During his maiden visit to Ghana in July, 2019, President Barack Obama’s speech was marked by a barrage of reprimands and blame game of African leaders for the economic challenges, including the debt crisis, and social problems of African nations. In a condescending tone, he cited the lack of democracy and inability to take responsibility as causative factors. President Obama was correct, but only to such extent that African leaders have failed or ignored to understand the roots of the current decay and stagnation of the mother continent.
Dr. Graham Hart, a public affairs commentator, draws from the works of global experts and analysts to create a narrative which acknowledges Obama’s insights, but delve deeper to link Africa’s debt crisis to colonial imprints and a palpable construct to contain, by limiting, Africa from building capacity and amassing leverage to defy obstacles structurally and systematically imposed against it.
President Obama’s speech was made at the height of the 2008–2009 global economic recession. His position echoed an address given by Christine Lagarde, managing director of the International Monetary Fund (IMF) in Nigeria, in 2016.
The IMF boss had chastised the Nigerian government on fiscal policy and corruption in the face of a major commodity price collapse, admonishing them that “hard decisions will need to be taken on revenue, expenditure, debt, and investment,” and prescribing a stern dose of “resolve, resilience, and restraint.”
In 2008, then-Treasury Secretary of the United States, Timothy Geithner, tripled the IMF’s resources from about $250 billion, with $100 billion coming from the United States. Yet while the IMF directed industrialized nations to enact stimulus plans and bank bailouts, Africa and other Third World regions were compelled to accept spending cuts and other harsh conditions for loans.
In fact, said the Jubilee USA Network at the height of the 2008–2009 global recession, “There is a significant danger that the new borrowing that has resulted from a lack of sufficient international grant support . . . will force low income countries to prioritize debt repayment over essential social services and lead to renewed debt crises throughout the developing world.”
As has become traditional practice, today’s economic crisis triggered by the COVID-19 pandemic is expected to provide yet another opportunity for re-imposition of Western fiscal priorities on “emerging nations,” in a style that anti-Third World debt activist Eric Toussaint has described as “the tyranny of global finance.” Likewise, as during the last crisis, ordinary Africans will be compelled to accept punishing conditions handed down by the global financial institutions.
Broadly speaking, the thwarting of industrial development in conditions created under colonialism, the national development models attempted by African ruling classes after independence, and the narrowing of those horizons into single-commodity export economies and IMF/World Bank–imposed austerity, have all combined to produce debt crises, collapse of infrastructure, poverty, lack of access to health care, lowering health conditions, low wages, low literacy rates, an explosion of urban slums, and a host of other poor grades on human development indicators.
Obama’s comments turn the reality of Africa’s poverty and its root causes on the head. Decades of IMF and World Bank (often referred to as the “Bretton Woods institutions” for their creation at the Bretton Woods conference in New Hampshire at the close of World War II) loans and structural adjustment policies have placed an economic stranglehold on African and other Third World nations.
Jubilee 2000 observes that, “The massive strength of US capital, with more than 50 percent of world manufacturing and finance at its disposal, was used to create the World Bank, the IMF, Marshall Plan, aid and so on.”
Using the IMF/World Bank as a battering ram, neoliberal policy of trade liberalization forced its way across Africa and the rest of the globe, leaving in its wake decimated social programs, a debt crisis, and low wages—that is, conditions favorable for US investment. The last few decades of neoliberal policy have spelled disaster for the vast majority of ordinary Africans.
The comments from Obama and Lagarde illustrate two general kinds of explanations in the mainstream media and official circles about the causes of poverty in Africa, neither of which are mutually exclusive: one is a scolding approach where the Western leadership – politicians, officials, and the private sector alike – chide African leaderships on economic policy, with stern paternalism combined with hand-wringing concern.
.Africa is made to represent a basket case, which can only be repaired through Western intervention. This imagery is sustained by assumptions which include a conviction in the inability of African governments and ordinary people to independently run their own societies. The second version is a vastly distorted account that erases the destructive role played by foreign multinational corporations.
As Clark Gascoigne of Global Financial Integrity comments, “In development circles we talk a lot about how much aid is going to Africa, and there’s this feeling among some in the West that after we’ve been giving this money for decades, it’s Africa’s fault if the continent’s countries still haven’t developed.” The West has often approached Africa as a patron, rather than a partner, or indeed as its benefactor.
The West may not be directly responsible for the destruction of the Zimbabwean economy, for instance, over the past decades, or wars in which children are enlisted as combatants. However, a colonial map that made little sense bred conflict in the continent, and shocking levels of inequality, oppression, and poverty are no less prevalent today than they have been since the end of colonialism. Patrick Bond, for one, has argued that Africans are poorer today than they were at independence.
Postcolonial economic development on the continent has also resulted in combined and uneven development that has concentrated industrial growth in key centers such as Nigeria and South Africa and left other regions far behind.
According to the World Bank, those two countries together have accounted for 55 percent of the industrial value in sub-Saharan Africa, while the other fifty-two countries share the remainder.
