This essay argues that Africa is undergoing changes in its economies in the 21st century, not only because of the role that China is playing but owing to intense competition from other Western countries and the Middle East. China’s role is within the capitalist world economy and within the patron-client model of integration that the Europeans followed after African countries achieved their formal independence from colonization. During the second half of the 20th century, northwest Europe remained the conduit for African integration into the US-centered global economy, despite the role of US-based multinational corporations. According to Pew Research Center polls of African nations, the issue concerning the vast majority of the people remains the gap between rich and poor. This is directly related to the international competition for market share in Africa as well as the security issue intertwined with local rebels groups and what the US labels Islamic-inspired “terrorism”, or another form of guerrilla warfare. This essay examines many of these issues for a deep understanding of Africa today and its future prospects.
Part I: Structural Obstacles to Development and Social Justice
Decades after the decolonization of Africa and after Frantz Fanon (Wretched of the Earth) depicted the social, economic, political and cultural problems associated with the legacy of colonialism there has been no structural change in the political economy of the 54 African nation-states any more than in ending endemic poverty as the UN and other organizations have been promising for decades or closing the rich-poor gap. It is misleading and a remnant of imperialist political labeling to lump all African countries under one category, just as it is misleading to place all of Latin American countries in a single category, although they do have common characteristic and a common legacy of colonialism and current reality of foreign control of resources and market share.
There is a huge difference between South Africa now part of the BRICS (Brazil, Russia, India, and China) economy, and Somalia ranking as one of the world’s poorest nations with political instability and dim prospects for economic growth. It is just as difficult to make comparisons between Islamic North Africa with sub-Sahara Africa, despite political instability that is a common characteristic in most as the continuation of foreign economic dependence after the end of colonial rule. With this caveat in mind, for purposes of this very short essay I will address some common features and note differences as well in development models.
Apologists of capitalism argue that Africa’s current problems are strictly cyclical because the prices of metals, oil and other commodities, especially coffee and cocoa that have been declining amid a deflationary international climate. While it is true that the slowdown in commodities demand in China has obviously impacted Africa, the majority of the people were not better off when prices were rising. Regardless of capitalism’s expansion and contraction cycles, from the 1950s to the present, living standards for the African people have not improved, no matter the lofty claims from Western governments, NGO’s and other organizations about helping Africa become self-sufficient.
In the second half of the 20th century, Africa’s division of labor and national institutions – everything from military to banking and foreign trade - was largely determined by the core countries - US and northwest Europe - with the considerable assistance from the International Monetary Fund (IMF), World Bank and its affiliates, African Development Bank and a number of United Nations agencies, and of course, the explosion of NGO’s some of which are fully funded by governments trying to peddle political and economic influence. In short, the external mechanisms of Africa’s dependence became stronger and more solidified in the last six decades than they were during the era of colonial rule.
In fact, there has been a downward trend in living standards for the vast majority of Africans from 1990 to 2015, despite the remarkable uptrend cycle in commodity prices and massive new investment from China. This is evident by examining all indicators from life expectancy to access to clean water and sanitation. There are those who point to periodic drought primarily in Ethiopia, Kenya, and Somalia; local wars and rebel conflicts in the drought-stricken countries as well as others especially where Muslims have influence such as Sudan, Nigeria, and Libya.
Besides endemic poverty that creates fertile grounds for Islamic or tribal inspired rebel movements throughout many part of the continent, the population explosion, corrupt politicians, contraband and informal economy, absence of infrastructural development, and modern technology to help the continent achieve capitalist development comparable to that of the West are obstacles to progress. It is noteworthy that some of the arguments made today on why Africa cannot catch up with its Western counterparts were also made one hundred years ago when Africa was under European colonization, with the colonizers blaming everything but imperialism as the root cause of underdevelopment.
One cause for the systemic underdevelopment of Africa has been and remains that more capital flows out than comes in, invariably foreign loans having the role as catalysts to the process of de-capitalization. The cycle of public foreign debt and de-capitalization continues across the continent under the watchful eye of the International Monetary Fund and foreign financial institutions that represent big banks in the US and Europe and large corporate interests.
It is indeed a monumental step forward that Africans have served as heads of the United Nations and in key positions of international organization. From a symbolic perspective, it was great to see Kofi Annan as the UN secretary-general, but was Africa better off when he left the UN than when he came in; or was there any structural change in the political economy of the entire continent from Egypt to South Africa, from Nigeria to Kenya? Inordinate dependence on the foreign–dominated and outward-oriented primary sector of production owing to failure to diversify the economy remains the major obstacles to raising living standards.
