In a contribution to ROAPE’s long-standing debate on Capitalism in Africa, Thomas Bierschenk and José-María Muñoz foreground the concept of rentier capitalism as a useful analytic for the case of Africa. While the empirical range of this concept has to this point retained a strong focus on the global North, Bierschenk and Muñoz introduce a collection of open access, free-to-download papers that suggest its relevance for understanding ongoing dynamics related to capitalist development on the continent.
By Thomas Bierschenk and José-María Muñoz
Recently, there has been a lively debate generated in Marxist-inspired political economy around the concept of rentier capitalism – an economic formation dominated by rentiers, rents, and rent-generating assets. This debate has concerned the Global North but – taking inspiration from recent empirical work that we have curated – we propose that the concept of rentier capitalism is a useful analytic for the case of Africa as well. In fact, few figures have captured global imaginations around the prowess of entrepreneurship in the African continent as Aliko Dangote. Yet, the irony that Dangote’s fortune was built on an economic sector where anticompetitive behaviour has been so prevalent and gross profit margins routinely reach 50% is often lost in popular portrayals of the Nigerian magnate.
Authors such as Piketty, Mazzucato, and Christophers argue that Marx underestimated the long-term importance of rents in capitalism, and that he was mistaken (as was Keynes) when he predicted that their importance would decline over time under the increasing influence of the market and competition. This literature understands rent as income derived from the control of scarce assets under conditions of no competition, and a rentier is the recipient of this income. The definition of rent and its distinction from what it is not – capitalist profit produced under conditions of free market competition – have been central to Western economic thought.
Marx considered only landed property and interest-bearing capital as sources of rents; however, other rent-bearing assets have evolved and grown in importance over time: intellectual property rights, mineral resources, platform assets, long-term service contracts and infrastructures for the delivery of communication, energy, transportation, and similar services. With the growing importance of these rents, the economies of the Global North contain rentier capitalist elements to varying degrees; in extreme cases, they dominate to such an extent that entire economies, such as the UK’s, have been described as rentier capitalisms, characterised by a proprietary rather than an entrepreneurial ethos.
Rentiers are in a position to extract long-term payments for the use of scarce resources in the absence of relevant competition. They are inclined to sit on and sweat their income-generating assets rather than innovate, and in this regard they are not entrepreneurs in the Schumpeterian sense. Therefore, it is not surprising that, in spite of prominent efforts to identify contexts in which rents can be productive not only politically but also economically, the term continues to carry a stigma with it. Few people would like to be characterised as a rentier.
While in the Global North it is companies that hold the bulk of society’s rent-generating assets, in Africa individuals play a relatively larger role, perhaps unsurprisingly given the comparatively low numbers of incorporated businesses there. Also, not all the types of rents mentioned are equally relevant to African economies. On the other hand, many African economies evolve around rents that are not given prominence by authors writing on the Global North or are mentioned only in passing. We are thinking here of financial transfers in the context of so-called development aid and of relational capital.
By this term, we mean privileged access to political elites who decide, for example, on the privatisation of state enterprises and on infrastructure contracts. Christophers refers to asset creation here as “simply knowing how to win contracts”. He also distinguishes analytically between “protecting assets” (e.g. from taxation, customs fees, and bribes), which is often a function of relational capital, in African countries and elsewhere, and “active lobbying by major owners of rental stock”. Lobbyists are thus key individuals in rentier capitalist contexts.
These theoretical considerations would also widen the empirical range of the “varieties of capitalism” debate which so far has retained a strong focus on the Global North. Many of the businesspeople’s practices dissected in our recent special issue of the journal Anthropologie et Développement can readily be related to the concept of rentier capitalism. For example, during Mozambique’s transition to a liberal market economy and the privatisation of state enterprises, the state became highly dependent on development aid. It is in this context that the national employer’s association (CTA) was founded with the help of development agencies. This is an institution in which the interests of the ruling political elite, businesspeople and donors intersect, and which predominantly creates opportunities for national business elites and international capital, with little spillover into the rest of the private sector.
