Lifting the Veil on Capital Flight and Tax Havens in Africa

September 20, 2018

By Nataliya Mykhalchenko

Odd-Helge Fjeldstad, Sigrid Klæboe Jacobsen, Peter Henriksen Ringstad, Honest Prosper Ngowi Lifting the veil of secrecy: Perspectives on international taxation and capital flight from Africa (Bergen: Chr. Michelsen Institute, 2017). The book is available as open source and can be accessed here.

This is a timely collection. Published when newspapers are saturated with tax-related scandals and fraud allegations, the book analyses some of the main issues surrounding illicit financial flows, in particularly concerning tax heavens. The focus of the book is Africa – the continent that suffers most from capital outflow, not only but especially in terms of economic development. Targeted at, among others, policy makers, tax practitioners, civil society organisations, students and researchers, the aim of the book is to contribute to widening the debate around tax havens and offer policy-relevant data and findings.

The book starts by considering the scale of the problem. Loss to African countries in corporate tax evasion is higher than anywhere else in the world – with a tax system which enables tax avoidance. Particularly egregious is the behaviour of multinational companies in the extractive industry who pay absurdly small amount of tax by registering profits to tax havens. Among the continent’s rich wealth is frequently hidden in havens outside national tax authorities and beyond judicial reach.

As the book tells us, ‘the global network of offshore financial centres … popularly known as ‘tax havens’ or ‘secrecy jurisdictions’ … make it possible for rich elites and large multinational companies to drain large amounts of wealth out of Africa.’ Many of these tax havens are located in predictable places, small tropical islands such as the Cayman and the British Virgin Islands, but also in rich OECD countries such as Ireland, the Netherlands, Luxembourg, Singapore, and the United Kingdom.

Despite the notorious difficulties in assessing the scale of the problem, the authors present some shocking figures. Globally, there is approximately USD 8 trillion of personal financial wealth in offshore accounts. This figure rises to USD 32 trillion when tangible asset like property, artwork and jewellery are included. Yet as a proportion of total wealth, Africa is the most afflicted continent in the world. ‘Africans hold USD 500 billion in financial wealth offshore, amounting to 30% of all financial wealth held by Africans.’ In terms of lost taxation from this ‘flight’, it is suggested that African countries are deprived of an estimated annual figure of USD 15 billion. However, as the book states, ‘The inclusion of non-financial wealth, or higher estimates from available literature, could push this figure as high as USD 60 billion annually.’ In short, the situation is catastrophic.

One of the many strengths of the book, is the representation of experts from the Global South. This can be seen in the make-up of the team of this collection: Thirty in total, they include experts, academics, activist, political and economic advisors, and importantly come from a variety of backgrounds and geographies. As a few examples: Professor Annet Oguttu – first black woman to get a doctorate in tax law at the University of South Africa, where she later became the first female Professor; Dr Honest Prosper Ngowi – an Associate Professor of Economics at Mzumbe University in Tanzania; Professor Leonce Ndikumana – Professor of Economics University of Massachusetts at Amhest and Dr Caleb Fundanha – the Director of the Institute for Finance and Economics and Chief Executive Officer of Macroeconomic and Financial Management Institute of Eastern and Southern Africa.

The volume is organised into five sections: each one opens by introducing a topic and is then complimented by shorter articles with more in-depth discussion and case studies. Setting the scene in the introduction, the authors take up, what seems an unwieldy task: not only understand the impact that tax havens have in economic terms on the continent, but also explore ways in which the global networks of offshore financial centres affect domestic tax bases, political institutions, and citizen’s participation. To note briefly, there is no clear explanation as what kind, or in what, the ‘citizen’s participation’ is referred to.

After defining some important concepts and giving an overview of the historical evolvement of tax heavens, the book moves to talk about its estimated scale and impact on the African continent as well as about the intricate relationship between capital flight, global corporations, bank secrecy and the elites, i.e. the power-accumulation nexus. Importantly, there is an acknowledgement of the difficulty in quantifying the exact amount of money being lost due to, amongst other things, the mismatch in trade statistics and often inaccurate methodologies used to estimate losses. This is an argument that is widely adopted by the international community as the search for more reliable methodologies continues.

The actors involved in the network of tax heavens, including the so-called ‘Big Four’ (EY, Deloitte, PwC and KPMG) are explored in detail. These actors – also referred to as ‘lobbyists’ – according to the study, play one of the central roles in pushing for tax incentives and benefits for multinational companies, to the extent that this influences legislation in certain countries as explored by John Christensen here. The exploration of the extractives sector on the African continent and its relationship with tax havens is probably one of the most insightful parts of this collection. Detail-rich, it illustrates how multiple actors (including domestic players), navigate their way in interests-driven financial schemes in order to – to put in simple terms – squeeze as much revenue and pay as little tax.

The final section of the book gives an overview of some of the actors involved in trying to tackle issues associated with tax havens as well as the measures and initiatives these actors are supporting. The overview is comprehensive, covering the historical development of these initiatives, mentioning the current changes and importantly underlining the importance of building capacity in the African countries in tax administration, including taxpayer services and increasingly important e-tax systems.

Structurally, the book has various shortcomings. Due to the fact that some of the shorter articles in the five sections were not written specifically for this collection (but rather adapted), at times there is a sense that the information is fragmented. The lack of cross-referencing within sections and shorter articles throughout the book also adds to this effect. Moreover, there are several times where the same concepts are being defined and explained repeatedly, while it helps in our understanding, this repetition breaks the flow of the book.

What the structural inaccuracies also do is that they take away from effectively conveying the response to research objectives that were laid out at the start of the book. The data and analysis to further understand how tax havens affect domestic taxation bases, political institutions and ‘citizen participation’ gets somewhat diluted in lengthy explanations. While it is understandable that when trying to unveil the complex financial and political structures at play, there is a sense that there is not enough emphasis on how the material connects to the research questions. What is also lacking is a conclusion. The book seems to end abruptly and leaves the reader ‘hanging’; I would have liked to see the analysis being comprehensively concluded.

What the book does do however, it is it opens up a much-needed debate around the importance of looking beyond financial impacts of tax havens to start a wider discussion on its effects on domestic law-creation, people’s perceptions and attitudes toward taxation, in order to understand the mechanism and policy that can be used to deter the abuse of the global financial system. The book offers a solid grounding that can inform future research, studies and debates. Available as open source, graphically appealing and detail-rich, the book is an accessible resource for those interested in peering behind the veil of secrecy.

Lifting the Veil of Secrecy is available as open source and can be accessed here.

Nataliya Mykhalchenko graduated from the University of Leeds in International Development. Supported by ROAPE she researches anti-fraud initiatives on the African continent. Recently she has investigated anti-fraud measures in South Africa, Ghana, Botswana, Nigeria, Tanzania, Kenya, Malawi, Rwanda and Zambia. Working with ROAPE’s Jörg Wiegratz, Nataliya’s research is linked to the political economy of anti-fraud measures in the Global South. She is now based at the Social Research, Law and Legal Studies at Birkbeck University.

Featured Photograph: From the article ‘Africa is Poor’ they said! on Quora

Farmers and Agricultural Development in Ghana’s Cocoa Industry

ROAPE

September 18, 2018

CocoaGhana — BRITAIN AND THE COMMONWEALTH OF NATIONS 1945 - 1975 (TR 4924) The Chief of Osino and his elders receive a report from a British colonial agiculture officer concerning an outbreak of swollen shoot disease which was endangering the local cocoa crop during the early 1950s. Osino was part of the Ashanti Protectorate in the Gold Coast, later part of the Republic of Ghana. Copyright: © IWM. Original Source: http://www.iwm.org.uk/collections/item/object/205189772

Looking at the cocoa industry in Ghana, Erik Jorgensen and Yukari Kanamori demonstrate how power asymmetry in the private cocoa industry and reduced institutional capacity have added to dependency. The Ghanaian Cocoa industry is an example of the disproportionate appropriation of rents by foreign firms in the downstream segments of the value chain which has not only halted agricultural development, but actually eroded the position of cocoa farmers in the country.

By Erik Jorgensen and Yukari Kanamori

In the rush to highlight the role of global value chains (GVCs) in structurally transforming agriculture, and more broadly in economies across sub-Saharan Africa, we must not lose sight of where benefits are being accrued. Much as settler agriculture under colonialism simultaneously transformed agriculture while excluding local producer, GVCs that vertically integrate smallholder farmers as producers of the raw good without investing in routine upgrading are more exploitative than they are developmentalist in rural spaces. In this blogpost for roape.net we look at the case of Ghana to demonstrate how power asymmetry in the private cocoa industry and reduced institutional capacity have added to dependency, and how firms have sought to mitigate this type of imbalance by stimulating agricultural development alongside that of agro-industry.

The increased prevalence of agro-industrial value chains around the world has encouraged development professionals and national leaders alike to reconsider the place of agriculture in the industrialisation process. Years of agro-Afro-pessimism is being questioned in policy discussions as national leaders increasingly come to view vertical integration of smallholder farmers into these GVCs as a means to agricultural and industrial development. President Akufo Addo’s Planting for Food and Jobs initiative implemented in 2017 in Ghana is an example of the dual mandate of stimulating agricultural and regional industrial development through a single policy. However, agricultural development should not be considered a natural outcome of value chain integration. Agricultural development happens in tandem with industrial development within agro-industrial value chains where rents are productively re-invested, either by the public or private actors, to improve farmers’ competitivity at the production level.

Here, we use the term GVCs to describe any international process of value addition through which an agricultural product is grown, processed, and sold by a firm or multiple firms. We concentrate specifically on the outgrower model used in cocoa industry, wherein the lead firm does not grow the crop but purchases from farmers or farmers groups. We define rents as the profits generated from relative comparative advantage in the respective field of production.

While industrialisation relies on the perpetual reinvestment of rents into a firm or sector to increase productivity, agricultural development has historically relied on small income generation projects. These piecemeal projects have largely ignored the structural barriers that farmers face when looking to commercialise and—while they may generate surge in yields—rarely initiate a cycle of continued reinvestment and upgrading.

The Ghanaian Cocoa industry is a case in which the disproportionate appropriation of rents by foreign firms in the downstream segments of the value chain has not only halted agricultural development, but actually eroded the position of cocoa farmers in the country. The colonial government set up a marketing board in order to develop cocoa industry in the colony. As a government monopsony, it used the rents generated from selling cocoa in international markets for a number of functions: price stabilisation, research and development, extension services to farmers, and quality control—among others. The resulting spread of cocoa changed the very structure of agriculture in much of the southern half of Ghana, labour markets were created, and social mobility was amplified.

