The CFA Franc: French Monetary Imperialism in Africa

May 18, 2017

By Ndongo Samba Sylla

On 11 August 2015, speaking at the celebrations marking the 55th anniversary of the independence of Chad, President Idriss Deby declared, ‘we must have the courage to say there is a cord preventing development in Africa that must be severed.’ The ‘cord’ he was referring to is now over 71 years old. It is known by the acronym ‘CFA franc’.

The pillars of the CFA franc

Like other colonial empires – the UK, with its sterling zone; or Portugal, with its escudo zone, France had its franc zone. The CFA franc – orginally the French African Colonial franc – was officially created on 26 December 1945 by a decree of General de Gaulle. It is a colonial currency, born of France’s need to foster economic integration among the colonies under its administration, and thus control their resources, economic structures and political systems.

Post-independence the CFA franc was redesignated: for the eight members of the West African Economic and Monetary Union (WAEMU) – Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo – it became the African Financial Community franc; for the six members of the Central African Economic and Monetary Community (CAEMC) – Cameroon, Central African Republic, Republic of the Congo, Gabon, Equatorial Guinea and Chad – the Central African Financial Cooperation franc. The two zones possess economies of equal size (each representing 11% of GDP in sub-Saharan Africa). The two currencies, however, are not inter-convertible.

As established by the monetary accords between African nations and France, the CFA franc has four main pillars:

Firstly, a fixed rate of exchange with the euro (and previously the French franc) set at 1 euro = 655.957 CFA francs. Secondly, a French guarantee of the unlimited convertibility of CFA francs into euros. Thirdly, a centralisation of foreign exchange reserves. Since 2005, the two central banks – the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC) – have been required to deposit 50% of their foreign exchange reserves in a special French Treasury ‘operating account’. Immediately following independence, this figure stood at 100% (and from 1973 to 2005, at 65%).

This arrangement is a quid pro quo for the French ‘guarantee’ of convertibility. The accords stipulate that foreign exchange reserves must exceed money in circulation by a margin of 20%. Before the fall in oil prices, the money supply coverage rate (the ratio of foreign exchange reserves to money in circulation) consistently approached 100%, implying in theory that Africans could dispense with the French ‘guarantee’. The final pillar of the CFA franc, is the principle of free capital transfer within the franc zone.

The CFA franc: for and against

Despite its exceptional longevity, the CFA franc by no means enjoys unanimous support among African economists and intellectuals. Its critics base their analysis on three separate arguments. Firstly, they condemn the absence of monetary sovereignty. France holds a de facto veto on the boards of the two central banks within the CFA franc zone. Since the reform of the BCEAO in 2010, the conduct of monetary policy has been assigned to a monetary policy committee. The French representative is a voting member of this committee, while the president of the WAEMU Commission attends only in an advisory capacity. Given the fixed rate of exchange between the CFA franc and the euro, the monetary and exchange rate policies of the franc zone nations are also dictated by the European Central Bank, whose monetary orthodoxy entails an anti-inflation bias detrimental to growth.

Secondly, they focus on the economic impact of the CFA franc, construed as a neocolonial device that continues to destroy any prospect of economic development in user nations. According to this perspective, the CFA franc is a barrier to industrialisation and structural transformation, serving neither to stimulate trade integration between user nations, nor boost bank lending to their economies. The credit-to-GDP ratio stands around 25% for the WAEMU zone, and 13% for the CAEMC zone, but averages 60%+ for sub-Saharan Africa, and 100%+ for South Africa etc. The CFA franc also encourages massive capital outflows. In brief, membership of the franc zone is synonymous with poverty and under-employment, as evidenced by the fact that 11 of its 15 adherents are classed as Least Developed Countries (LDCs), while the remainder (Côte d’Ivoire, Cameroon, Congo, Gabon) have all experienced real-term economic decline.

Finally, they maintain that membership of the franc zone is inimical to the advance of democracy. To uphold the CFA franc, it is argued, France has never hesitated to jettison heads of state tempted to withdraw from the system. Most were removed from office or killed in favour of more compliant leaders who cling to power come hell or high water, as shown by the CAEMC nations and Togo. Economic development is impossible in such circumstances, as is the creation of a political system that meets the preoccupations of the majority of citizens.