Many observers of the African political economy argue that there have been success stories, among them, South Africa freeing itself from white majority political rule though keeping white majority economic hegemony. With the exception of Israel and rightwing elements in the US, the entire world celebrated the end of South Africa’s apartheid a generation ago. Nelson Mandela became a symbol of freedom and self-determination for Africans. However, high unemployment, low living standards among blacks, lack of upward mobility, and the rich-poor persisted, with the country occupying the world’s last place for life expectancy.
Although South Africa was on its way to catching up with Brazil, India and Russia, enjoying 38% GDP growth in the last decade, this was not indicative of social mobility but rather capital concentration. In 2015, South Africa suffers unemployment at the same level as Greece that has been under IMF-EU austerity since 2010. Socioeconomic and political conditions are worse in the rest of Africa, and this includes Muslim northern Africa that has suffered US-NATO direct and indirect military interference in its social uprisings during the Arab Spring revolts that once represented the promise of a democratic Africa free of dictators linked to large domestic and foreign capitalists.
Judging from the unemployment statistics in Africa’s two largest economies, Nigeria and South Africa, both dependent on extractive industries exports, there is not much difference between them with all of those natural resources, and Greece suffering five consecutive years of IMF-EU-imposed austerity and downward socioeconomic mobility. One could argue that 26.4% unemployment for South Africa and 24% for Nigeria are understandable owing to the cyclical nature of the commodities market – both gold and crude oil are sharply down from their highs, along with all commodities. However, the core issue is not capitalism’s cyclical contraction, but the high levels of structural unemployment and underemployment in the continent’s richest countries, as well as the vast income gap between the very few wealthy individuals and the vast majority of the masses.
Obstacles to development account for a division of labor that has remained about the same in the last half century. This is despite reductions in extreme poverty (under two dollar a day category) in the last two decades. By all indications, globalization has accounted for the downward mobility of most Africans, although this may not be as clear when looking at GDP statistics of certain countries, including South Africa and Nigeria. The world economic structure has not changed, no matter the rhetoric about globalization and neoliberal policies uplifting all economies across the world. Just the opposite, the overall economic picture of Africa is one of steady decline since the 1980s. The continent’s share of global trade was 3.1% in 1955 in 1990 it was a mere 1.2%.
Largely because of China as a major new player in the region’s trade, there was a rise after the recession of the early 1990s, but this too was limited to the primary sector of production. The China factor did not help the continent lift its GDP amounting to under $300 billion in 1997 while the debt was $315 billion. This allowed the IMF to impose austerity and neoliberal measures of privatization, corporate tax reductions, and trade barrier removals that further weakened the national economies. The austerity measures not only prevented upward socioeconomic mobility, but actually drove more people into lower living standards.
In December 1993,UN secretary-general Boutros-Boutrros Ghali argued that the solution for Africa’s socioeconomic problems rested with greater integration. In an essay on this issue, Robert J. Cummings noted that: “From the 1950sto the present, more than 200 organizations have been founded on the continent of Africa for the purpose of fostering regional and sub-regional integration and economic cooperation. The performance record of these myriad organizations historically have not been sterling.” R. J. Cummings “Africa’s Case for Economic Integration” (www.HU Archives.net )
The efforts on the part of the UN, World Bank and other Western institutions and governments to forge African integration have not lifted altered the dependent structure of the economy based on the primary sector of production nor have such efforts resulted in higher living standards and upward social mobility despite some reduction in poverty in the last two decades. Integration on the patron-client model is at the core of neo-colonialism in Africa and favors the multinational corporations, thus perpetuating external dependence and underdevelopment.
The most significant challenge of Africa in the next few decades will be to transform itself from a largely "dependent outward-oriented" economy (primary sector production exports) providing cheap raw materials for the advanced capitalist countries to an inward-looking (producing to meet domestic demand through import substitution industrialization) integrated via an intra-continental model and develops more equitable terms of trade with developed countries. The uneven terms of trade, the inherent lower value of African exports vs. its imports from the developed countries has been and remains a core problem in development.
To achieve the goal of self-sufficiency Africa would need more than NGOs and UN intervention that only target emergency areas during war and famine. Africa would need more than China funding infrastructural development intended to accommodate extractive mining and agricultural regions, and more than regional integration that the World Bank has been advocating and without success by its own admission, and only intended to strengthen the role of multinational corporations trying to dominate key sectors of the raw materials economy.
In the absence of a systemic political change, just as took place in England (1689) and France (1789) that paved the way for economic modernization, Africa cannot achieve its goal of self-sufficiency no matter the rhetoric by politicians on the continent or Western organizations like the World Bank and corporations employing the self-sufficiency rhetoric but operating as imperialists not much different in results than the colonialists of the 19th century.
(Part II analyzes China's role in Africa)