At the time of independence, unlike other African countries that suffered from fierce political and religious conflicts without having strong industrial foundations nor leadership, Ghana was in a relatively peculiar position. Although the country was underdeveloped, abundant foreign reserves from the colonial cocoa production and strong leadership of the country’s first Prime Minister and President Kwame Nkrumah enabled nation-wide aggressive industrialisation initiative. However, this did not necessarily develop with institutional reforms to effectively deprive the influence of clientelism, rather, it was to strengthen the nationalist ‘self-government’ of the independent government. As world cocoa prices fell in the 1960s, the government sought to diversify the economy. Import-substituting industrialisation was adopted as a central strategy, but a series of short-term governments and the persistence of clientelism limited the extent to which the government was able to address the firms’ competitivity, capacity improvement, and the overvalued exchange rate. Furthermore, the outbreak of oil shocks in the 1970s severely exacerbated the already severe fiscal deficit. By the early 1980s increased debt and inflation prompted the government to turn to the World Bank’s Structural Adjustment Programmes. The urgency to restore the economy and one-size-fits-all prescription of structural adjustment led to the immediate and substantial rollback of many of the marketing board key services. Multinational corporations filled in many of the roles formerly undertaken by the marketing boards, such as quality control, yet unlike public institutions they had less incentives to invest back into agriculture or industry. Research institutions’ reduced funding and shifting priorities caused yields to stagnate as they cut extension services and devoted an increasing share of funding to research and development of novel products rather than to improving agronomic performance.

The increased involvement of multinationals has not offset the state’s reduced re-investment into production but, instead, have devoted their research and development primarily to improving profitability in downstream segments of the value chain. Compounding the effect of reduced quality control services, novel grinding technologies developed by multinationals reduce the significance of bean quality and further erode the farmers’ ability to demand a quality premium. While these firms are industrialising and becoming increasingly efficient, the fact that most processing still takes place in developed countries or in Ghana’s export free zone inhibits the government’s ability to capture rents to reinvest in production. While the United Nations Industrial Development Organisation hosted the first ever ‘World Free and Special Economic Zones Summit’ in 2017, Ghana established its first EFZ in 1995 under President Rawlings. The stated intention of these zones was to increase foreign direct investment and expand the space of manufacturing in Ghanaian exports, this was accomplished through tax concessions and reduced emphasis on domestic involvement by allowing 100%-foreign-owned firms to operate with equal rights as domestic firms. While recent efforts have undoubtedly increased the prevalence of downstream cocoa processing within Ghanaian borders, nevertheless much of the benefits have been accrued by foreign firms at the expense of the domestic smallholder farmer.

Currently, Tree Global, a private organisation producing high-quality cocoa seedlings, is attempting to fill some of the agronomic research and development gap that has developed since the early 1980s. Using the most advanced genetics and production techniques, Tree Global markets high-quality seedlings to Ghanaian cocoa farmers. These seedlings are of a higher quality than those distributed by the government and produce pods more rapidly, providing such a favourable performance that smallholders have been willing to pay for seedlings in place of planting free lower-quality ones. While this boost in productivity does not guarantee a cyclical reinvestment into production for continued development, it does highlight the role that private, for-profit, organisations can have in promoting agricultural development. If the rents generated by this increase in productivity are captured and reinvested in further research and development, producers may be able to initiate a domestic cycle of rent investment that complements the advancements being made internationally by multinationals. Circumventing the reliance on rents from international chocolate processors and retailers has the potential to increase the competitivity and bargaining position of the producer.

While GVCs for cocoa have opened significant opportunities for agricultural development, the experience of Ghanaian cocoa industry emphasises the importance of the scale and destination of rent redistribution. For a process of continual agricultural development to coincide with the industrial development taking place in global agro-industrial value chains, investment in primary producers must be made at an extent capable of upgrading the systems of production. Where private industry fails to make this investment and the state is incapable of capturing rents to redirect to farmers due to the use of Export Free Zones, there must be a search for alternative markets for farmers and more localised cycles of rent production and reinvestment. New methods of value addition—such as adoption of traceability protocols, the establishment of single origin marketing, or enrolment in quality assurance schemes such as Fairtrade—and emphasis on developing novel products, like non-melting chocolate, for regional markets have potential for expanding bargaining power for Ghanaian farmers. This support to the farmer could be the difference between agricultural development and a race to the bottom in agricultural value chains.

This blog post is part of a series composed by Masters candidates on the African Development course at the London School of Economics and Political Science. They represent the views of an emerging body of critical young voices interested in radical structural transformation and growth in African economies. The series is featured in roape.net, Africa is a Country, Africa@LSE and ID@LSE blogs.

Erik Jorgensen completed a Masters in African Development at the London School of Economics. His research interests include vocational agricultural education and entrepreneurship, agricultural extension, and value chain integration for smallholder farmers.

Yukari Kanamori researches state and business relations, inclusive business, and business and human rights. She recently completed a Masters in Development Management at the London School of Economics.

Featured Photograph: The Chief of Osino and his elders receive a report from a British colonial agriculture officer concerning an outbreak of swollen shoot disease which was endangering the local cocoa crop in the Gold Coast during the early 1950s.

The Dangerous Rise of the Digital Utopians Across Africa

ROAPE

September 14, 2018

After the manifest failure of microcredit to address poverty in Africa and everywhere else, the international development community has hit upon a new microcredit-related idea that, it claims, will do the job this time around: ‘fin-tech’, i.e. financial technology. As Milford Bateman argues in this blogpost fin-tech has the potential to gravely undermine the position of the poor and to increase inequality while, not coincidentally, vastly enriching a narrow elite.

By Milford Bateman

Financial technology, or ‘fin-tech’, has been defined as, ‘Computer programs and other technology used to support or enable banking and financial services.’ The pioneering fin-tech that so many development experts love is M-Pesa, Kenya’s agent-assisted, mobile phone-based, person-to-person payment and money transfer system. M-Pesa’s origins lie in a project funded by the UK’s Department for International Development (DFID) in 2000 to encourage the private sector to improve access to financial services. M-Pesa was launched in March 2007 and expected to specialise in providing microcredit, but it was found that clients were more interested in the transfer of money, and so this became the focus of its activity. M-Pesa operates through a network of agents that allow clients to put cash into their account and take it out. By changing cash into ‘e-balances’, it is possible to send cash to another account via an SMS message. M-Pesa is owned by Kenya’s largest and most profitable company Safaricom, which in turn is majority owned (including through its South African subsidiary) by the UK telecoms multinational Vodafone plc.

Kenya stands at the front of the fin-tech movement thanks to M-Pesa and M-Shwari – a lending application also within the Safaricom group. But, thanks to the support of the international development community, the fin-tech revolution is spreading right across Africa. Digital payments are being introduced in many African countries, while fin-tech savings and loan platforms are expanding very rapidly indeed. One of the leading examples is MyBucks, the South African-owned (but registered on the Frankfurt Stock exchange) financial institution. MyBucks has been purchasing non-profit microcredit institutions and other ‘bricks and mortar’ lending operations all across Africa in order to turn them into hugely profitable fin-tech platforms, not least expecting to benefit by significantly upping the amount of expensive microcredit it can make available through a mobile phone.

However, it is largely thanks to M-Pesa in Kenya that the international development community now argues that a new digital utopia has arrived in Africa, i.e. that the further introduction and growth of fin-tech applications will play a major role in addressing the pressing need for meaningful poverty reduction, job creation and sustainable local economic development.

Unfortunately, the debate over the real value of fin-tech, including M-Pesa, is hopelessly one-sided since the fin-tech lobby itself is leading it. By this I mean the World Bank and its International Finance Corporation arm, USAID and DFID. These international development agencies also work in conjunction with a range of other private institutions with a keen self-interest in seeing the fin-tech model spread across the Global South, centrally including many of the major financial institutions (CitiGroup especially), leading Silicon Valley tech investors and investment funds, the two major digital payments companies (Visa and Mastercard) and a handful of high-profile Silicon Valley philanthro-capitalists (especially Bill Gates through his Gates Foundation). This effort is then further backed up by a plethora of fake ‘astro-turf’ NGOs, such as the Better than Cash Alliance (BTCA), that were set up by the private institutions noted above and which quietly do their bidding while presenting themselves to the world as if they are really all about ‘helping the global poor’.

The interests of all of the above parties are patently clear. For the international development agencies, it is about promoting an ideologically preferable ‘pure’ market-driven form of financial intermediation, while also benefitting American and British multinationals. For the multinationals and investors involved, the prospect of fantastic profits in a growing under-regulated market is more than enough to wet their appetites.

The power of the US-based philanthro-capitalists here should also be considered. Some analysts see them as neutral bodies when it comes to promoting interventions designed to assist the global poor, always being careful to choose ‘what works best’. However, this is simply not so. Look carefully and one can find that they are actually primarily engaged in validating and extending the system that conferred upon them their great wealth and power at the expense of many around the world, especially the poor; they have no interest in trying to change this system at all. Philanthro-capitalists support the fin-tech model to preclude any fundamental challenge to African capitalism. The neoliberal model of capitalism supremely validates and celebrates their achievements, and they have no wish whatsoever to change this. Fin-tech is a useful innovation to support because it provides the appearance of great things for the poor, but no substance.

As Anand Giridharadas points out, ‘American elites generally seek to maintain the system that causes many of the problems they try to fix — and their helpfulness is part of how they pull it off. Thus their do-gooding is an accomplice to greater, if more invisible, harm … What their “change” leaves undisturbed is our winners-take-all economy, which siphons the gains from progress upward.’ Like microcredit the US government-led fin-tech movement involves significant downsides for the poor, and keeps off the table alternative pro-poor development models and institutions, while it provides a whole array of ideological and financial gains for global elites.

What is the real development impact of fin-tech on the ground?

Alarmingly, the driving force behind the fin-tech revolution in Africa – market fundamentalist ideology and the aggressive drive for profit – are the very same two noxious components in the US financial sector that gave rise to the multiple frauds that created the global financial crisis in 2008. This fact alone is more than enough to suggest extreme caution. But emerging facts on the ground confirm that extreme caution is very much warranted.

Consider first that in the last decade or so conventional microcredit institutions had already begun to create a worrying level of indebtedness in Kenya. Reckless lending became a pervasive feature of virtually all maturing microcredit sectors across Africa. The arrival of fin-tech has clearly begun to exacerbate this over-indebtedness problem. This was almost inevitable when, for instance, many fin-tech lenders advertise their services with the claim that it is now possible to obtain a new microloan ‘at the touch of a few buttons on your mobile phone’.

Even one-time microcredit advocates are now sounding the alarm bells. Perhaps the most notable of these voices is that of Graham Wright, the founder and Group Managing Director of Microsave, one of Africa’s most successful financial inclusion consultancy companies. Microsave has succeeded down the years by advising governments and the international development community on the need to embrace the commercialised microcredit model and then, when it began to become clear that the microcredit model had failed, how to promote the new financial inclusion agenda. Launched by the World Bank, the financial inclusion movement is an effort to protect and hide the failed microcredit model by incorporating it into a new and wider agenda that argues the poor now need a whole range of market-driven financial instruments in order to better cope with their poverty.