For its partisans, in contrast, the underlying logic of the CFA franc lies not in neocolonialism, but in monetary cooperation. The under-development of the franc zone nations is attributed to factors independent of their monetary and exchange policies, in particular to their political instability and the poor economic policies of their leaders.

The CFA franc is characterised as a credible and stable currency, a significant virtue given the experience of most currency-issuing African nations. This counter-argument is, however, flawed: experience shows that nations like Morocco, Tunisia and Algeria, which post independence withdrew from the franc zone and mint their own currency, are stronger economically than any user of the CFA franc.

It is also claimed that the CFA franc has allowed inflation to be pegged at a rate considerably lower than the African average. For its critics, however, the counterpart of this low inflation rate is weak economic growth and the creation of fewer jobs. Not to mention that this low average inflation rate does not prevent cities like Dakar from ranking among the most ‘expensive’ in the world.

In fact, the terms of the debate are quite simple. The CFA franc is a good currency for those who benefit from it: the major French and overseas corporations, the executives of the zone’s central banks, the elites wishing to repatriate wealth acquired legally or otherwise, heads of state unwilling to upset France etc. But for those hoping to export competitive products, obtain affordable credit, find work, work for the integration of continental trade, or fight for an Africa free from colonial relics, the CFA franc is an anachronism demanding orderly and methodical elimination.

From forbidden topic to emerging social movement

In October 2016, a group of African and European economists published a book entitled [in translation] Liberate Africa from Monetary Slavery: Who Profits from the CFA Franc? The date was not selected at random; it coincided with a meeting of the franc zone’s finance ministers, central bank governors and regional institutions. In the wake of the public debate sparked by the book, people are beginning to speak out.

France maintains the position that the CFA franc is an ‘African currency’, existing only as a support to Africans, who retain their ‘sovereignty’. Some heads of state, like Alassane Ouattara in Côte d’Ivoire et Macky Sall in Senegal take the same line. Unlike Idriss Déby, Macky Sall describes the CFA franc as ‘a currency worth keeping’. Ouattara goes further, insisting that the currency is a matter for experts and thus not a subject for democratic debate. From this standpoint, any critic of the CFA franc must by definition know nothing about it.

Yet, alongside radical economists and intellectuals, the critics of the CFA franc also include former international officials like Togo’s Kako Nubukpo (ex-BCEAO), Senegal’s Sanou Mbaye (ex-African Development Bank, and Guinea-Bissau’s Carlos Lopez (ex-UN Economic Commission for Africa), as well as African bankers like Henri-Claude Oyima (President-Director General of BGFI Bank).

From a taboo subject raised only by a handful of African intellectuals and politicians, the CFA franc debate is starting to enter day-to-day conversation and to attract the attention of activists. A social movement is developing to demand the joint withdrawal of African nations from the CFA franc. On 7 January 2017, on the initiative of ‘SOS Pan-Africa’ (‘Urgences Panafricanistes’), an NGO set up and run by the activist Kemi Séba, anti-CFA demonstrations were organised in several African and European cities, and in Haïti. The mobilisations varied in size according to country, bringing together intellectuals, pan-Africanist and anti-globalisation activists and others. SOS Pan-Africa has since issued a symbolic appeal for Africans to boycott French products.

The current alternative to the CFA franc in West Africa is the joint currency planned for members of the Economic Community of West African States (ECOWAS). The new currency was due to enter circulation in 2015, but this has since been deferred until 2020. The new deadline may or may not be met, but one thing seems increasingly clear: the CFA franc no longer has a future.

Ndongo Samba Sylla is Research and Programme Manager for the Rosa Luxemburg Foundation. He is the editor and author of a number of books including The Fair Trade Scandal.

Featured Photograph: Front Anti-CFA organise protests against the currency

The Struggle for the Congo

ROAPE

May 15, 2017

Jointly published by Jacobin and ROAPE, David Seddon writes about Joseph Kabila’s second term as president which was supposed to end last November, but he’s still clinging to power, despite massive resistance.