Africa’s manufacturing exports nearly tripled from $72 billion in 2002 to $189 billion in 2012, but a mere four countries—Egypt, Morocco, South Africa, and Tunisia—accounted for a full two-thirds of these exports. Class polarization has expressed itself most sharply in these centers, with enthusiastic ruling-class support for market-based neoliberal reform on the one hand, and higher levels of working-class resistance on the other.
In South Africa, more than 40 percent of the population languishes in extreme poverty while the top quarter of the population earns 85 percent of the country’s wealth.
In Nigeria, 80 percent of the nation’s oil wealth is concentrated in the hands of 1 percent of the population.
As John Ghazvinian describes in “Untapped: The Scramble for Africa’s Oil:” “Foreign oil companies have conducted some of the world’s most sophisticated exploration and production operations . . . but the people of the Niger Delta have seen none of the benefits. While successive military regimes have used oil proceeds to buy mansions in Mayfair or build castles in the capital of Abuja, many in the Delta live as their ancestors would have done hundreds, even thousands of years ago.”
The surge in commodity prices and foreign investment has replicated this inequality in other sites on the continent. Angola, a major producer of oil and diamonds, presents a similar scenario. In Luanda, where in 1993 a staggering 84 percent of the population was jobless or underemployed, inequality between the highest and lowest income continues to widen. This dynamic has multiplied many times over across Africa.
Imperial powers continue to wield the hammer of “good governance” as a weapon to ensure the subservience of oppressed nations and as a tool to maintain a competitive advantage against their rivals. On the other hand, these strictures can easily be brushed under the rug when expedient. Apartheid South Africa—like Mobutu’s Zaire—well exemplifies the hypocrisy of the selective critiques of the West:
On average as much as 7 percent of GDP per annum left South Africa as capital flight between 1970 and 1988, an equivalent of 25 percent of non-gold imports. This was entirely due to the transfer activities of the major corporations like Anglo-American and the Rembrandt Groups. And their behavior was no less illicit than that of the dictators.
Shifting private funds out of South Africa in the 1980s not only defied local capital controls, but also broke the international sanctions regime on apartheid. As such, the neo-liberal demonization of the corrupt black African state simply does not hold. The private ‘white’ capitalists of South Africa were busy engaging in capital flight as well.
Poverty in Africa is not simply a fact of nature but was manufactured through the historical processes of exploitation and neoliberalism, built upon and impacted by the legacies of colonialism and underdevelopment. Writers such as Eric Toussaint, among many others, have made critical contributions to an understanding that: “Western foreign policy toward Africa does not merely produce poverty and inequality as an accidental byproduct, but rather, that Third World debt, structural adjustment, privatization, and trade liberalization are intentional strategies of a neoliberal (containment) agenda.”
Colonialism left a political heritage of weak states with limited control over territory and regimes that relied on ethnic divisions, a centralized authority, and patronage systems inherited from colonial rule.
Frantz Fanon describes in “The Wretched of the Earth” how Africa’s post-colonial rulers draped themselves in the nationalism and aspirations of the anticolonial revolutions so as to facilitate accumulation in which they would also be beneficiaries.
“Spoiled children of yesterday’s colonialism and today’s governing powers, they oversee the looting of the few national resources. Ruthless in their scheming and legal pilfering they use the poverty, now nationwide, to work their way to the top through import-export holdings, limited companies, playing the stock market, and nepotism. They insist on the doctrine of nationalization for business transactions, i.e., reserving contracts and business deals for nationals. Their doctrine is to proclaim the absolute need for nationalizing the theft of the nation.”
The legacy of the plunder and colonization has been the expansion of capitalism as a system and the massive accumulation of capitalists—and “their” nation-states—at the expense of greatly weakened states and economies in Africa.
“The wealth that was created by African labor and from African resources was grabbed by the capitalist countries of Europe,” writes Rodney, “Restrictions were placed upon African capacity to make the maximum use of its economic potential. . . . African economies are integrated into the very structure of the developed capitalist economies; and they integrated in a manner that is unfavorable to Africa and insures that Africa is dependent on the big capitalist countries.”
In essence, Rodney would argue, “The development effort of late colonial regimes never did provide the basis for a strong national economy; economies remained externally oriented and the state’s economic power remained concentrated at the gate between inside and outside.”
These conditions posed severe challenges to the prospects for building sustainable economies capable of protecting nascent industries from the turmoil of global markets. As British socialist Chris Harman has pointed out, “Success in trade in the modern world is only possible if you already have a high level of investment in modern technologies. Countries which do not have that are doomed even when no barriers exist to their selling goods in advanced countries.”
Rodney has argued that production proceeded on a different path than in Europe, where the destruction of agrarian and craft economies increased productive capacity through the development of factories and a mass working class.
In Africa, he argues, “that process was distorted: as in Europe, but local craft industry was destroyed, yet industry was not developed outside of agriculture and extraction, and workers were restricted to the lowest-paid, most unskilled work.”