Perhaps one of the worst aspects of the current over-indebtedness problems, however, is the impetus fin-tech has provided for the serious gambling problem currently afflicting Kenya and neighboring countries such as Rwanda, Uganda and Tanzania. Microcredit becomes the chance to be ‘in it to win it’ for so many of East Africa’s poor, offering them the hope of instantly escaping their poverty predicament, or at least a little excitement in an otherwise desperate daily struggle to survive. Young people are particularly susceptible to the allure of gambling, with all too many able to instantly access cash via M-Pesa and then sending it on to one of the many gambling sites. Entry inevitably starts with small sums, but regular gambling can result in major losses for those unable to quit.

Consider also those who choose to use their digitally-acquired microcredit for what it was originally intended – to create new microenterprises. This can only be good, right? Sadly, no. Rather than strengthening the local economy, such a trajectory often undermines it. For one thing, the sheer paucity of local demand means very many new enterprises simply cannot survive for very long; as many as 46 per cent of MSMEs in Kenya fail within a year after their establishment.

Worse still, even if enough new entrants are successful, their success will inevitably eat into the local demand that existing microenterprises were counting on to survive. This forces very many of these already struggling incumbents to contract or fail. Economists call this ‘job churn’, a highly unproductive entry and exit phenomenon that creates very few net sustainable jobs and generally makes the local economy structurally weaker. Further compounding the problem created, the ultra-competitive local market structure created by fin-tech lending helps to force average incomes down to the subsistence level. More of the poor might therefore be more active in their own new microenterprise, but all microenterprises in the community will tend to earn less on average, meaning that they are in work but poorer than ever. This was a huge problem in South Africa, when over 1997-2003 microcredit helped create many new informal microenterprises and some jobs, but this additional competition helped depress average incomes by a crushingly large 8 per cent per year. With the current high growth rate of fin-tech lending in Kenya and new fin-tech lenders emerging just about every day, it seems unlikely that such a negative scenario can be avoided there.

Academic Economists and Fin-Tech

But some academic economists say great things about fin-tech. By far the most talked-about contribution to date has been that by US-based economists Tavneet Suri and William Jack. Almost every article on the issue of fin-tech now quotes their astonishing headline claim that up to 194,00 households in Kenya (2 per cent of the total) were able to escape poverty between 2008 and 2014 thanks to their use of M-Pesa.

Unfortunately, this headline-grabbing claim by Suri and Jack is largely unfounded There are a surprisingly large number of defects in the work by Suri and Jack, which is somewhat surprising given that the two economists hold high academic positions in reputable US institutions. So where have they gone wrong?

First, Suri and Jack completely ignore the ‘job churn’ and lower average income effects just noted above. In spite of the clear evidence that failure rates of microenterprises are extremely high in Kenya, as everywhere in the Global South, they chose to assume that every women in Kenya who starts a tiny microenterprise with the help of M-Pesa must have succeeded. There is thus no need to explore in their analysis any of the familiar downside problems associated with the failure of a microenterprise. Of course, that is not to say that there are no positive impacts of new microenterprise entry in Kenya, but without looking at the impact of exit as well as entry we simply cannot tell. Inevitably, Suri and Jack also chose to ignore the displacement impacts affecting incumbent microenterprises. They conjured up instead a Disneyland-style world of perfect competition in which the local economy is sufficiently elastic to absorb any number of new microenterprises supplying lots more simple goods and services without creating any problems for anyone. It is not just sociologists and anthropologists, like Mike Davis, who well understand that such a rose-tinted model is fundamentally wrong, many development economists do too (notably the late great Alice Amsden).

Suri and Jack then compound their problematic analysis by also choosing to ignore the issue of the destructively high rates of individual over-indebtedness that now exist in Kenya. When it is evident to many economists (including surely their local researchers?) that M-Pesa has significantly extended this very serious problem, this is another major omission. And when leading financial analysts such as Graham Wright are vociferously arguing that the over-indebtedness situation is creating a huge problem, it is difficult to see why and how such a serious downside can be missed in any analysis of the development and poverty impact of M-Pesa.

Finally, as economists working in the neoclassical tradition, Suri and Jack dutifully refuse to consider issues related to the operations of power and imperialism in the sector and how they might shape markets in order to benefit above all one – the most powerful – side of any market transaction.

Accordingly, they have nothing to say about the fact that the majority owner of M-Pesa – the UK multinational telecoms giant Vodafone – is generating massive profits from its stake in M-Pesa, value that is ultimately harvested from the tiny and often desperate financial transactions and tiny business operations of Kenya’s poor. This profit stream is being repatriating back to already wealthy shareholders in the UK and in other global financial centres, just as in previous centuries, in fact, when mining and other activities allowed the UK’s colonial elites to extract significant wealth value from the country’s many colonial possessions.

All told, one really has to wonder if Suri and Jack’s work was ever meant to be a genuine effort to assess the value of fin-tech and M-Pesa. Or was it perhaps simply an output that was designed to provide a headline-grabbing claim that could then be used by the US-led international development community – notably the World Bank – to convince African governments into embracing fin-tech regardless of the hugely problematic impact it will have on their poor? We should remember that there is a track record of just this underhand tactic being used by certain sections of the international development community with regard to microcredit. In giving an unfeasibly positive view of the impact of microcredit in Bangladesh, two World Bank economists, Mark Pitt and Shahidur Khandker, nevertheless achieved the World Bank’s strategic goal of instantly validating microcredit in the eyes of the world, thus opening the way for its rapid expansion. When Pitt and Khandker’s analysis was later on largely debunked, this did not matter: its expansion around the Global South had been secured in the meantime and many financial corporations and investors in the leading financial centres in the rich countries were soon doing very well indeed from their profit flows originating in the Global South. So, are Suri and Jack the new Pitt and Khandker perhaps?

There is no doubt that fin-tech has the potential to liberate enormous value that could make the lives of the global poor immeasurably better; for example, allowing member-owned financial cooperatives and credit unions to provide better and cheaper services for their members while redistributing any profits from the operation right back to them. But the problem as it stands in Kenya – and wider still in Africa and the world – is that the bulk of the value being released by fin-tech is not designed to go to the poor, who will most likely be worse off: it is very clearly designed to go up into the hands of a narrow global financial-digital elite that are the main forces behind the fin-tech ‘revolution’.

The 2008 global financial crisis showed the world that an exciting new innovation said to be of huge benefit to America’s poor minority communities – sub-prime mortgages – was actually expressly designed to enrich a narrow Wall Street financial elite. If a similar deception is not to be perpetrated in Kenya and across Africa, then those genuinely committed to poverty reduction and social justice, must urgently take concrete action.

Milford Bateman is a Visiting Professor of Economics, Juraj Dobrila University of Pula, Croatia and Adjunct Professor of Development Studies, St Marys University, Halifax, Canada.

Featured Photograph: A poster advertising of the mobile payment service M-Pesa in Tanzania in 2008.

Black Consciousness and Anti-Capitalism: The Legacy of Steve Biko

ROAPE

September 13, 2018

Continuing our look at the life of Steve Biko, Heike Becker writes about two extraordinary events. The first was the formation of a Black organisation of student protest in 1968. The South African Student Organisation (SASO) was founded during a meeting exclusively attended by black students. Biko became the new organisation’s first President. The second was the astonishing friendship that developed between Steve Biko and Rick Turner. Together their political and philosophical ideas helped shape the massive strike wave in Durban in the early 1970s. Their murder – Biko in September 1977, and Turner in 1978 – put an end to the conversation between Black Consciousness and anti-capitalist notions of ‘participatory democracy’, which provided a brief glimpse of the possibilities of another South Africa.

By Heike Becker

In 2015 students at South African universities rose up in a mass revolt. Young women and men born after the end of apartheid in 1994 demanded free education; they forcefully insisted that tuition fees be scrapped, and also that the contents, methodologies and academic teachers reflect the post-apartheid ‘free’ South Africa.

In the new student movements the legacy of Steve Biko, who was murdered by the apartheid regime on 12 September 1977 became important again. Young students regarded Biko’s call to autonomous Black action as still relevant for contemporary South Africa. Black Consciousness philosophy gained significance again when students insisted upon the reform of curricula, which they said conveyed racist and colonialist forms of knowledge and ignored, even scorned African intellectual experience. Calls on black people to first free their own minds, become conscious of their own, and each other’s conditions and work together to change the material conditions of black students have been the guiding principles of the new South African student movements as they were for the generation of the 1970s.

A brush with the police: Biko’s early politicisation

Stephen Bantu (Steve) Biko was born in what is today the Eastern Cape province of South Africa on 18 December 1946. His father worked as a policeman, and later as a clerk in the King William’s Town Native Affairs office. He was also enrolled for legal studies at the University of South Africa (UNISA), the distance-learning university. Steve’s father died suddenly in 1950, when Steve was four years old. His mother subsequently raised the children on her own, working as a cook at a local hospital.

In 1962 Steve started his senior secondary schooling at the famous mission educational insitutiton in the Eastern Cape, Lovedale college, where his elder brother Khaya was already a student. Khaya, who was politically active with the Pan Africanist Congress (PAC), became a major influence on Steve’s introduction to resistance and liberation politics. A few months into Steve’s studies at Lovedale the Biko brothers were taken into custody by the police. Khaya, who was suspected of being involved with Poqo, the armed wing of the PAC, was charged and sentenced to two years imprisonment, with 15 months suspended. Steve was interrogated by the police and though released he was subsequently expelled from the school after only attending it for three months.

Though he was forced to return home he continued going to classes at Lovedale, where he became friends with Barney Pityana, at the time a student at the school. This friendship became significant in the formation of the Black Consciousness movement, and especially the South African Student Organisation (SASO).

Black Consciousness ideology and the formation of SASO

SASO arose out of profound revolts against apartheid and institutional racism, which spread across South African universities from the mid-1960s. In 1968 at Fort Hare, a fairly independent black institution for higher education, students boycotted the installation of the new rector Johannes Marthinus de Wet, a member of the Afrikaner broederbond (a secret society of male white nationalists). Later in the year the university was closed and 23 students, among them Barney Pityana were not allowed to come back. Significantly, a new organisation of student protest arose in the very last days of 1968 when SASO was founded during a meeting, exclusively attended by black students. This event took place at Mariannhill, a Catholic mission west of Durban, and the site of St. Francis College, a coeducational independent secondary school, which was the alma mater of Biko, from which he had matriculated with very good grades in 1965 and subsequently taken up studies at the ‘non-European’ medical school of the University of Natal. Biko became the new organisation’s first President when SASO was officially inaugurated at the Turfloop campus of the University of the North (UNIN) in July of the following year.

