1) Africa owes its takeoff to a variety of accelerators, nearly all of them external and occurring in the past 10 years:
· billions of dollars in aid, especially to fight HIV/AIDS and malaria;
· tens of billions of dollars in foreign-debt cancellations;
· a concurrent interest in Africa’s natural resources, led by China; and
· the rapid spread of mobile phones, from a few million in 2000 to more than 750 million today.
Business increasingly dominates foreign interest in Africa. Investment first outpaced aid in 2006 and now doubles it.
2) Africa owes its economic decline (running at more than 6 percent of gross income per year once nonrenewable resource depletion is considered) to a variety of accelerators, nearly all of them external and occurring in the past centuries during which slavery, colonialism and neo-colonialism locked in the continent’s underdevelopment, but several of which – along with climate change – were amplified in recent years:
· stagnant overseas development aid – around 60 percent ‘phantom’, anyhow – to most African countries, except to 14 ‘fragile states’), with Washington leading further cuts in funding to fight HIV/AIDS and malaria;
· tens of billions of dollars in foreign debt cancellation (of what was mainly unrepayable ‘Odious’ loans to dictators) in 2005 yet at the same time a squeeze on low-income African finance ministries that immediately afterwards caused a dramatic rise in debt repayments (from 5 to 8 percent of export earnings);
· a concurrent looting of Africa’s natural resources, led by China and the West, resulting in dramatic recent falls in mineral and petroleum wealth (when calculated as ‘Adjusted Net Saving’ to incorporate resource-stripping); and
· the rapid spread of mobile phones, which because of high costs and low internet connectivity, has done very little to solve the digital divide.
Banking increasingly dominates foreign interest in Africa, as elite disinvestment into Western and Eastern financial markets continues to outpace aid and investment, amounting to an estimated $1.4 trillion in capital flight from the continent – both SubSaharan and North ends – from 1970-2010.
From Time magazine’s December 3 cover story comes the first ‘graf (all that’s missing is hackneyed praise of Africa’s supposedly vast new ‘middle class’, which in reality is a tiny group). The biases of its author, Alex Perry, are out of control. In 2010, intoned Perry, “Independent Congo gave the world Mobutu Sese Seko, who for 32 years impoverished his people while traveling the world in a chartered Concorde.” Rebutted Julie Hollar of Fairness & Accuracy in Reporting, “If you’re going to charge Congo with being ‘what’s wrong with Africa,’ you’d better give credit where credit is due. Independent Congo didn’t give the world Mobutu; that gift belongs to the US and Belgium, who supported the overthrow and assassination of democratically-elected Patrice Lumumba and helped prop up the horror that was Mobutu for decades afterward.” Replied Perry, without irony, “The idea that the US created Mobutu and maintained him in power belittles Africans and is typical of the kind of racism that dogs analysis of Africa.” This was two years after Perry authored another DRC story for Time, “Come Back, Colonialism, All Is Forgiven.” (The spin-doctoring demonization of Lumumba just prior to his assassination by Time – working closely with the CIA – is lovingly recalled by Jonathan Schwarz.)
Reading Perry or even the DailyMaverick report last month on a Washington-based International Institute of Finance (IIF) study of African growth (“It’s the real thing”), one would not suspect the sub-continent is actually losing a net 6 percent of our continent’s gross national income each year thanks to the Resource Curse. But we are, if we take seriously recent recalibrations of Gross Domestic Product that measure raw materials stripped from Africa’s soil not just as once-off credits to GDP, but also as debits: the decline in ‘natural capital’ that occurs because the minerals and petroleum are non-renewable.
The World Bank’s 2011 book The Changing Wealth of Nations – from where the 6 percent figure comes – is rather conservative in calculating non-renewable resource depletion, leaving out several important minerals, and also neglecting the tax fraud and transfer pricing associated with transnational capital. These problems are documented by my colleague Khadija Sharife in Tax Us If You Can and by Leonce Ndikumana and James Boyce in various studies of capital flight that deserve much more attention, e.g. their recent book on Africa’s Odious Debts.
