largest producer of gold, diamonds, cobalt and chrome; it is a major source of oil, coffee, cocoa, other minerals and agricultural goods.

But globalization so far has done next to nothing for Africa. World prices for most of Africa's major exports have dropped steadily over the past two decades. Its share of world trade fell from 3 percent in 1970 to just over 1 percent today. Declining commodity prices between 1986 and 1990 alone cost Africa $50 billion in lost export earnings, more than twice what it received in aid during that period. Meanwhile, the prices of essential imports, like oil and manufactured goods from the industrialized North, have soared.

These increasingly unequal terms of global trade have thrown African economies into steep decline and boosted Africa's debt burden to unbearable levels ($183 billion by 1992, or triple the 1980 level). Sub-Saharan Africa now pays about $10 billion a year to service its debt, almost a quarter of its export earnings. Following a recent proposal by Sen. Mitch McConnell, R-Ky., to cut virtually all aid to Africa, many fear it will become even more marginalized by global economic policymakers, many of whom regard it as unsalvageable, even disposable.

Africa also suffered severely from the 1991 Persian Gulf War. Fourteen African nations lost more than 1 percent of their gross domestic product, a figure that might sound small, but that U.N. economists compare to the losses from a major natural disaster. The losses in Africa were caused by higher oil prices and the loss of foreign earnings, called remittances, sent home by Africans working in the gulf region.

The 50-year-old International Monetary Fund was originally set up at the end of World War II to help nations weather such economic reverses. But, under IMF directives, African nations, like mothers on welfare, have been forced to cut health care and education budgets to repay loans or qualify for further IMF funding. Qualifying means adopting IMF-recommended austerity, budget-cutting and currency devaluation measures, known as a Structural Adjustment Program, or SAP. Those programs have eroded peoples' and governments' purchasing power and become a major source of social suffering and growing social protest.

"Why (is) every Zimbabwean working for fruitless results?" asks Francis Mahurevane from Silveira House, a Catholic training center in Zimbabwe's capital, Harare. "All we are producing is going to feed European countries, who introduced a debt trap to us named SAP."

Mahurevane described the effects of Zimbabwe's SAP: "Zimbabwe is saving for (re)paying its debts. This practically means Zimbabweans will work for years trying to settle the debt while its people starve, inflation going up, poverty, unemployment and discontent being created." Mahurevane's concerns were echoed by several African bishops during a recent U.S. visit (NCR, Nov. 11, 1994).

In late 1993, the British charity group Oxfam joined with others to launch a campaign for African debt relief and urged the West to mount a Marshall Plan to save Africa. This year the Washington-based Africa Faith and Justice Network is focusing on the biblical theme of jubilee, which calls for debts to be forgiven every 50 years.

Debt relief will also be one of the major focuses of the forthcoming U.N. World Summit on Social Development in Copenhagen, Denmark, in March.

In the meantime, Zambia's SAP has already spelled the difference between life and death for Jeffrey Zulu from the Northern mining town of Kitwe.

"I recently lost a baby boy who was born a bouncing baby of 4.5 kg (9.9 lbs)," he wrote to the IMF last year. The child died of malnutrition. Zulu blamed the "SAP, which has made it practically impossible for me to afford the nutritious foods I used to in the past."