By David Seddon

In 1997, Laurent Kabila successfully led a rebellion against President Mobutu Sese Soko and named himself president of the vast country then called Zaire. In 2001, when Kabila was assassinated, his son Joseph came to power. He has dominated what is now officially named the Democratic Republic of Congo (DRC) for the past fifteen years, but has never established effective control, let alone presided over significant economic and social development.

Virtually limitless water from the world’s second-largest river, a moderate climate, and rich soil grant the DRC excellent agricultural potential. Abundant deposits of copper, gold, diamonds, cobalt, uranium, coltan, and oil should make it one of the world’s richest countries. But annual per capita GDP is only about $450, and income per capita sits below $1 a day. Furthermore, Kabila’s rule has been marked by almost continual conflict, especially in the eastern region, which MONUSCO, a small UN peacekeeping force first deployed in 1999, has failed to contain. Millions have died, either as a direct result of conflict or as a consequence of the disruptions to normal life and basic services.

Rival militias, often supported by neighboring African states, local groups unwilling to accept Kabila’s legitimacy, and intertribal struggles over land have all contributed to the chaos. Private mining corporations from around the world have taken advantage of this state of affairs and exploited the DRC’s rich mineral deposits. Protected by private security companies and mercenaries, these multinationals effectively exist beyond the reach of government regulation or taxation.

For the past two years, the political opposition has struggled against Kabila, worried that he will try to extend his term by any means necessary.

Kabila, who succeeded his father less than two weeks after the latter was assassinated, has won two questionable presidential elections. In 2006, the results were disputed; five years later, the main opposition boycotted the vote. While it’s clear he could manipulate the elections and win again, Congo’s constitution bars Kabila from seeking a third term. He’s had to devise new strategies to hold on to power.

In January 2015, the opposition began organizing protests against a draft law they feared would allow Kabila to remain in power beyond his current mandate. The proposed legislation called for a new census to revise the voting rolls, as approximately seven million new citizens between the ages of eighteen and twenty-two needed to be registered. The opposition saw this as Kabila’s attempt to postpone the elections and allow him to run for a third term.

The census provision was eventually removed from the legislation, but the opposition argued it was only ever one of numerous methods available to delay the elections. The most effective method, some say, has been to compromise the Independent National Electoral Commission (CENI).

Lambert Mende, the communications minister, denied that the government could block the electoral process, reiterating that CENI, not the government, organizes elections. But the opposition claims elections commission is independent in name only. According to Jason Stearns, the director of the Congo Research Group at New York University, these accusations are justified: “the political influence on the electoral commission has been clear,” he explains. “While, in theory, the political opposition can nominate members to the body, almost none of those are still recognised by the opposition.”

On October 9, 2015, Kris Berwouts commented that “President Kabila faces challenges on a number of fronts, from the opposition to the grassroots to members of his own inner circle” and asked, “How much longer can he hold on?” While we still can’t answer that question, there have been significant developments in the DRC since Berwouts posed it.

Citizen Front

In November and December 2015, various opposition forces united to form Citizen Front 2016 — a coalition of political parties and civil society organizations all demanding elections. At its formal launch, the front gave the government an ultimatum: it must “unblock the electoral process” before the end of January 2016 and allow CENI to publish an electoral calendar. Should Kabila fail to meet this fast-approaching deadline, the coalition promised to launch a program of nonviolent resistance. The BBC reported in December 2015 that “activists believe violence would escalate if the election deadline is missed.”

The date set was clearly optimistic, and few seriously expected a meaningful organization of elections to get underway before February. Even the Citizen Front leaders doubted that much would change.

“The government won’t unblock the electoral process,” said Martin Fayulu. He thought Kabila might nominate “a weak successor” if he encounters a strong and united opposition, but believed that the president’s “first choice is to violate the constitution and carry on as president without elections.” Albert Moleka suggested that “Kabila’s logic is that it’s him or chaos and civil war.” According to Vital Kamerhe, an opposition heavyweight who came in third in the 2011 presidential race, “Elections will not be held because of lack of political will. If President Kabila could run, then elections would take place.”