Anésio Manhiça proposes the term “entrepreneur-broker”, which he translates from the emic Portuguese term homens de contacto (contact men), to designate actors who use their political contacts to gain privileged access to business opportunities. These contact men often have no equity and little business knowledge; they react opportunistically to business openings produced by state policy and the programmes of development agencies. For their part, the vast majority of small and medium entrepreneurs feel excluded from these networks and complain that their interests are poorly represented by the CTA.
Gérard Amougou describes a similar conflict between insiders and outsiders in Cameroon. The policy context here is one of “emergence”, a term used locally to encapsulate the ambition to make Cameroon an industrial, middle-income country by 2035. The resources and rhetoric of “emergence” as a platform are captured by state operators allied with a certain type of economic elite, which Amougou, adopting a term inspired by Jean-François Médard, labels entrepreneur-politiciens, actors who “straddle” the economic and political domains.
In other words, “emergence” does not represent a rupture. Rather, continuities with pre-existing political practices prevail, the central aim of which is to maintain the hegemony of the regime. However, many small and medium-sized entrepreneurs are excluded from these networks and demand a different definition of emergence that is more in line with their own interests.
In both Mozambique and Cameroon, the conflict between rentier capitalists and a group that feels excluded from political access lies at the centre of the analysis. Access is also the key concept for Sidy Cissokho. In his finely grained ethnography, he is interested in members of a regional organization at the interface of the public and private sector that aims to set the agenda for regional trade and transport in West Africa.
In a nod to Sylvain Laurens’ “brokers of capitalism”, Cissokho calls them courtiers de libre échange (brokers of free trade). Membership of this organization and participation in its regular meetings create a social proximity between entrepreneurs and state representatives; this entre-soi élitaire (a notion also used by Charlotte Vampo, which could be translated as the secluded sociability of elites) enables the former to fabriquer son accès (conjure one’s access), as Cissokho’s interviewees put it.
Meetings are occasions that make it possible to establish contacts with well-positioned public-sector actors and international development agencies that can then be used for personal goals, for example, in case of problems with customs or other authorities. The association and its meetings provide the opportunity for collective lobbying and propagation of the principles of free trade frontstage, while in the wings, they also allow for private lobbying.
In her analysis of the Association des Femmes Chefs d’Entreprises du Togo (AFCET), which was founded in 2001 with impetus from the International Labour Office (ILO), Vampo identifies a very similar tension between discourses and social dynamics. The members’ presentation refers to internationally fashionable progressive discourses on empowerment and defines their association’s goal as the promotion of women in the economy and society. De facto, however, the women active in the association are an economically, sociologically and ethnically restricted circle of well-connected entrepreneurs who are the heirs of an older generation of Nana Benz traders. They use their membership to gain and safeguard access to the government and guarantee their own economic interests as well as promoting the economic visibility of women. Despite all their discourses on the innovative character of entrepreneurship, therefore, these entrepreneurs are politically and socially rather conservative – their main concern is not to rock the boat with regard either to the government or to conventional gender roles.
Agnès Badou and Thomas Bierschenk point to a similar collusion politico-économique in their analysis of the sprawling landscape of business associations of all shapes and sizes in Benin, where the larger business associations in particular follow the political strategies of their leaders rather than a logic of services for the benefit of their members. These organizations are in effect actors in regime politics, in la politique politicienne, as the government seeks to control them through a policy of divide and rule and co-optation to generate party political support and minimise opposition.
This continues a historical tradition to which we referred above, whereby successive governments have sought to capture and control the private sector, a continuity that is also observed by Amougou in Cameroon and Manhiça in Mozambique. In addition, it reveals a comparable tension between the official policy objective of developing the private sector and the government’s manoeuvres to control it, which ultimately greatly weakens these associations’ function of representing collective interests.
The numerous smaller associations, on the other hand, are closely interwoven into the social arena of international development policy. The establishment of these associations is often supported by development agencies (as described by Vampo for Togo and Manhiça for Mozambique, and alluded to by Cissokho in the case of regional trade organizations). In Benin, this has resulted in a high degree of fragmentation and thematic overlap. In addition, the limited duration of development programmes means that associations lose momentum when projects end, while others lose state support with a new government.
