31- African Independence

Independence for many African nations came during the 1960s and 70s, a period of tremendous economic growth globally. The newly independent nations sought to take advantage of the opportunities for economic expansion by modernizing. The assumption was that if they became more industrialized, they would become more developed. However, in order to get started, they needed foreign exchange in order to purchase the goods and services required for the transition.

There were really only two means for them to acquire that foreign exchange. The first was to earn it by continuing to produce and sell the commodity products other countries desired. So even after achieving independence, African nations continued to produce export crops in order to earn the money they needed in order to buy manufactured goods, oil, medicine, as well as military and industrial equipment.

Unfortunately the prices earned by agricultural products go into decline whenever there is a surplus available, while the price of manufactured goods and oil can generally be expected to rise regardless of circumstances. Therefore the purchasing power of commodity exporting nations tends to fall over time. In 1975, a metric tonne of coffee purchased 29 barrels of oil; by 1983, a metric tonne of coffee only purchased 8½ barrels of oil.

Unable to earn adequate foreign exchange by exporting commodities, many African nations took out foreign loans during the 1960s and 70s in order to promote development and to enable them to begin to meet some of their own manufacturing needs. At the time the loans were made, the interest rates were very reasonable. But as commodity prices continued to fall and the costs of oil and manufactured goods rose, so too did interest rates. In the end, the nations of sub-Sahara Africa found themselves with enormous debt burdens which continue to stifle future development even today.

Often the only way in which the African nations were able to raise funds to meet their debt payments was by producing more and more export crops, at times at the cost of depriving themselves of food for local consumption. An often cited example is the case of Senegal. From 1969 to 1974, Senegal suffered one of the worst droughts and famines in modern history. Livestock died in the millions; hundreds of thousands of Senegalese peasants were forced to become refugees. However, throughout this period, large estates in Senegal continued to grow and export fresh vegetables to Europe. And when the price of green beans in Europe fell too low to make importing them from Senegal profitable, the crop was destroyed rather than being used for local consumption.

Another example comes from the 1983-84 drought in Ethiopia and the Sahel region of East Africa, which moved the people of the world to undertake one of the largest fund-raising efforts for famine relief ever attempted. Ironically, during that same period, cotton exports from the Sahel actually increased. There were productive farms in the region at the time, but they were producing cotton for export rather than food for local consumption.