The developments that led to the formation of SASO need to be understood in the politics of South Africa’s 1968 moment, a reinvention of the politics of protest. The late 1960s and early 1970s saw the emergence of new repertoires of resistance in student protests. Yet SASO’s formation was also due to the complex relations of black students with the country’s long-existing national student organisation NUSAS (National Union of South African Students). NUSAS, which had been founded in 1924, was open to students of all races.

At the ‘black’ universities which had been established as apartheid institutions in the early 1960s small numbers of students joined NUSAS, and at some institutions battles took place for permission to form autonomous Student Representative Councils (SRC) and to affiliate to NUSAS. Yet there also was frustration about racist tendencies within the student association. At issue was that NUSAS despite its multiracial membership was essentially dominated and controlled by white students.

In 1968 Biko and others thus formed SASO, which for political reasons offered membership to students of all ‘black’ sections of the population, which included those assigned to the apartheid categories of ‘African’, ‘Coloured’ and ‘Indian’. In 1971 the SASO Policy Manifesto set out the Black Consciousness doctrine.

On the organisational level, the SASO activists held that to avoid domination by white ‘liberals’ black people had to organise independently. In 1970 Biko wrote in the SASO Newsletter, suggestively signing as ‘Frank Talk’:

The role of the white liberal in the black man’s history in South Africa is a curious one. Very few black organisations were not under white direction. True to their image, the white liberals always knew what was good for the blacks and told them so…

Nowhere is the arrogance of the liberal ideology demonstrated so well as in their insistence that the problems of the country can only be solved by a bilateral approach involving both black and white. This has, by and large, come to be taken in all seriousness as the modus operandi in South Africa by all those who claim they would like a change in the status quo. Hence the multiracial political organisations and parties and the ‘nonracial’ student organisations, all of which insist on integration not only as an end goal but also as a means.

Black Consciousness as SASO’s official ideology was profoundly influenced by the SASO leadership’s reading of Frantz Fanon, particularly the militant philosopher’s Black Skin, White Masks and the African-American Black Power movement. In the early years the focus was on the psychological empowerment of black people; they believed that black people needed to rid themselves of any sense of racial inferiority, an idea they expressed by popularizing the slogan ‘black is beautiful’. As early as 1971, the SASO leadership discussed proposals to cast off the students-only attitude, including the formation of a Black Workers’ Council (later renamed the Black Workers Project) and launched the Black People’s Convention (BPC), a new political movement that would soon run alongside SASO. Practically the activists organised Black Community Programmes (BCPs).

In the early years of its existence, the all-black SASO was allowed space to grow at the black universities, in part because the government regarded the separate black student association and its emphasis on largely psychological-oriented black consciousness as quite compatible with the apartheid ideology. They were to learn soon that SASO, and more generally the ‘black conscious movement’ that Biko promoted, posed a major threat to the regime. But by the time that SASO began to be more active in political campaigns, from about 1972 onwards, the organisation had established already firm structural roots, which made it difficult for the government to entirely suppress it.

An early example of the dialectics of repression and radicalised politicization included the 1972 student protests at ‘Turfloop’ after the Student Representative Council (SRC) President, Onkgopotse Tiro, was expelled after speaking out against Bantu education during a graduation ceremony at the university. 1974 became a crucial year. In January SASO officially condemned the presence of the Apartheid forces in Namibia; the organisation also reaffirmed the non-collaboration stance of the Black Consciousness Movement and condemned the Bantustan leaders. In September of the same year a rally celebrated the ascension of FRELIMO (the Mozambican liberation movement under the leadership of Samora Machel) into power in Mozambique was held despite the refusal to grant permission for the action.

Repression followed suit. Eighty SASO and BPC leaders were detained without trial for their support of the pro-FRELIMO rally and during the following year tried at the Supreme Court in Pretoria, eventually in 1976 they were sentenced and incarcerated on Robben Island. In 1974 SASO was listed as one of the affected organisation under the Affected Organisation Act of 1974. This prohibited it from receiving foreign funding to pursue its objectives. In July 1975 SASO held its annual conference under very difficult conditions. Only one member of the executive committee could attend the meeting. The rest of the executive members were either banned or had been arrested. Finally in October 1977, SASO and other Black Consciousness organisations were banned under the Internal Security Act. The most brutal example of repression of course was the murder of Steve Biko while in detention in September 1977.

The ‘Durban Moment’

As South African student politics radicalised, the protests initially confined to university politics grew beyond campus concerns; they became instrumental in laying the grounds for the new black trade unions that emerged in the 1970s. In some instances, black and white students, and a few younger, radical academics, worked together in these new-left politics. Radical academics were involved particularly in the efforts around strikes and black labour unions. The connection between students, radical academics, workers and other marginalised social groups becomes brilliantly apparent in the ‘Durban moment’, probably the most significant political development ensuing from South Africa’s 1968. The ‘Durban moment’ is often regarded as the beginning of the new wave of resistance that led to the Soweto uprising, the massive uprisings of the 1980s and eventually the demise of the regime.

Early 1973 saw a massive strike wave in the port town of Durban. By the end of March 1973, almost 100,000, mainly African workers, approximately half of the entire African workers employed in Durban, had come out on strike. Through songs and marches, workers made their demands heard – the first public mass action since the political activism of the 1950s. This was political action, and also more immediately a labour revolt; workers exercised the power of factory-based mass action.

What looked like spontaneous strikes, originated in a complex mix: low wages, the humiliation of pass laws and racism, the hardship of migrant labour, forced removals, and significantly the denial of black workers’ right to organize. The strikes signalled the growth of militant non-racial trade unionism, and in a wider sense a revived spirit of rebellion in the country.

There were links between the eruption of workers’ action and the underground liberation movements; the resurgence of Marxist thinking among a new generation came into play. There was however also, though this has sometimes been denied, decisive influence of the recently emerged Black Consciousness movements’ ideas. Of special importance was the links between activist intellectuals, who in different ways embodied South Africa’s 1968 moment, thinking in new ideological perspectives, and having tried out new methods of activism. Most significant here was the special political alliance, intellectual and personal friendship between Steve Biko and Richard (‘Rick’) Turner, a lecturer in political philosophy at the University of Natal, who held a doctorate on the political works of Jean-Paul Sartre, which he had completed at the Sorbonne in Paris. In the early 1970s Turner was a researcher into labour issues, and a community and labour organiser in Durban, deeply influenced by the French Left, including Althusserian readings of Marxism.

Turner’s and Biko’s philosophical and political ideas significantly shaped the massive strikes in Durban in the early 1970s and continued to impact on the resistance movement against apartheid in different ways throughout the 1980s. Biko’s radical emancipatory Black Consciousness ideology in conversation with Turner’s anti-capitalist notion of ‘participatory democracy’ provided a brief glimpse into the possibilities of another South Africa.

The murder of Biko while in police detention in September 1977, and the assassination of Turner a few months later, in January 1978 at his home in Durban were devastating for their families, friends and comrades. They were shattering too for the country’s politics of resistance, closing off new non-authoritarian radical forms of resistance. Biko’s (and Turner’s) imaginative power and creativity, and their reflection on alternatives to apartheid beyond the management of the state by the liberation movement in power remains a tremendous inspiration.

Heike Becker is a regular contributor to roape.net, she is an activist and writer. As a professor at the University of the Western Cape she teaches anthropology and writes on politics, culture, and social movements across the continent.

Featured Photograph: A poster produced to celebrate the Durban strike wave in 1973.

Understanding Steve Biko: Race, Class and Struggle in South Africa

ROAPE

September 12, 2018

On the anniversary of Steve Biko’s murder, ROAPE’s Remi Adekoya speaks to South African scholar and activist Mosa Phadi. Phadi reflects on the legacy of Biko’s radical and important thought, but also discusses how he did not consider cohesive alternatives that could now serve as a counter to neoliberal ideas. In a wide-ranging interview Phadi also looks at the political and economic crisis in South Africa, the Economic Freedom Fighters, the failures of the ANC and the possibilities of a solution in the militancy and consciousness of working-class struggle.

Remi Adekoya: Today is the anniversary of Stephen Biko’s murder by apartheid state security operatives. He has since become a hugely symbolic rallying figure for many black people, especially in Africa, but not only. What is your take on Biko’s legacy today and how he is being historically positioned?

Mosa Phadi: I have a problem with how Stephen Biko is positioned by the likes of Donald Woods, his friend and biographer, who ascribes the whole philosophy of Black Consciousness to Biko as if he emerged in a vacuum. His argument is basically that at the time Biko emerged, the Pan-African Congress (PAC) and the African National Congress (ANC) were both banned organizations, and so Biko’s arrival filled a void in the struggle for black freedom.

However, if you think about the historical context of that time, this was not the case. Biko along with other students started the South African Students’ Organization (SASO) movement in 1968. If you think about 1968, this was a year of global protests; you had the anti-Vietnam war protests, huge civil rights demonstrations, student protests. Also going back, there was the background of Ghana becoming the first African country to gain independence from colonial rule in 1957, an event which bolstered other pro-independence movements across the African continent. There was Julius Nyerere in Tanzania talking about an ‘African socialism’.

Prior to the 1960s even, there was the 1954 Women’s Charter in South Africa demanding equality between men and women, there was the Women’s March of 1956, the Sharpeville massacre in 1960, civil disobedience during that period and many other instances of struggle against oppression. So, portraying the South African struggle as essentially being fought by the PAC and the ANC, and thus once these organizations were banned, there was some sort of a lull in the fight against oppression and apartheid is a false analysis.

Another underreported issue about Biko and the era he came of age in is how caught up it was in the unravelling contradictions of Stalinism and the Soviet Union in general. Clearly, this was no longer an alternative as many had imagined after WWII and most black activists, including the Black Panthers were thinking about stretching Marxism, using its insights when it came to party organization, but viewing the lumpen-proletariat in primarily racial terms as Fanon did.

There are similarities between Biko and Stokely Carmichael in terms of organizing students initially using non-violent tactics but later becoming militant and asserting blackness or ‘reclaiming blackness’ as Stokely would call it. At the same time Malcolm X was also in the picture, claiming blackness as the oppressed but also as the revolutionary agent. Workers were also organizing.

Acting as if nothing existed before, during or after Biko is a failure in analysis. It is important to emphasize that he emerged in a period when a splintering of ideas and ideological eruptions were occurring elsewhere and these in turn informed his ideas.

Biko’s idea of Black Consciousness even though original in the context for South Africa, was very similar to Carmichael’s ideas. My point is that I am critical of those who try to sanitize that history by decontextualizing the progression of his political ideas.

Having said all that, Biko was a very important thinker whose ideas have been adopted by many movements. His ideas of black consciousness were important in focussing on what apartheid did to the psyche of black people. He talked about reclaiming blackness, but also put thought into how we as black people in South Africa should relate to coloureds and Indians as the oppressed. He emphasized that while there was a hierarchy of racial oppression, we all needed to approach the system as an oppressed collective.

