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October 1995

Recent demonstrations in Ghana show that there is no future for Africans under structural adjustment. John Pender of Africa Direct reports

'You may as well kill me now'

'Kume preko' was the banner under which around 100 000 people demonstrated through the streets of Ghana's capital city Accra in May this year. A new tax that increased prices by 17.5 per cent was introduced under severe pressure from the International Monetary Fund and the World Bank to raise revenue as part of Ghana's structural adjustment programme. 'Kume preko' meaning 'You may as well kill me now' sums up the 12 years of intensifying impoverishment under structural adjustment,
Every year since 1983 has been one of biting austerity - the consequence of the standard structural adjustment prescriptions like public spending cuts and devaluation. These 'adjustments' are designed to open up the economy for foreign investment.

Ghanaians are still waiting for the miracle of the market to occur, in the meantime every aspect of survival has become infused with the insidious World Bank philosophy of privatisation. In Ghana you now pay for everything - clean water, primary education, basic health provision. One placard on the protest read, 'A meal a day is a dream in Ghana'.

The primary impulse for structural adjustment was to insulate the economies of the West from the destabilising consequences of the debt crisis of the early 1980s. In particular when Mexico declared a moratorium on debt repayments in 1982 the whole Western banking system seemed to be at risk. Through the World Bank and the International Monetary Fund, Western governments moved to ensure that debt repayments to the West became the top priority for Third World governments. Today weak Third World economies have no independence and there is a significant net transfer of wealth from the majority of Third World countries to their Western 'creditors'.

The West has also used debt as a lever to exert tighter control over the Third World. For example, under what the IMF calls 'enhanced surveillance', specific targets are set for Ghana's economic policy. The World Bank's confidential Country Assistance Strategy for 1996-98 reportedly specifies that alongside significantly increasing tax revenue, 'a significant downsizing of the current [civil] service must be an integral aspect' of the Ghanaian government's economic programme.

Third World debt is explicitly used as a means of coercion and control. Despite the fact that the World Bank goes through the motions of drawing up specific 'assistance strategies' for each indebted country, each strategy is the same as the next: privatisation, reduction of public sector wages and welfare payments. Loans come with stringent conditions attached. Ghana lost $300m in promised loans and grants in 1994 because it delayed privatising commercial banks and state cotton enterprises. There are similar threats for 1995. As Kwesi Botchwey, longstanding Ghanaian finance minister until May this year, recently told Africa Report: 'You are supposed to undertake a certain policy; you don't do it for reasons that are often explainable; because you don't do it, resources are denied and the economy gets destabilised. It's a vicious circle.' A resident IMF representative sat across from Botchwey's office monitoring the implementation of structural adjustment.

Paper tigers

Structural adjustment was supposed to lead to the emergence of 'African tigers' to match the tiger economies of east Asia. But in fact during the period of structural adjustment sub-Saharan Africa has become further marginalised from the world economy.

The only sector of Ghana's industry to have taken off under structural adjustment reforms is gold mining. In what has been termed Ghana's 'second gold rush' production has risen from 287 000 oz in 1986 to an anticipated 1.6m oz in 1995. Gold overtook cocoa as Ghana's leading export in 1994. Yet the dynamism of this sector is unlikely to have much impact on either the lives of ordinary Ghanaians or the capacity of the economy to reduce its vulnerability to the fluctuations of the world market. Strongly encouraged by the International Finance Corporation - the investment arm of the World Bank - control of gold production has shifted dramatically from the Ghanaian government to British, American and Australian companies.

Also any revenues received by the government are now, under structural adjustment obligations, more likely to be used to balance the national accounts or pay off foreign debtors than benefit ordinary people.

Mystery minister

'You may as well kill me now' is a fitting slogan. The World Bank's most optimistic projection is that it will take 50 years for the average Ghanaian living in poverty to break out of it. But the World Bank's assessments are notoriously optimistic. While its own assessments indicate that between 31 and 40 per cent of Ghanaians live in poverty, more objective analysts have challenged the definition of poverty used by the World Bank.

