Picture: Nic Bothma / EPA – A Sudanese aid worker from the French aid organisation Solidarity watches over displaced people from the Darfur region who sit and wait to be processed. Whether due to food shortages and famine or armed conflict over natural resources, consistent conflict keeps many African countries in a state of perpetual under-development, and dependent on foreign aid, despite Africa’s own wealth, the writer says.
By Isobel Frye
More than half of the world’s countries facing humanitarian crises in 2023 are located in Africa. And yet during this week’s Group of Seven (G7) meeting, almost nothing was said of Africa as the world’s richest countries deliberated their priorities. For the 1.4 billion people who live on the African Continent, what comfort exists for charting a better way forward?
Learning from history it seems that taking control over the proceeds of the wealth of the Continent is the beginning of owning a future that seeks to meet the needs of Africans and the recent development of the Dangote oil refinery in Nigeria is a bold example of this.
Somalia, Ethiopia, the DRC and South Sudan are all countries that are an almost permanent fixture on the list of humanitarian aid recipients. Whether due to food shortages and famine or armed conflict over natural resources, the constancy of conflict keeps these countries in a state of perpetual under-development, and dependent on external actors for the most basic functions of national and individual existence. And yet Africa is a Continent that is rich in natural resources and has a youth dividend that could deliver huge potential innovation and growth in decades to come.
Why this contradiction?
Most conflict arises around actual or perceived shortfalls or austerity, which prompt acts of aggression to capture what is seen as a finite source. The two simplistic reasons frequently given to explain the apparent need for austerity in a Continent of great wealth as exists in Africa are a hostile natural environment, including drought and floods, and human greed and corruption. These two causes are cast as self-perpetuating, and of their own crafting a permanent state of dysfunction and crisis and that requires and justifies a dependency on the richer developed nations.
However, there have been strong counter-narratives to this. From the writings of Walter Rodney in the 1970s, Howard Nicholas, the late Thandika Mkandawire and a host of younger critical thinkers, it is clear that a perpetually weak Africa holds many advantages to developed nations precisely because of the wealth of African nations. And to break this cycle Africa needs to disrupt the dominance of global economic institutions as it develops its own value generation. But the warning is that the harder that Africa fights to assert its autonomy, the colder the response from the rest of the world will be.
Walter Rodney challenged the then prevailing view of undeveloped nations with the theory of under-development. Rodney demonstrated that the relative lack of development that we see in Africa and other regions in the South was directly related to the scale and pace of development in northern countries through the historical plundering of slavery, exploitation and imperialism. Because the developing North took people and resources for itself on terms that it dictated, not only did they advance rapidly, but the plundering prevented Africa from undergoing its own developmental path as the prime of people and the richness of commodities were taken without consent or fair exchange of value.
In 2015, Professor Howard Nicholas delivered a highly provocative lecture at the Institute for Social Studies in the Netherlands. Talking specifically about Sub-Saharan Africa, Nicholas argued that Africa is deliberately condemned to a perpetual state of poverty in order to underwrite the high living standards and levels of development in the rich Northern countries and increasingly Asia. These regions require failing institutions in Africa to continue to allow for bargain-basement commodity extraction and agricultural production, while destabilised local conditions in African countries prevent large-scale localised manufacturing being undertaken as part of a broad industrialisation in the countries of source.
Instead, the value-add and the jobs are created elsewhere, and the source country receives next to nothing for the primary extracted goods. Domestic revenues are almost non-existent for local human capital development (education, healthcare and R&D), while international institutions, including the World Bank, the International Monetary Fund and the World Trade Organisation, continue to enforce rules of global economic trade imposing rules and conditions that perpetuate these conditions.
Nicholas demonstrated that the times of Africa’s growth are always in response to the development of other regions using the cheap inputs from Africa, such as during the development in Korea, Taiwan and Japan and the more recent development in China. During these periods of development that require commodities, GDP growth rises in Africa. As soon as the need ceases, GDP drops.
According to Nicholas, sub-Saharan Africa is condemned to eternal poverty due to four reinforcing ways that have replaced colonialism.
The first is international aid which is given to keep repressive regimes in power and to provide sufficient investment earmarked to build and maintain the extractive infrastructure. This can be most crudely seen where the only local infrastructure development projects allowed are railway lines from the point of extraction to ports to ship the goods away, and where human capital development is aimed at providing basic education to ensure a functional low-skilled workforce.
The creation and the subsequent use of international debt traps governments into accepting conditions for the allocation of loans and the terms of repayment is the second. These conditions include shrinking the size of national civil service, regulating low tax rates and royalties for international multi-nationals and generally creating a state of economic enslavement.
The third dynamic according to Nicholas is the monopoly buying structures in the west that collude to set prices of commodities and agricultural products. According to Nicholas on the agricultural production front a limited number of multi-national corporations (MNCs) set prices and also purchasing conditions for exports on agricultural goods. Planned overproduction guarantees low prices for consumers in the purchasing countries, keeping their living standards higher and their voters happy.
And despite being viewed as the global watchdog on trade, the World Trade Organisation does not challenge the price collusion.
The global international economic institutions are cited by Nicholas as the fourth dynamic of the deliberate underdevelopment or “economic warfare” as he terms it. He talks most specifically about the World Bank, the International Monetary Fund and the World Trade Organisation. One example of this arose from IMF conditions that countries receiving development loans eliminate all food subsidies in their domestic food production. Some of the highest subsidies are however paid in European countries. The WTO then ruled that food subsidies could continue where they were in existence but could not be re-introduced in countries where they had been phased out institutionalising unfair terms in the name of global progress.
None of this is new knowledge, but it is interesting to see one very recent development on the Continent that shows a new path of localised development by and for Africa, because that is where the solution to Africa’s otherwise perpetual state of crisis will lie.
Aliko Dangote recently opened Dangote oil refinery in Nigeria with the intention to undertake local oil refinery. Key to this was to reduce Nigeria’s dependence on oil imports, promote and boost local development and the creation of secondary allied industries. Despite being Africa’s largest oil producer Nigeria imports about 80 percent of its refined petroleum production needs. The disruption to global supply due to the Russian invasion of the Ukraine almost doubled the cost of the imports for the country. State subsidies to reduce the cost for consumers constituted 24 percent of the national budget in 2023. It is anticipated that this move will be a game changer for Nigerian development and will benefit the greater region too.
Such a move to reduce African dependency on external actors and to promote local development and skilled job creation is a welcome move in Nicholas’s “economic warfare” on the African Continent.
Will there be a push back from the developed North and Asia? Probably. However, only the creation of African wealth through production and manufacturing will capture the value that otherwise will continue to be sucked out of the Continent, and create a viable future in which conflict is not inevitable.
Isobel Frye is Executive Director of the Social Policy Initiative