March 19,1998

Extended families drain potential investment, says economist Dan Otchere
Is Africa being crippled by its cultural value system?

by Divine Agodzo

For years, Economics Professor Dan Otchere has been studying graphs and other economic indicators charting the downhill course of African economies. Now the Ghanaian-born economist thinks policy planners seeking to solve Africa's economic puzzle should take a hard look at its ancient culture to obtain the missing link.

Otchere says an understanding of the culture-economy nexus in Africa may be the key to solving the developmental problems that have plagued the continent for decades.

"Culture means a lot more to the average African than any other aspect of society," Otchere said. "If this is true, can we establish a connection between economic growth, standards of living and culture? I'm trying to examine that relationship, which appears to work in other areas like the Asia-Pacific region, but fails to do so in Africa." Otchere holds a PhD in economic development and monetary economics. He makes no claims to being a specialist in linking culture and economic development, but the economic problems of Africa have never ceased to intrigue him.

"The dismal performance of African economies since independence [in the 1960s] has baffled me a lot," Otchere said. "I am so surprised at the slow economic growth of these countries in spite of the improved quality of life available elsewhere." African countries seem unable to translate economic growth into economic development. There has been some economic growth, expressed in quantitative increases in the gross domestic product (a measure of a country's annual production of goods and services), but improvements in areas like education and health have been impeded not only by inflation and rapid population growth, but also by cultural problems.

Otchere said that almost all of the cultural problems stem from the extended family system, a network of obligation that spreads far beyond the nuclear family of the mother, the father and their children to include grandparents, aunts and uncles, cousins and in-laws.

The extended-family system has obvious social benefits, but in terms of economic growth, it leads to heavy dependence on a single breadwinner, who may be expected to support many relatives. This expenditure drains the breadwinner's savings, capital which could have gone into the banking system to generate economic growth.

Most of this financial support goes into consumption, because of the dearth of investment opportunities on the continent. Indeed, much of the money leaves Africa altogether. "As a result of the extended-family system, the tax base of the society becomes smaller," Otchere said. "This puts a burden on governments, causing deficits, inflation and currency devaluation." Otchere said the way out of the cycle is to take a non-sentimental look at the extended-family system. The McGill-trained economist said he is not the first to point to the culture-economics link, but African politicians and policy-makers have failed to take notice, and will find it hard to legislate against negative cultural practices.

He is quick to point out that he does not advocate a wholesale jettison of African cultural values, and has praise for African arts and music. "Some aspects of African culture can promote development, but the negative aspects outweigh the positive. There is always a net effect, and that is what I am interested in."

Most African countries are now in what he calls a "dual phase" of extended-family and nuclear-family values, a mirror of the coexistence in Africa of two economies, modern and traditional. Otchere said that education, globalization and the encroachment of other cultures will bring about further evolution.

Otchere spoke on the culture-economy nexus to African students at a McGill University seminar on "Business Investment Prospects in Africa," and is working with Anthropology student Kofi Akosah-Sarpong on a paper, "The Role of Superstition and Religion in the Development Process of African Economies."

Copyright 1998 Thursday Report
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