Black consciousness is an idea that works best in a racist white-supremacy capitalist setting. However, its interpretation today is very neo-liberal. You hear talk of ‘black excellence’ for instance, there’s nothing wrong with that per se, but it is a concept tied to a neo-liberal framing that focuses on the individual. Such an approach will not help break with the system, but rather perpetuates inequalities, as capital by nature produces these inequalities. If you view yourself as an individual focused on achieving ‘black excellence’ forgetting about structures which produce inequalities, then you are not helping solve the problem. If such views prevail, then a few successful individual blacks will be put on a pedestal by black people as symbols of black excellence and black power while a system perpetuating inequalities continues to produce mass poverty.

Biko’s solutions to black problems were twofold: black consciousness and black economic empowerment. The second part is much emphasized recently, we see this even in the now popular ‘township economy’ in South Africa which is fundamentally neo-liberal in its philosophy. The Provincial government in the economic hub of South Africa seeks to encourage entrepreneurial culture in various townships. Hence, wants to support Black businesses. This idea of growing Black businesses was part of Biko’s emancipatory approach. Biko wanted to create Black markets and expand Black business ownership. Once a radical idea it is currently used to justify elite formation especially among politically connected individuals.

Biko’s ideas, while radical at that time don’t get me wrong, nevertheless played into this bourgeoise democracy we find ourselves in, his ideas were radical and important at that time, but he did not think much about cohesive alternatives that could now serve as counters to neoliberal ideas.

Which of Biko’s ideas are popular today among South African intellectuals?

His death in 1977 sparked militancy amongst people, for example when you think of the 1980s insurgence, I think part of the courage emerged from Black Consciousness ideas of reclaiming Blackness. His thoughts about what black freedom should look like, what type of mentality we need to achieve it and via which methods, still permeate today through various social movements. For instance, the Fees Must Fall student movement sparked in 2016 about statues which still perpetuate symbols of black inferiority quoted Biko extensively and his views were manifest in their demands. They demanded that first and foremost statues of people like Cecil Rhodes must go, the curriculum must change and there should be a higher representation of intellectuals who look like us teaching us, for example.

People still gravitate towards Biko today because when you read his work you can relate to it as a black person. Even though he wasn’t a traditionalist who believed in fixed cultures, he was very aware of the role cultural norms and values play for everyday Africans in their everyday lives. For instance, he knew religion was important to people and his spiritual outlook moved beyond Christianity and incorporated ideas of ancestors. He talked about how music can enlighten the wounded soul, he tapped into daily experiences realizing the potential of everyday culture to radicalize and galvanize people into action. When you read him, he sparks the radical spirit in you to say: ‘yes, we can fight the system, yes we have the right to fight the system.’ But then apart from this, you need to think what kind of world you want to replace the current system with. This is where his limitations were. But as a light to spark action, he was very important.

What are some of the most popular ideas among South African intellectuals today regarding the way forward for the country?

In academia, especially after the Fees Must Fall movement, the most popular issue is that of decolonization. Seminar after seminar, conference after conference and article after article have been written on this. The main inspiration comes from Latin American scholarship emphasizing the need to decolonize, for example, the knowledge system amongst other broader structural issues in South Africa which are inherently Western-oriented and steeped in racism. This is the most popular school of thought today.

Marxist ideas have been rejected, as indeed Biko rejected them in his day. The link between class and race has not been integral in our analysis, Marxism failed to incorporate race into the equation. Meanwhile, issues centred around our history and oppression are very important to people. People use terms like ‘triggers’ to refer to pain that has been inflicted upon us in the past and emphasize that we need to remedy that. However, Marxism in South Africa is unable to offer an analysis of how a history of racial oppression and being black frames how people relate to various struggles beyond the workerist approach.

Julius Malema’s Economic Freedom Fighters (EFF) are quite popular today both among the Working Classes and some black intellectuals. This is due to the failure of ANC to radically change peoples lives in the townships where there is huge unemployment. I come from a town called Kagiso. When I go home, on a weekday, it seems like a weekend there, young men and women on the streets with no jobs. There are protests virtually non-stop, people demanding services. In the 1990s, people waited patiently for change, but by the 2000s, they started realizing it was not happening. This has sparked some xenophobic attacks like recent ones on Pakistani shop-owners which were looted by people complaining they were selling stale food. Taxes have increased, VAT was increased this April leading to steep hikes in food prices. There is tension everywhere.

This is the crisis we’ve been in since Ramaphosa became the president, squeezing not just the poor but the middle-class as well. This has created space for EFF, especially with Malema forcing the conversation about race into the public forum. Up till then, the left had been fixated with class while the conversation about race had been muted. The left focussed on economic structures, neglecting the everyday manifestation of being black. They missed the feelings young people had about being not just poor, but poor and black as well. Malema exploited this very well. He too uses Black Panther methodology, utilizing a Marxist-Leninist model of party structures combined with Fanonian elements incorporating race and treating the racially-oppressed individual as a revolutionary subject. Again, this goes back to 1960s ideas before and during Biko’s activist period. Although embroiled in some corruption scandals themselves, EFF has attracted young unemployed people, mainly men, but also some middle-class people who have experienced racism in the corporations they work in, which are still largely owned by white people. Some black intellectuals have also been drawn to EFF.

However, many of the protests on the streets demanding basic services like water and electricity are not organized by any political party or movement, they have no specific policies, they simply want services. The new student movements, meanwhile, are not only using Biko as a symbol, but also challenging gender dynamics, ideas of feminism have become key debate in struggles with power and patriarchy. Women are protesting against domestic violence and patriarchy, again taking us back to the ideas of the 1960s which are coming back in different ways. In general, revolutionary ideas about race and gender dating back to the 1950s and 60s are returning, the only difference is that they are emerging today in modern form and style, especially with the proliferation of social media which can be used to spread a message very rapidly.

Is there any party who, in your opinion, if they came to power, would best deploy that power towards the betterment of the people? You’ve mentioned EFF in a rather positive light but said yourself they have been implicated in corruption scandals too. On what basis do you do associate them with any hopes of true positive change for downtrodden South Africans? As you know, history is replete with examples, plenty in Africa unfortunately, of people riding to power on the back of all sorts of equalitarian slogans only to gorge themselves on the state’s resources once they get there.

Well, what are the options? There is the Democratic Alliance which is a very liberal party, so you are assured of a set of liberal economic policies if they get into power. Additionally, they seem to place no emphasis on our history and don’t recognize the psychological scars apartheid has left on black people. Ideologically, this is thus not a viable option for me. Then you have the ANC and the EFF. EFF wants state capitalism. They should be understood as a party that is left of the ANC, not that leftist you understand, but simply left of the ANC. I will vote for them. Not because I believe they, or any other party, can emancipate the working-class. No, the working-class have to find the agency in themselves to fight for themselves.

No politician or political party will save the working class or the poor, let’s not be delusional. For me, the hope is that the working-class will organize and fight for themselves. EFF wants state capitalism and this can go two ways as history shows. It can become very authoritarian or focus on building new forms of elites. EFF is important for debates linking race to class, but I don’t naively believe they will be our saviours. As always, the working-class will continue trying new parties, hoping for something better. But only their militancy can force change. EFF is a child of the ANC and they cannot break away from the corrupt links of the ANC.

What then would be the value added of the EFF for regular South Africans were they to one day win power?

If they come to power, of course there will be reforms, they wouldn’t be able to just rule in a business-as-usual fashion. They would have to make concessions to the poor. The land question would be addressed, land would become state-owned. With regards to key financial sectors like mining, they are currently trying to propagate a 3-way ownership system in which the state would own say, 50% of a mine, the community 10% and the rest would be privatized. They want to show capital they are ready to negotiate with it while at the same time trying to sustain their radical image.

But they have opened a space in the debate, emboldened people to believe they have a right to push. I know the militancy they came with can’t be sustained if they win power. If they win, there will be some big reforms, but there would be contradictions too, no doubt. And yes, there is the danger of dictatorial tendencies in them. That is the risk involved with them. Yet, I still think the working-class should vote for EFF demanding some specific reforms.

So, basically you accept they are a risk, but think they are a risk worth taking?

Yes, I do. Also, one major issue they deserve credit for pushing onto the agenda as well is that of land reform, the idea of the expropriation of land without compensation. Even though there were various landless people’s movements in the 2000s, EFF emboldened that demand and now parliament has passed a resolution to amend the constitution allowing for land expropriation without compensation. However, right now, public consultations are being held, expected to end with a report by end of September.

If President Ramaphosa eventually signs that amendment into law, is there any plan in place for how exactly this process would look?

No, right now there has not been any debate on who would get what and on what grounds. The politicians are simply caught up in the militancy of the people who are demanding reforms. This whole land issue also reflects ideas popularized by Biko years ago. Apart from the physical desire people have to get their lands back, it is also part of a psychological recognition that this is your land. The planning of our cities today is still the same as it was under apartheid with developers able to keep certain areas exclusively rich and white. Or even in the rural areas, you have a situation where all the best farmland is owned by whites, so they are the farmers while the blacks are simple village residents with a few black people who managed to carve their space in the agricultural sector. People are now imagining a different kind of space; a different kind of South Africa and politicians are rushing to respond because they want votes. But the discussion about who will get what and whether this process will really empower the poorest South Africans has yet to be started.

Mosa Phadi completed her PhD at the University of Johannesburg in 2017. She has worked for years on questions race and class, including two ground-breaking reports on the local municipalities of Mogalakwena and Lephalale. She has worked as a researcher for over six years, published peer-reviewed articles and producing a research documentary film focusing on the idea of a middle class in Soweto.

Feature Photograph: a photograph of Steve Biko from South African History Online.

Free Access to Special Issue on Radical Political Economy

ROAPE

September 11, 2018

Free Access to ROAPE Connections Special Issue: Radical Political Economy and Industrialisation

ROAPE held the first of three workshops in Ghana, Accra on ‘Radical political economy and industrialisation in Africa’, 13–14 November 2017. Our publisher Taylor and Francis have made the special issue from the workshop accessible until the end of the year. This Debate Special Issue from Volume 46, Issue 56 discusses the initiative of holding the Africa-based ROAPE meetings, why they are important and how they relate to historic socio-economic transformations, the most significant of which remains the great Bolshevik Revolution of 1917, whose centenary month coincided with the Accra workshop.

This is the first of the workshops which ROAPE has sponsored across the continent in cooperation with local organisations. A similar version of the Accra meeting, held in Dar es Salaam in April of this year, will appear in a forthcoming issue. These workshops deliberately avoid an academic character and included a substantial proportion of activists from across the continent as well as academics and those who fit both descriptions. The feedback from participants has been very positive, as is evidenced by the response of speakers and other participants alike in respectively submitting their presentations and blogposts. The workshops have been filmed and we have made some of the footage available on roape.net (click here).