Even the best-paid Ghanaians struggle to survive. As one Unicef survey concluded 'no household can survive on one minimum wage and virtually none maintains even moderately acceptable living standards on any public or most private sector salaries'. A 1985 survey of the Accra suburb Nima-Maamobi showed that spending eight times the minimum wage, households would still meet less than 30 per cent of World Bank estimates of the cost of an acceptable diet. Malnutrition is common even in urban areas, along with overcrowding, squalor and lack of access to basic services. Recent reports indicate that hospitals in Accra are now turning away people who cannot make a downpayment.

Ghanaians protest that, instead of going through the formalities of structural adjustment, 'You may as well kill me now'. But there is a consensus in the West that adjustment is necessary. Oxfam is one of the most radical non-governmental organisations working in Africa. The Oxfam Poverty Report's assessment of structural adjustment opens with a quote from Kwafi Akoor, finance minister, Ghana: 'There is only one thing worse than structural adjustment; and that is not adjusting.' (June 1995) In fact, there is no Ghanaian finance minister called Kwafi Akoor. Oxfam was obviously too eager to preface its own case for adjustment with the legitimacy of an African voice to pay attention to mere facts.

Despite having been critics of the World Bank in the past, Oxfam says today that the idea that failure to adjust hurts is 'uncontroversial' (p78) and that adjustment is 'unavoidable' (p76). It argues that there are 'no ready-made, painless solutions' (p73) before coming up with its own 'Alternative Framework for Structural Adjustment' (p103).

Behind Oxfam's conversion to structural adjustment is the widespread belief that there is no alternative to the free market. At the same time, most of the non-governmental organisations have accepted that the problems faced by African societies are a consequence of their own political structures, instead of being a result of their relation to Western imperialism.

Oxfam austerity

Criticism of structural adjustment has been reduced to the level of policy advice to the World Bank. In many ways the whole of Oxfam's Poverty Report is an open letter to the World Bank making the case for more intensive intervention. Oxfam argues that the Bank should adopt an expansionary approach to the economy, but it does so without much conviction. However, you certainly get the impression Oxfam thinks it can influence the World Bank in other ways. It complains to the World Bank that public sector reform in Zimbabwe has been 'spectacularly' slow and that subsidies to the steel industry and other parastatal concerns have not fallen. It points to the 'misallocation' of resources in Africa - meaning that the money has been spent on urban hospitals and higher education.

Once adjustment is accepted, the only area for debate is about how to mitigate the social costs of adjustment. Oxfam says the World Bank 'has made genuine efforts to persuade governments of the need to protect social expenditures' and that 'to its credit, the World Bank has attempted to establish agreements with governments'. However it complains that 'non-compliance has been tolerated in a manner which would be inconceivable were it repeated in relation, to say, money supply or credit control'. But this is a confused argument. How can Third World governments protect social expenditures at the same time as reducing spending? These absurd demands are a transparent attempt to vilify Third World governments while taking on the mantle of protector of the poor. The one thing that Oxfam and the World Bank are in complete unanimity upon is that these countries cannot be allowed to determine their own policies.

The support of non-governmental agencies is welcomed by the Bank. In the mid-1980s an average of 15 per cent of World Bank projects involved NGOs in design and implementation. In 1990 and 1991 it was 57 per cent. Almost one third of World Bank projects involving NGOs are ostensibly delivery of services to ease the effects of structural adjustment. The World Bank has set aside $30m for 1996 to encourage participation in every World Bank project and programme.

Today, the former critics of adjustment are more likely to be involved in its implementation than in opposing it. The only way to check this trajectory is to start by challenging the assumptions of the reconciliation with adjustment.

The Africa Direct campaign has launched the Challenging Adjustment project which has started with a focus on Ghana. Through a network of people based both in West Africa and Britain we are building up a picture of the consequences of adjustment. By exposing the truth about Africa's marginalisation and the mechanisms of Western influence within Africa we are attempting to formulate a real alternative to adjustment - one that puts Africans in the driving seat. If you think you can contribute we want to hear from you. Contact John Pender by e-mail:, or c/o the Campaign Against Militarism: CAM, BM CAM, London WC1N 3XX; phone (0171) 278 9908; fax (0171) 278 9844

Reproduced from Living Marxism issue 83, October 1995