The economic crisis currently confronting African countries has led to an almost universal embrace of neo-liberalism, both in terms of explanation of causes and as a solution. At the core of neo- liberalism is the assumption that the crisis can only be understood within the context of the role of the state and the functioning of markets. In short, the neoliberal paradigm posits that the fundamental explanation responsible for the economic crisis in African economies is the excessive state regulation of the economies which, among other things, distorts the process of economic development and leads to inefficiency in the allocation of economic goods. It is further argued that this situation can only be overcome through the reduction in the role of the state and allowing market forces a free reign in the allocation of resources (Dibua 1998).
The international financial institutions (IFIs) have become the primary instruments for the implementation of the neo-liberal agenda in Africa. The neo-liberal prescriptions are embodied in the stabilization and Structural Adjustment Programs (SAPs) of these institutions. There is no doubt that the worsening economic crisis in Africa, particularly the unsustainable debt burden, has created the opportunity for the Western capitalist nations and the IFIs to collaborate in imposing neo-liberal policies on African countries. For example, both the I.M.F. and the World Bank demand that African countries adhere to the implementation of stabilization and adjustment programs before they can obtain loans from these institutions or have their debts rescheduled or forgiven.
Confronted with poor terms of trade with developed capitalist countries occasioned by the unfair trade practices and unequal terms of trade and protectionists tendencies, majority of African countries south of the Sahara have been forced to embrace neoliberalism as a panacea to their debilitating economic problems. It is important to note that externally imposed neo-liberal policies have been portrayed as the only credible solution to the African crisis. In spite of the fact that for almost two decades the implementation of structural adjustment has resulted in the worsening of the economic crisis of African countries the proponents of the programs insist that there are no alternatives to them. Even when they acknowledge some of the flaws of SAPs (Stiglitz 2002), they instead place most of the blame on African countries, which are accused of either not having the “political will” or creating “the enabling environment” necessary for the successful implementation of the programs (World Bank 1989; Hussain and Faruqee 1994).
However, while the adverse impacts of structural adjustment have made it difficult for even the most optimistic proponents to ignore their shortcomings and have clearly exposed their inadequacies, the question of their relevance has remained contentious. Some proponents have continued to blame internal factors for the failure of structural adjustment programs. They have insisted, for example, that African countries are so “hemmed in” (Callaghy and Ravenhill 1993) or so “lost between the state and the market,” (Callaghy 1994) that they have no credible alternative to SAPs. There is now a kind of acceptance among liberal scholars and policy-makers that the absence of an alternative to structural adjustment is an ideological triumph of neo-liberalism throughout the world, (Biersteker 1992), a situation which Francis Fukuyama has described as ‘the end of history’(Fukuyama 1991).
What then has happened to the socialist alternative, especially the one informed by the works of Karl Marx and V.I Lenin? There is no doubt that socialism in Africa is on the retreat. The collapse of the former Soviet Union in 1989 and the apparent economic triumphalism of neoliberalism dealt a death blow to a credible discourse on socialism, especially Marxist socialism. Everywhere Marxism and socialism came to be associated with vanguardism, authoritarianism and excessive state intervention. Admittedly, many African dictators used the language of Marxism and socialism to deny their people basic freedoms and indulged in excessive and wasteful spending of state financial resources, including suppressing of their own people in the name of workers’ or poor people’s power and looted the treasuries of their countries by stashing funds in foreign bank accounts. Many met with brutal and violent overthrow at the hands of pro-democracy and pro-reform movements and have had to flee the country of face certain death or prosecution for excesses against their own people (Southall, R and Henning 2006). While applying the neoliberal option, the economies collapsed under the weight of widespread state corruption and cronyism. Can Africa be said to be a worse case scenario of economic development?
2 III Conferencia Internacional La obra de Carlos Marx y los desafíos del Siglo XXI – Neo Simutanyi