Extent of the Financial Development Crisis, an Evaluation of Structural Adjustment in Côte d'Ivoire, Senegal, and Guinea and What Each Can Learn from the Others
AGUIBOU Y. YANSANÉ
Guinea, Côte d'Ivoire, and Senegal have experienced their share of the development crisis in Africa since the late 1970s. This crisis has been primarily characterized by an endemic shortage of employment opportunities, a soaring inflation rate and the stultification of every activity of life by a plethoric bureaucracy. Agricultural and industrial production has been declining, leading to essential commodities being in short supply. This decline has led to serious disruptions exemplified by coups and coup attempts, especially in Guinea.
In Guinea, the most evident result of the decline in production in the 1970s is the fact that the people have to pay more than the officially controlled prices to acquire kerosene, soap, cooking oil, sugar, rice, maize, and other basic foodstuffs. Imported consumer goods -- shirts, pants, shoes, radios, televisions, transistors, records, bicycles, cars, petroleum -- as well as capital goods cost even more due to the magnitude of inflation and devaluation of the currency.
African governments thought that the most critical causes were exogenous factors such as skyrocketing oil prices, deteriorating terms of trade, and world financial recession, all accompanied by high interest rates and cost of high debt service repayment. 1
Others blame it on indigenous factors such as extreme centralization -- states virtually ruled by single parties -- overvalued currency, state monopoly of trade, and mismanagement of public enterprises. Also cited are lax monetary and price-administered policies emphasizing import substitution rather than export led growth strategies. 2 There seems to be a general agreement between the governments and donor institutions to provide export producers with greater price incentives by the mid-1990s as well as to reduce the role of state in production and marketing activities. They also envision moving toward more privatization of state enterprises or parastatals and liberalization of trade.