Most importantly for ROAPE these workshops reflect on the journal’s original political purpose: to provide a forum for progressive and socialist activists and academics on the African continent which provides an analysis of African realities that will assist, however modestly, progressive forces in their struggles against corporate imperialism. The workshops also reflect the other founding purpose of the journal: to find or stimulate answers to the question of what is to be done to effect radical change, a question more on the agenda today than ever before.

This Debate Special Issue features contributions from Yao Graham, Ray Bush, Leo Zeilig, Peter Lawrence, Giuliano Martiniello, Ben Fine, Max Ajl, Bettina Engels, Gordon Crawford and Gabriel Botchwey, discussing the revolution in Burkina Faso, artisanal mining in Ghana, financialisation and industrialisation across the continent and large-scale land and agricultural investments in Uganda and Tanzania.

To read the full Debate Special Issue from Accra, please click here.

The Limitations of Truth Commissions: Lessons from Kenya

ROAPE

September 6, 2018

Introducing her new book released this week, Gabrielle Lynch provides a radical analysis of the mechanisms of transitional justice. Looking at the case of Kenya, Lynch argues that truth commissions which hope to achieve truth, justice and reconciliation also require ongoing political struggles, and substantive socio-economic and political change. While reconciliation and justice may be goals which truth commission can recommend, and sometimes contribute to, they cannot be expected to achieve them.

By Gabrielle Lynch

In today’s world, it is almost expected that a truth commission will be introduced in the wake of conflict or a period of authoritarianism to try and consolidate a transition to democracy and peace. A truth commission generally understood – as per Priscilla Hayner – as a temporary state-sanctioned body that investigates a pattern of past abuse, engages ‘directly and broadly with the affected population, gathering information on their experiences’ and which aims to conclude with a public report.

The underlying idea is that societies need to confront and deal with unjust histories if they are to establish a qualitative break with that past. Proponents of modern truth commissions thus ‘look backwards’, not as interested historians, but as a way to ‘reach forwards.’ As Archbishop Desmond Tutu explained in his foreword to the South African Truth and Reconciliation Commission (TRC) report:

The other reason amnesia simply will not do is that the past refuses to lie down quietly. It has an uncanny habit of returning to haunt one … However painful the experience, the wounds of the past must not be allowed to fester. They must be opened. They must be cleansed. And balm must be poured on them, so they can heal. This is not to be obsessed with the past. It is to take care that the past is properly dealt with for the sake of the future.

Motivated by this desire to render the past ‘passed’ in the substantial sense of being ‘dead’ or ‘over and done with’, modern truth commissions dedicate most of their time to two activities: the holding of public hearings and production of a final report.

This is a relatively recent development. Early truth commissions did not hold public hearings and were largely fact-finding bodies. However, ever since the South African TRC of the 1990s, truth commissions have held hearings as a stage for various actors – victims, perpetrators, political parties, state institutions and so forth – to present their account of past wrongs. The underlying idea is that people will have a chance to speak and be heard, and thus regain their humanity; that a wider (and engaged) audience will bear witness to a new human rights-conscious regime; and the overview provided will feed into, and help legitimise, a final report. The latter in turn intended to record and acknowledge past wrongs and provide recommendations that can help to promote truth, justice and reconciliation.

However, while much hope is often placed, and much time and money expended, on truth commissions and their hearings and final reports, it is evident that these processes generally fall far short of ambitious goals and high expectations. But what explains this gap between aspiration and reality?

This is one of the questions that I address in a new book – Performances of Injustice: The politics of truth, justice and reconciliation in Kenya – which analyses several transitional justice mechanisms introduced following Kenya’s post-election violence of 2007/8 when over 1,000 people were killed and almost 700,000 were displaced.

This includes the establishment of the Truth, Justice and Reconciliation Commission (TJRC). Significantly, the Commission’s mandate recognised that, while the 2007/8 post-election violence was triggered by a disputed election, it was fuelled by more deep-rooted problems. In turn, the Commission was tasked with investigating a wide array of injustices – from state repression and causes of political violence to perceptions of economic marginalisation and irregular land acquisition – between Kenya’s independence in 1963 and the end of the post-election violence in February 2008.

Established through an Act of Parliament in 2008, and operational from 2009 to 2013, the TJRC sought to meet its mandate, in large part, by collecting statements (with over 40,000 collected in total), holding public and women’s hearings in 35 locations across the country and adversely mentioned person (AMP) hearings in western and Nairobi, and publishing a substantial final report that runs to over 2,000 pages.

Despite such achievements, the Commission was soon mired in controversy with calls for the chairman – who was soon linked to three injustices that the Commission was meant to investigate – to resign, while the public hearings attracted little media attention, and the final report is yet to be discussed in parliament let alone implemented.

The Kenyan experience highlights a range of lessons and insights. This includes the fact – as recently outlined in a piece for The Conversation – that transitional justice mechanisms are not ‘tools’ that can be introduced in different contexts with the same effect. Instead, their success (or failure) rests on their design, approach and personnel – all of which are incredibly difficult to get right – but also on their evaluation and reception, and thus on their broader contexts, which commissions have little or no control over.

However, the lessons that can be drawn go beyond reception and context and extend to the inherent shortcomings of such an approach.

First, while victims appreciate a chance to speak and be heard, the majority clearly submitted statements or memoranda or provided testimony in the hope that they would be heard and that some action would be taken to redress the injustices described. As one woman explained after a women’s hearing in Nakuru, she was glad that she had spoken and how, having told her story, the Commission would ‘come in and help.’

To be fair, the TJRC’s founders were aware of the inadequacies of speaking, which is why they included ‘justice’ in the title and gave the Commission powers to recommend further investigations, prosecutions, lustration (or a ban from holding public office), reparations and institutional and constitutional reforms.

However, on the question of whether recommendations would be implemented, the Commission rather naively relied on the TJRC Act (2008), which stipulated that ‘recommendations shall be implemented.’ However, such legal provisions proved insufficient. Amidst general scepticism about the Commission’s work, parliament amended the TJRC Act in December 2013 to ensure that the report needed to be considered by the National Assembly – something that is yet to happen.

Moreover, to document and acknowledge the truth requires that one hears from both victims and perpetrators. However, the latter often have little motivation, and much to lose, from telling the truth. This was evident in Kenya where, during the AMP hearings I attended, where I heard little that was new and not a single admission of personal responsibility or guilt. Instead, testimonies were characterised by five discursive strands of responsibility denied: denial through a transfer of responsibility, denial through a questioning of sources, denial through amnesia, denial through a reinterpretation of events and an assertion of victimhood, and denial that events constituted a wrongdoing. However, while AMPs denied responsibility, none denied that injustices had occurred. As a result, while the hearings provided little clarity on how and why a series of reported events may have occurred, they simultaneously drew attention to, and recognised, past injustice. In this way, they provided a public enactment of impunity: Kenya’s history was replete with injustice, but AMPs were unwilling to shoulder any responsibility for it.

This ongoing culture of impunity points to another issue, which is that – for most victims – injustices clearly do not belong to the past but to the present and future. The loss of a person or income, for example, often constitutes a course that now seems beyond reach – from the hardship that accompanies the loss of a wage earner to the diminished opportunities that stem from a child’s extended absence from school. However, the past also persists in other ways, from the injustices that never ended, such as gross inequalities or corruption, to fears of repetition and experiences of new injustice.

Unfortunately, the idea that one can ‘look backwards to reach forwards’ downplays the complex ways in which the past actually persists, and possible futures infringe on the present. This is problematic since it can encourage a situation where small changes dampen demands for more substantive reform. At the same time, it can facilitate a politicised assertion of closure that excludes those who do not buy into the absence of the past, the newness of the present, or the desirability of imagined futures and provides a resource to those who seek to present such ‘difficult people’ as untrusting, unreasonable and unpatriotic.

This is not to say that truth commissions are useless and should never be considered. On the contrary, many view speaking as better than silence, while the commission’s report provides a historical overview of injustice in Kenya and a range of recommendations that activists and politicians are using to lobby for justice and reform.

However, when introduced, truth commissions should be more aware of the importance of persuasive performances and how their initial reception and longer-term impact is shaped by broader socio-economic, political and historic contexts. Truth commissions also need to adopt a more complex understanding of the ways in which the past persists, and possible futures infringe on the present and avoid easy assertions of closure.

Ultimately, such ambitious goals as truth, justice and reconciliation require not Freudian ‘talk therapy’, although catharsis and psycho-social support are often appreciated, but an ongoing political struggle, and substantive socio-economic and political change, which something like a truth commission can recommend, and sometimes contribute to, but cannot be expected to achieve.

Gabrielle Lynch is Professor of Comparative Politics at the University of Warwick and a member of the Editorial Working Group of ROAPE. She is the author of Performances of Injustice: The politics of truth, justice and reconciliation in Kenya and I Say to You: Ethnic Politics and the Kalenjin of Kenya. More information on her research can be found here.

Ghana’s War on Piracy: Copyright and Human Rights in Africa

ROAPE

September 3, 2018

In this blogpost Christiaan De Beukelaer and Martin Fredriksson contribute to roape.net’s ongoing discussion on fraud, economic trickery and crime in Africa today by initiating a critical discussion about the war on piracy. Ghana’s economy might look like a success story with a continuously growing GDP, but the statistics actually hide growing inequalities which also creates stronger breeding grounds for informal markets of various kinds.

By Christiaan De Beukelaer and Martin Fredriksson

Since the 1990s, representatives of the global media industry have been lobbying politicians and law enforcement, locally and globally, to strike down on rampant piracy of movies, music and videogames. Whether the target is kids browsing torrent sites in the basements of Europe and North America or CD vendors at street markets in in Asia and Africa, the war on piracy has been relentless. In March 2012, an Accra Metropolitan Police action by the name Operation Jail The Pirates led to the arrest of 19 people during a raid of alleged music pirates at Kwame Nkrumah Circle, a busy traffic intersection and market place in Accra. In court, five of them were sentenced under the Ghanaian 2005 Copyright act to hefty fines. Due to lack of funds, the court defaulted on the fines and transformed their sentence into 2-year prison sentences.

**A Street Vendor Selling Music at Tema Station in Accra, Ghana (Christiaan De Beukelaer)**

GHAMRO, the Ghanaian Collective Management Organisation that manages rights and collects royalties on behalf of copyright owners, were one of the driving forces behind this police and legal action. In their claim to ‘clean up’ illicit activity in music distribution, they have focused on suppressing piracy as opposed to integrating existing distribution mechanisms (such as street vendors illicitly selling MP3s) into the formal music economy. As early as 2013, they claimed to be working towards a digital platform for music distribution as well as licensing options for street vendors that would enable the vendors to clear the rights to the products and run a legitimate business. As yet, no such structure is in place as GHAMRO seems to prioritize chasing down pirates. Moreover, neither the general public, nor most pirates, do not necessarily understand the copyright laws that GHAMRO are trying to enforce

The Ghanaian musicologist John Collins discusses a similar example from 1987 where the Ghana Tape Recordists Association (GTRA) attempted to license their cassette tape copying businesses with the National Phonogram Producers Union (NPPA). However, the initiative backfired when the Musicians Union of Ghana (MUSIGA), financially supported by the global record industry through its lobby organisation the International Federation of Phonogram Industries (IFPI), opposed the agreement. This well-documented case shows that the search for alternative models of licensing and copyright enforcement – which are better adapted to the existing modes of music distribution and the needs and preferences of consumers in Ghana – were opposed by major international players (IFPI), based on their strict reading of existing International Property Rights (IPR) agreements.