According to the Changing Wealth of Nations, even South Africa’s annual ‘adjusted net savings’ – correcting income especially for the value of minerals stripped from the soil and never again available for future generations –was negative R2150 per person in 2005, a figure that has no doubt worsened since. In contrast, the wealth of resource-based countries Canada and Australia soared because their extraction is done largely by home-grown companies that reinvest and return profits to local shareholders; most of the extractive corporations operating here send profits to London, New York, Melbourne and Toronto.
In most Afro-optimist reports, information about the role of these firms – whether from the West or BRICS countries – in causing the African Resource Curse is scarce, although Perry does cite Marikana as indicative of South African crony capitalism. Yet most such authors are informed by export-oriented, petro-minerals-centric, finance-driven ideologies, and Time is no exception (perhaps for advertising-related reasons). To illustrate, other telling quotes Perry uses this week are from the inimitable Bob Geldof:
Africa is in the midst of a historic transition, and during the next few decades hundreds of millions of Africans will likely be lifted out of poverty, just as hundreds of millions of Asians were in the past few decades. Bob Geldof’s evolution from Live Aid organizer to, this February, the founder of a $200 million Africa-focused private-equity fund is emblematic of the transformation. “This could be the African century,” he says. “There is a new Great Game being played out in Africa,” says Geldof. “Yet much of the West ignores this geostrategic giant.” That will inevitably change. Mozambique’s offshore Rovuma-1 block has bigger natural gas reserves than all of Libya, while initial estimates are that Somalia has as much oil as Kuwait. The continent has 60% of the world’s unused arable land. As Geldof says, “In the end, we all have to go to Africa. They have what we need.” And it is in that second scramble for Africa that the continent’s best hopes lie, because if the first scramble for Africa – as historians dubbed the period from the 1870s to 1900 – was a European imperialist carve-up, the second should leave Africa as the big winner.
More likely, Africans will be the big losers of a BRICS sub-imperialist carve-up of the continent’s land, minerals and hydrocarbons. More likely, Durban in March 2013 and subsequent BRICS summits will resemble, economically, the political deals of Berlin in 1885. “They have what we need” says it all. This debate – which I had a couple of years ago with the Bank’s lead neoliberal economist for Africa, Shanta Davarajan – is critical to assessing whether the continent wins or loses from the status quo.
Under these circumstances, an “African century”? Moreover, with climate change causing only a 2 degree average warming, the Intergovernmental Panel on Climate Change estimates that Africa’s crop revenue will fall by 90 percent by 2100. Last month even World Bank president Jim Yong Kim expressed concern about a 4 degree rise, “which is what scientists are nearly unanimously predicting by the end of the century, without serious policy changes” (including his own institution’s world-leading financing of fossil fuels, which appears set to continue). Already 400 000 die from climate change each year, and Christian Aid estimates that 185 millon Africans will perish this century. As the Doha COP18 and Durban COP17 and every other climate gathering shows, those with power from Washington and Brussels to Beijing and Pretoria don’t really care. Neither Perry nor the IIF mention climate change even in passing.
Much more could be added about the other ‘ecological debts’ owed by the Western and Eastern corporations to Africa (as well as other non-remunerated value transfers), the continent’s excessive financial and trade integration into a volatile world economy, the propping up of Africa’s dictators and parasitical elites by Barack Obama and other Western and Eastern elites, and so many more processes of extreme uneven and combined development that contribute to the looting of Africa.
But so as to not end in despair, it is also crucial to recall growing evidence of Africa uprising, from Egypt and Tunisia, to Senegal and Nigeria, to Kenya and Uganda, to the militant poor and working people of southern Africa. The best information about the continent's social struggles comes from the ezine Pambazuka, but there are other sources. Using data gathered even before Marikana, the Davos World Economic Forum’s 2012-2013 World Competitiveness Report gave SA workers the gold medal for class struggle, against 143 competitors, a soaring improvement over the 2011-12 rating of South Africans as only the world’s 7th most feisty workers. It is the intensity of these Africans’ critique of status quo political economy – and perhaps, soon, a growing breadth and depth, as strike committees fuse with community groups and environmentalists to transcend South Africa’s fabled popcorn protests – that provide the only real hope for a durable rising by a very oppressed continent’s peoples.
Patrick Bond directs the University of KwaZulu-Natal Centre for Civil Society in Durban.