Academic journal article African Studies Review

Economic Recovery in Africa: The Paradox of Financial Flows

Academic journal article African Studies Review

Economic Recovery in Africa: The Paradox of Financial Flows

Article excerpt

ECONOMICS AND DEVELOPMENT Vijay S. Makhan. Economic Recovery in Africa: The Paradox of Financial Flows. New York: Palgrave, 2002. 261 pp. Tables. Figures. Appendixes. Notes. References. Index. $70.00. Cloth.

The poor state of African economies is well known, and the fact that they have been struggling for decades has been an issue that has been examined and analyzed by many scholars and organizations. Vijay Makhan has added his voice to this discussion from his past position as the assistant secretary general of the Organization of African Unity (OAU) and now the assistant secretary general of the African Union (AU). His argument is that Africa has lost the benefit of GDP growth in the last two decades of the twentieth century, and that this has resulted in high poverty rates and a decreasing role in both world trade and world production. But just as African nations have adopted reforms and restructured their economies, and just as the UN and others have made a commitment to substantially reduce poverty in Africa, the net financial flows to Africa of all kinds have decreased. he calls this a paradox, although he never explicitly states why. The reader is forced to assume that economic reasoning would indicate that financial flows should be forthcoming when they are not. But this is not really a paradox, since the reasons for the lack of financial flows are many and clear, and the author even lists and evaluates many of them himself.

Makhan examines the economic situation in the first part of Economic Recovery and then adds sixteen appendixes of documents (which take up more pages than the text), some of which he states are available here for the first time. His discussion is very aggregated and consistently treats Africa as a whole with only a few references to individual countries. However, the variations among the countries of Africa are great, and it is very difficult and often misleading to generalize about the entire continent. Nevertheless, Makhan examines in five chapters: (1) the historical performance of Africa from the 1960s to today; (2) the shift of financial flows-aid, investment, capital flight, and loans-away from Africa; (3) the new priorities of aid at the turn of the century; and (4) how aid is delivered. His final chapter concludes that there is inadequate international support for Africa and that Africa needs help to close its finance gap given its inability to raise enough funds domestically. …

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