Both the cases of 2012 and 1987 speak to the limits to contemporary copyright debates, not only in Ghana but also globally as international organizations have been taking active part in shaping the strategies of the national actors. Discussions about legislation and enforcement lack closer analysis as they uncritically rely on the assumption that piracy is inevitably destructive to cultural and economic development and needs to be met with stronger copyright laws and stricter enforcement.

The conflicts around piracy and copyright enforcement are not unique to Ghana and exclusively related to its institutions, legislation, and enforcement (though that certainly matters too). The roots of these tensions need to be contextualised as a matter of international political economy. Piracy is a globally contested issue, not the least in Africa and elsewhere in the Global South that are often portrayed as lawless and eroded by copyright infringement, particularly towards the music and entertainment industry.

Uneven distribution of resources is obviously a contributing factor to the growth of piracy in the Global South. As David Johnson argues, Ghana’s economy might look like a success story with a continuously growing GDP, but the statistics actually hide growing inequalities between rich and poor, which of course also creates stronger breeding grounds for informal markets of various kinds. Furthermore, Johnson argues that there are strong indications that fraud increases in liberalised emerging economies where a deregulated economy often becomes ‘the driver for a “parallel economy”’ primarily peddling counterfeits to poor people.

Copyright enforcement and the war on piracy is thus inscribed in a global political economy with roots in colonial and neo-colonial modes of exploitation as well as in a neoliberal shift in economic governance. However, the conflict around piracy and copyright also has significant implications for human rights, both in developed and developing countries. In this context, the Universal Declaration of Human Rights of 1948, exemplifies longstanding tensions in the global political economy of copyright, as it states in Article 24 that:

(1) Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.

(2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

Article 27 thus has two components. On the one hand, it states that everyone has the right to take part in cultural life and freely enjoy arts and scientific knowledge. On the other hand, it also acknowledges every author has the right to protection of material or moral interests associated with her or his scientific or artistic production. While the illegal distribution of culture and information is most commonly an infringement of section two, it could be permissible under section one. This opens a discussion about how to address piracy on a more nuanced level that goes beyond the strict focus on combating piracy and uncritically enforcing existing legislation.

**Regulating Music in the Ghanaian Market? (Christiaan De Beukelaer)**

Piracy, much like poverty, sounds like something that is inherently problematic. It needs to be discouraged, regulated, and finally overcome for legitimate business to flourish. The attempts to crack down on piracy throughout much of Africa are based on this simplistic reasoning. In our paper (see details below) we challenge the dualistic approach of this reasoning from a political economy perspective. We highlight how attempts to eradicate pirate practices do not necessarily result in legal distribution of music and other digital ‘products’. Most importantly, we insist that the piracy versus copyright debate would benefit from greater engagement with the implications of the paradox in Article 27. This would require a recontextualization of copyright, from seeing the protection IPR as solely an economic trade issue, to acknowledging that intellectual property is also about cultural development and human rights.

Given the tension between copyright and human rights, GHAMRO’s intervention in ‘cleaning up’ piracy is not a neutral or merely technical exercise. It is rather a deeply political act that favours the rights owners over audiences, and remuneration over participation. We argue that a postcolonial engagement with the tension within Article 27 is needed to resolve this in an equitable manner. This necessity emanates from the colonial legacy of copyright agreements and legislation, the overlapping praxis of piracy and legitimate business, and the need to respect cultural rights as important parts of human rights instruments. Shifting from the informal to the formal, and from the illegal to the legal, is indeed important for the future development of creative economies in Ghana and beyond, but it will not be achieved through an escalated war on piracy and stricter copyright enforcement, which is likely to be detrimental to human rights and cultural development without contributing significantly to the local economy.

Read more in the article ‘The political economy of intellectual property rights: the paradox of Article 27 exemplified in Ghana’ which will be part of a special issue on economic fraud in Africa, but is now available online.

Christiaan De Beukelaer is a lecturer in cultural policy at the University of Melbourne School of Culture and Communication.

Martin Fredriksson is an associate professor and Marie Curie Fellow at the Department of Culture and Media at Linköping University. He has published extensively on the history and politics of Intellectual Property Rights, and the social meaning of piracy.

Plundering and Profits: Moving Beyond Dependency Theory

ROAPE

August 31, 2018

In a major critique of dependency theory, Esteban Mora continues the debate on the nature of imperialism on roape.net (and specifically the blogpost by Walter Daum). He argues that while inequalities and unevenness in the world market exists, with both strong nation-states and weaker ones, this is not a division based on countries or regions, nor geography or ethnicity, but on relations of production. We must unearth the mechanisms of mutual profiting across all regions to see a class divided world market, as part of an international system of states where every single state is an agent of financial capital. We urge our readers to follow the debate here.

By Esteban Mora

In the on-going debate on imperialism on roape.net, Walter Daum distorts arguments that I have made in a response to this debate. In this blogpost I am going to try to expand on the subject, and at the same time, answer Daum’s critique. First off, I did not deny in the original blogpost that there is a draining from South to North, nor that there is any draining at all between strong and weak countries. I said my view was complementary. Why complementary? Because in the possible inversion between East Asia and Triad countries, we should not expect the inversion of draining, but a mutual profiting with a relatively new positioning between strong and weak countries in the world market. So, if we understand the market only by such terms and processes of ‘draining’ where one is a strong ‘draining state’, and the other a weak dependent state, how are we going to understand this inversion of roles between countries who are both strong or becoming so, and who also drain others (and even each other, such as the automobile industry, where East Asia and the Triad both share production sites and markets with each other)? In addition, how do we avoid making the mistake of thinking the Triad is going to become a Third World dependent-republic, as a radical inversion of roles between North-South? Instead, could it be concluded that there are more universal and global mechanisms which permit a smoother transition from one position to the other, and which do not imply a simple reversal of the Triad’s hegemony, due to the fact that it now shares much of its characteristics with East Asia?

Now, to the three strategies discussed by Daum:

1) There is no mention of a hegemon in any theory of imperialism by Lenin or Bukharin or anybody, nor of any ‘three worlds theory.’ Obviously, I do not reject inequalities and unevenness in the world market, nor that there are big, strong nation-states and weaker nation-states (metropolitan and peripheral, if you want), but this is not based on countries or regions, nor geography or ethnicity, but on relations of production. This implies ‘sharing’ not only mechanisms of draining, but also mechanisms of mutual profiting which forces us to go beyond chauvinism, nationalism, and regionalism, and see the world market as class divided, between an international bourgeoise and international proletariat; as an international system of states where every single state is an agent of financial capital. Or as Lenin wrote: ‘Relations of this kind have always existed between big and little states, but in the epoch of capitalist imperialism they become a general system, they form part of the sum total of “divide the world” relations and become links in the chain of operations of world finance capital’ (Lenin, Imperialism, Highest Stage, Chapter Six).

2) By ‘relative’ I do not mean the ‘rate’ only, I mean the fact that two absolute amounts of profit can be the same (as in China and the US, as I cited), or can even be bigger than the other (as in the examples Daum uses from the same report), and this does not imply the same purchasing power, the same exchange rate, nor the same control over the means of production; essentially the same amount of mass of profits in the US is not worth nor functions in the same way in East Asia, nor do the absolute amounts of profit equal the same purchasing power or relationship with constant capital, since raw materials can be cheaper, jobs low-priced, and capital goods as well, etc. So, Daum can find in East Asia a smaller mass of profit than the Triad, but this is not a measure of the rate of profit, nor a measure of the relationships between this mass and purchasing power, raw materials, capital goods, etc. It is not only a matter of the relationship with constant capital, but appropriation of value. In other words, there could be a bigger appropriation of value in Marxist terms, where there is a smaller mass of profit (the only way profit numbers between West and East can be equivalent with each other, is if any other factor of production involved – constant capital specially – is also equivalent according to the exchange rate between the two monetary systems, commonly dollars and any other currency. This is highly unlikely and forces us to be cautious on the use of absolute quantities as markers of profit or value, as Smith and Daum argue. This notion helps us to understand the working of value across different exchange rates, currencies and the world market, etc. (There is a short explanation of this process here).

Using two amounts of profits plain and simple, and looking for the biggest one as a mark of profit rates or purchasing power or the relationship with constant capital, etc, is not even Ricardian economics. All the defenders of the orthodox view on economics simply show data where profits are bigger, as if the whole discussion was the matter of a single amount or a single quantity or magnitude deciding everything, when it’s a matter of a relationship.

3) I do not mean South and North countries are equivalently profitable, nor that there are no differences between small and big countries. Rather I argue that besides these differences in ‘draining’ which permit large countries to exploit small countries, there is a mechanism (a ‘neo-colonial’ and also ‘dependency-like’ mechanism) which allows for the maintenance of the international imperialist system, not a radical break or absolute heterogeneity between ‘draining and drained countries’ that both Smith expects, and Harvey claims is already occurring.

I also said something else that Daum ignores: why do high-tech industries, industrial production, gross capital formation and capital goods exports all now come from East Asia and not the Triad? For this reason, we must move beyond a number or figure and ask about the relationships at the level of the world market. Are we going to reduce the whole imperialist debate to who has higher profits, and do this without understanding profits relatively but as an absolute mass?

Industrial production, gross capital formation and capital goods exports were characteristics of the Triad when they were called imperialists. All twentieth century Marxism is based on this assumption. What are we to say about franchises and all sorts of export of capitals which occur right now thanks to the internationalization of the division of labour and the multinationalization of capitals? Even countries like Costa Rica, in Central America, has started to ‘drain’ other countries through franchises, and Guatemala already has its own multinational.

Multinationals from the South have all been developing rapidly in the last 20 years, which ‘drain’ Triad countries. Is Costa Rica ‘imperialist’ because it drains flows of money from South America and the rest of Central America? What are we going to do with these phenomena? Do we instead need to understand every nation-state as part of imperialism, whether metropolitan or peripheral, or are we going have to keep dividing up regions (like Three Worlds Theory) and insist on outdated notions? Also what has happened to the ‘industrial countries’ and ‘agricultural countries’ divide that was so important for Bukharin and Lenin, yet which does not exist anymore? Are we going to cling to the past, or look into the rich and real phenomena occurring in the world market in front of our eyes?

