ABSTRACT
The economies of sub-Saharan Africa (SSA) have gone through major changes over the last three decades. The import-substitution strategy in SSA had much in common with similar strategies pursued in other regions in the developing world: quantitative control on imports to protect the balance of payments, even while high tariff barriers and overvaluation of currencies sought to favor the domestic manufacturing sector expanding in the internal rather than the world market. This bundle of policies often went hand in hand with vigorous state participation in economic activities, including state ownership of some manufacturing enterprises, and large public expenditure creating serious budget deficits. The economic crises which some of these unsustainable policies created led in its turn to a reversal of policies. Before the liberalization efforts could take place in a productive way, it was necessary for some of these economies to adopt stabilization policies to bring inflation, budget deficits and balance of payment accounts under control. Stabilization had to follow with structural adjustment of the economies to enable the badly controlled economies to try and develop along more orthodox lines with private enterprise and investment. These programs of structural adjustment were encouraged by international institutions like the IMF and the World Bank, which promised structural adjustments loans in return.