The concept of rentier capitalism competes with other terms with which it forms an overlapping discursive field. In recent decades, in addition to Polanyi’s overarching concept of “embedded capitalism”, terms such as “political capitalism”, “crony capitalism”, and “patrimonial capitalism” have been proposed. Political capitalism describes an economic and political system in which the economic and political elite cooperate for their mutual benefit – an exchange relationship that benefits both sides. The term political capitalism has been used primarily to describe Eastern European transformation processes after the collapse of the Soviet Union.
Crony capitalism was initially associated to South-East Asian contexts but Cissokho, Manhiça and Vampo apply it (or rather, its French equivalent of capitalisme de connivence) to the African countries they are studying to underscore the role of social networks among political and economic players. Recently, there has also been mention of patrimonial capitalism, meaning a type of political economy in which power over it is highly personalised and economic exchange is particularistic and involves a high degree of relational capital.
We argue for the relative advantages of the concept of rentier capitalism when studying the economies of Africa. It is less colloquial than crony capitalism and does not have as strong normative associations as the alternatives. Crucially, it is not part of a typology that fundamentally sets Northern and Southern capitalisms apart, insofar as variants of rentier capitalism are found everywhere. Furthermore, it offers obvious connecting points to older debates on the rentier state and neo-patrimonialism.
Whichever one ultimately prefers, it should in any case be understood as an analytical term (an ideal type in the Weberian sense) that depicts aspects of a dynamic reality and does not claim to fully capture this reality within the framework of an essentialising, totalising and static typology. With these reflections, which can only be very brief here, we hope to open up a space for debate, to bring different research traditions into dialogue and to inspire further research perspectives.
However, we also would like to add a note of caution: As ethnographers, we remain sensitive to the difficulty of deciding empirically in given structural and situational contexts where exactly the boundary between capitalist profit and rent lies. Alexander Bud’s analysis of the commodification of domestic space in Nigeria and its coalescence with the hotel scene, on the one hand, and with film production, on the other hand, is a case in point, as he adds a welcome nuance to the theses on African variants of rentier capitalism.
He shows that in a rent dominated economy such as Nigeria’s, there may well be sectoral cases of entrepreneurial innovation and autonomous capitalist development. The innovative entrepreneurs being addressed in no way need to be found in manufacturing, as expected and demanded by supporters of active industrialisation policies. Rather, the focus on industrialisation policy may block the view of a potential interplay between consumer tastes and producer techniques that can be understood as genuinely capitalist while taking us away from a purely production-oriented understanding of economic value.
Bud traces how film producers in Nigeria linked Nollywood with the housing and hotel sectors, and describes the innovative potential of these entanglements. This has produced a popular new architectural style for Nollywood houses, the transformation of homes and hotels into film locations and infrastructure, a star culture that enabled business activities in hotel bars and the emergence of entirely new types of space that merge film sets and residences in novel ways.
Remarkably, these dynamics have played out independently of state and international funding; in Bud’s account, this is a private sector developed without an active policy to promote it, comparable to the development of cocoa production in West Africa in
the early 20th century, which happened, as it were, in a blind spot of colonial policy. Bud thus challenges the frequently cited thesis that there has been no significant economic structural change in Africa since 1973, and he invites us to reconsider traditional understandings of economic sectors. He also challenges widespread views on houses and hotels as unproductive assets and shows them to be integral parts of such celebrated drivers of economic transformation as the film industry.
However, as Helmut Asche points out in his afterword to this special issue, whether the dynamics in the Nigerian film and hospitality sector represent a better escape route from an economic environment that, in spite of recent ambitious investments by Dangote and others, is still marked by a lack of manufacturing and agricultural diversification remains an open question. We may also wonder whether experiences akin to that of the creative industries in Nigeria can be found or reproduced elsewhere in the continent.
‘Ethnographies of entrepreneurs, business associations, and rentier capitalism in Africa‘, Anthropologie et développement (Volume 52, 2021).
Thomas Bierschenk is Professor of Anthropology and Modern African Studies at the Gutenberg-University Mainz, Germany. He has published widely on development and the state in French-speaking countries of West and Central Africa.
José-María Muñoz is a senior lecturer at the University of Ediburgh’s Centre of African Studies. Throughout his career, he has put his training in anthropology and law to the service of a better understanding of economic dynamics in West and Central Africa.
Featured Photograph: The Chamber of Commerce in Douala, Cameroon, May 2021. Copyright, José Munoz Martin.