This is where I once again insist that instead of looking for a radical inversion of the world market where superpowers become dependent countries and vice versa, like some spectacle in science fiction, we have to start to analyze more complex processes beyond dividing the world into imperialists and non-imperialists, or into region 1 and region 2, even when they are clearly bigger than the others – this is exactly what takes place in distorted universe of Three World Theory-dependency theory, and other theories which share this outlook.

Draining is more complex, to the point that it is not only the Triad which is responsible for it. Since, if ‘draining’ is the only characteristic that makes a country imperialist, then you have a methodological problem of enormous dimensions with every country from the Caribbean to the Pacific enjoying inflows of value (‘draining’, in a word). Rather there seems to be an uneven development in the market, but also a synchronicity – maybe like the one asserted by Wallerstein, which goes beyond nations and regions, while at the same time making some bigger than others. Plundering does not always involve an absolute deterioration for the smaller partner, rather a relative plundering and mutual profiting moving in multiple directions. Is this so hard to come to terms with in the actual workings of the modern world market? In this important debate on imperialism on roape.net, this is what I propose.

Esteban Mora is a researcher in Communications Science at the Universidad de Costa Rica, he has written three books on capitalism and Marxism, and writes a Marxist economics blog. He has recently reviewed The History of Business in Africa by Grietjie Verhoef. Verhoef makes an important historical argument about the role and agency of African capitalists from the early colonial period. Mora argues that Verhoef forces us to rethink more orthodox accounts of the development of capitalism in Africa.

Featured Photograph: Views of Vilnius, Lithuania in 2017

Transition – an iconic, incendiary African magazine

ROAPE

August 28, 2018

By David Seddon

In a recent issue of the London Review of Books, Mahmood Mamdani wrote what I believe to be a highly controversial essay on ‘The African University’, in which he compared and contrasted the universities of Makerere in Kampala, Uganda and the University of Dar es Salaam in Dar es Salaam, Tanzania, claiming that they represented two different paradigms for African universities, epitomised by Ali Mazrui and Walter Rodney, that he refers to as exemplifying ‘the mode of reasoning’ and the ‘ideological orientation’ respectively.

I do not intend to provide a critique of his piece here. Rather, I want to draw the attention of readers of roape.net to the magazine or journal called Transition, to which Mamdani refers in the course of his piece. I recently wrote on this website about the Journal of African Marxists, which had it hey-day in the 1980s.

Then…

Transition was founded in Kampala in the early 1960s, on the eve of independence by a young writer, Rajat Neogy, a Ugandan of Bengali origin. Neogy declared that ‘… the ultimate purpose of a literary magazine will always be to herald change, to forecast what new turn its culture and the society it represents is about to take. It will do this by sometimes allowing prejudice and temporary obsessions to be aired [and] by being permissive to radical innovations.’ From the very start, Transition commissioned and published work by political activists and major political figures as well as by intellectuals and writers.

In the second issue, for example, Julius Nyerere published a defence of the one-party system that would soon exasperate many of the magazine’s contributors and readers. The following year, Nyerere became president of Tanganyika, and went on to outlaw all but his own political party. Tom Mboya, the Kenyan trade unionist, published a piece on the press and governments in Africa, shortly before Jomo Kenyatta appointed him Minister of Justice. Another piece by Mboya, on ‘African socialism’, appeared a few issues later. Kenneth Kaunda, published on the future of democracy in Africa at roughly the time he became the first president of Zambia.

By the mid-1960s, Transition enjoyed considerable attention, and indeed prestige, both for the eminence of its contributors and for the quality of the contributions. Transition was never afraid to offend and frequently invited controversy with articles about literary and racial politics, sex, stereotypes, and the regimes in power, while at the same time always making space in its own pages for robust retaliation. As Mamdani remarks, ‘by the mid-1960s, Transition was the locus of an ever-widening regional conversation, from Achebe on “English and the African Writer”, through Terence Ranger on Roger Casement, to Paul Theroux on Tarzan, a send-up of expatriate attitudes and an early example of cultural studies in Africa.’ James Baldwin also contributed, as did Ali Mazrui.

Shortly after Kwame Nkrumah was deposed in Ghana in 1966, Mazrui published a critical piece on ‘Nkrumah: The Leninist Czar’, which he followed up with a piece entitled ‘Tanzaphilia’ – a withering critique of the regional and international left’s infatuation with one-party rule in Tanzania (as Tanganyika became in 1964). Both essays were ‘incendiary’, and, according to Mamdani, sharpened the differences between Mazrui and the left at the University of Dar es Salaam.

However, if he identifies Mazrui as ‘the most important liberal critic of the new African nationalism in power’, Mamdani also recognizes Issa Shivji as ‘its most important critic from the left’, and specifically mentions Shivji’s two books, The Silent Class Struggle (1970) and Class Struggles in Tanzania (1976) that identified Tanzania’s ‘African socialism’ as a disguised form of capital accumulation by a new state-based class.

In 1968, the Ugandan government jailed Neogy for sedition, despite international outcry; the magazine had criticized President Milton Obote’s proposed constitutional reforms. After Neogy’s release, Transition was revived in Ghana in 1971 and the Nigerian novelist Wole Soyinka took over in 1973. During Soyinka’s tenure, Transition became still more contentious: the cover of one issue sported a cartoon image of Ugandan dictator Idi Amin, with ‘Karasi!’ (Finish Him!) splayed across his face. Transition was unlike anything else, in Africa or abroad, and when it folded in 1976 for financial reasons it left a void.

… And Now

In 1991, Henry Louis Gates, Jr., a student of Soyinka’s at Cambridge University and a frequent contributor to the Ghanaian Transition, brought the magazine back to life. In the subsequent decade, Transition would refashion itself as an international magazine about race and culture, with an emphasis on the African diaspora. Today, Transition is sub-titled ‘the magazine of Africa and the diaspora’, is hosted by the Hutchins Center for African and African-American Research at Harvard University and is published three times annually by Indiana University Press. It is also on Twitter at @Transition_Mag.

Its home page states that: ‘since its founding in Uganda in 1961, the magazine has kept apace of the rapid transformation of the African Diaspora and has remained a leading forum of intellectual debate. Now, in an age that demands ceaseless improvisation, we aim to be both an anchor of deep reflection on black life and a map charting new routes through the globalized world.’ Its editorial ‘mission statement’ notes that ‘accelerating revolutions in telecommunication, digital conversion, economic speculation, and social dislocation are rapidly transforming the conditions and activities of Africans and African-Americans. The new forms and tempo of change compel deep reflection and novel approaches to the representation of black life’.

Accordingly, ‘to the magazine’s traditional focus on the condition of Africa, race, and cultural identification, we add an emphasis on creativity and innovation in social, economic, cultural, and political life. In full recognition of the porous membranes of black belonging, we will pay special attention to the ever-fluctuating social geography of the black world, surveying developments throughout the Americas, Europe, and Africa, while glancing at times across the Pacific and Indian Oceans. We will attempt, in other words, to make Transition a pivotal medium for discussion of the global predicament of the African Diaspora in an age that demands ceaseless improvisation.’

It states that it will ‘continue to feature fiction, creative non-fiction, narrative journalism, art and cultural criticism, political commentary, interviews with important figures and thinkers, book and film reviews, and poetry. As always, Transition aims to engage a broad swath of the educated public with clarity, insight, and dynamism …In our American incarnation, the magazine has won a wide array of awards for design, international reporting, and general excellence; our essays and interviews have been reprinted around the globe.’

Lessons?

The first important lesson to be taken from the history of Transition, to my mind, is that it started life as an African initiative, rooted in the immediate concerns – political, economic, cultural – of the African intelligentsia and of African political activists (even if it included contributions by non-Africans), what marked its early days was its vigour and drive, and above all its relevance in the 1960s and 1970s, which from this essential fact. Once transplanted elsewhere, and driven by very different concerns (despite the mission statement of its reincarnation), it inevitably lost that sense of rootedness.

That is not to accept that it was merely a child of the times, of the process of ‘de-colonisation’ and that a similar initiative could not flourish in modern times, in the era of ‘globalization’ (the distinction made by the editors of the new Transition). I believe that an African journal, whether in print or on-line (or both), rooted in African concerns and with an editorial board at least in large part based in Africa could be successful today, if able to resolve both the question of funding that led to the demise of the original Transition and also the problem of communication and logistics.

As regards the latter, in principle it should be easier today than it was in the 1960s and 1970s when there was no email or internet and no Skype, Whatsapp or FaceTime, and when the real cost of international travel and international postage is lower than it was then. As regards the former, more difficult issue, the Journal of African Marxists resolved that issue partly by having a sympathetic publisher in the UK.

The Review of African Political Economy – which also started out as an independent financial concern – now has a commercial publisher in the UK; and many other journals concerned with African Studies have commercial publishers in the UK, the USA or elsewhere. The strength of this (which is why ROAPE changed its business model) is that a commercial publisher generally ensures a more reliable financial base for such a journal. The main problem with this model, however, is that what makes for successful journalism and intellectual debate in the minds of the editors, the contributors and the readers may not always prove commercially viable, and vice versa.

Another important lesson, in my view, is that the original Transition was able to be wide-ranging in its coverage (even if limited by its English language medium) and draw in contributions from many different sections of the intelligentsia (i.e. not just academics) and from different cultural traditions, even if it was mainly based on contributions from English-speaking countries. This gave it a multi-disciplinary and to some extent a multi-cultural flavour. The risk here is that the ‘focus’ may get lost in favour of ‘scope’, and ‘edge’ or controversy in favour of ‘surface’ and acceptability.

The final lesson one might learn from the experience of Transition is that the journal was successful as a medium for debate and controversy, precisely because it was run by and written by ‘amateurs’ – people who loved and were passionate about what they thought, what they said and what they read, and linked this passion not only to a concern to understand the world but also to change it. Today, there is a tendency for journals to be edited, written for and read by ‘professionals’, often academics, whose may also be passionately involved but who, after all are ‘in it’ for their own careers and professional advancement perhaps as much as they are to change the world, if they are interested in that project at all.

David Seddon is a researcher and political activist who has written extensively on social movements, class struggles and political transitions across the developing world. He studied ‘food riots’ and protest in a ground-breaking study on North Africa and the Middle East Free Markets and Food Riots: the politics of global adjustment with his co-editor John Walton.

Featured Photograph: Founding editor of Tansition, Rajat Neogy, on the cover of the magazine after his death in December 1995.

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Understanding Steve Biko: Race, Class and Struggle in South Africa

Free Access to Special Issue on Radical Political Economy

The Limitations of Truth Commissions: Lessons from Kenya

Ghana’s War on Piracy: Copyright and Human Rights in Africa

Plundering and Profits: Moving Beyond Dependency Theory

Transition – an iconic, incendiary African magazine

Decarbonization reproduces colonial inequalities

Oligarchy and the subversion of democracy – warnings from South Africa

The Day Rhodes Fell: Ten Years After

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