Why are many West African countries trying to adopt a free market system?

Answer Details

A free market (or free enterprise) system is one in which the forces of demand and supply, working through the price mechanism, decide what is produced, how it is produced and for whom, with minimal government interference. Many West African countries have moved towards it for the following reasons.

• Greater efficiency: competition forces firms to cut costs and use resources productively, unlike the wasteful, loss-making public enterprises common under state control.
• Failure of central planning: heavy state control produced shortages, inefficiency, corruption and unsustainable budget deficits, so governments sought a market alternative.
• Encouragement of private investment and enterprise: secure property rights and the profit motive attract both domestic and foreign investors, creating jobs and output.
• Conditions of the IMF and World Bank: Structural Adjustment Programmes attached to loans required deregulation, privatisation and reduced subsidies.
• Wider consumer choice and better quality: competition among producers gives consumers more and better goods at competitive prices.
• Reduced burden on government: transferring production to the private sector frees scarce public funds for infrastructure, health and education.
• Faster economic growth: the incentive of profit and rewards for risk-taking stimulate innovation and higher national output.

In short, the free market is adopted mainly to raise efficiency, attract investment and correct the failures experienced under state-dominated economies.