Despite this pessimism, Citizen Front managed to achieve significant momentum. At the beginning of January 2016, Moïse Katumbi, former governor of Katanga and Kabila’s old ally, announced that he had joined the front. He explained, “The purpose of the Citizen Front is first to insist on the provincial elections of 2016 and the 2016 presidential election by respecting the constitutional deadlines and have the electoral calendar, as soon as possible.”

The front planned numerous “conferences” followed by church services at an estimated forty-four locations across the capital city of Kinshasa. The events were scheduled to commemorate the killing of some forty or so opposition demonstrators by security forces in January 2015. Some conferences went ahead on the anniversary of the protests (January 19) while others were blocked.

Many of the organizers and activists associated with these events were arrested — some sources put the number at around forty; others at above one hundred. According to Al Jazeera:

“Early in the morning, the government sent soldiers and policemen to the site allotted to me and my party where they blocked our access and arrested five of my activists,” said Martin Fayulu, a leading figure within the Citizen Front. “They told the priest to stop the mass, not only here but at all the other sites too.” Albert Moleka — a founding member of the Citizen Front and a veteran of Congolese politics — was supposed to attend the conference in Ngiri Ngiri, but says: “The regime wants no opposition demonstrations in Kinshasa at all.”

Both Moleka and Kamerhe claimed that “machete-wielding thugs loyal to President Kabila” harangued and intimidated opposition activists. While MONUSCO has not gathered any evidence to substantiate these allegations, Jose Maria Aranaz, director of the UN’s Joint Human Rights Office, told Al Jazeera that “there was a concerted effort by the police and the ANR [the intelligence agency] to impede the opposition’s demonstrations from taking place”.

Pierrot Mwanamputu, spokesperson for the Congolese National Police, however, justified the crackdown, claiming that organizers had published leaflets of “a seditious character calling on the population to rebel against the government” and had not secured proper authorization — something opposition leaders insist was not required.

Growing Discontent

In mid-January 2016, CENI prepared and distributed an electoral timetable to embassies in Kinshasa, showing that the commission expected it would take between thirteen and sixteen months just to update the DRC’s electoral roll. In February 2016, Carol Jean Gallo, writing from Bukavu in eastern Congo, suggested that although elections were months away, there were already “signs that this volatile and conflict prone country may be headed toward a deep political crisis.”

She reported:

Here in Bukavu, South Kivu, in DRC, murmurs of discontent can be heard with regard to upcoming DRC elections. People understand that the DRC, like other countries in the region, are being watched — and international support depends in large part on respecting constitutional mandates. But opposition parties and activists in DRC think that Kabila is trying to be more clever and surreptitious about staying in power by coming up with ways of delaying the elections scheduled for November — a strategy known as glissement (“slippage” in French).

At this point, CENI had not even started to revise the voting register, causing delays in the local and provincial elections that had been scheduled for October 2015. According to Gallo:

[T]he two main glissement strategies people have been talking . . . are the claim that the government does not have enough money or resources to hold elections in November and the government’s assertion that the DRC must complete a “national dialogue” before elections are held. Kabila called for such a dialogue about three months ago, and CENI estimates it will cost over $1 billion.

Government officials denied that the president was trying to remain in power. They argued that major logistical shortcomings needed to be overcome and a “secure environment” established across the nation before the elections could be held. “This may take up to four years,” they warned.

They had a point. The DRC is nearly two-thirds the size of Western Europe and has a population of more than seventy-nine million. Registering new voters has always been a problem, and, given DRC’s rate of population growth — about 2.7 percent annually — it is likely that the current registry seriously underestimates eligible voters.

Meanwhile, Western nations, including the United States, continued to warn the president to stick to the election calendar, and diplomats from the African Union to the UN expressed concern about postponing the November elections.

On March 10, 2016, the European Parliament, in an emergency plenary session, called on the DRC government and Kabila to respect the nation’s laws. It noted that the Congolese constitution clearly gave the president the right to run for only two consecutive terms, commenting that “if President Joseph Kabila, who was elected in 2006 and re-elected in 2011, deeply respects the constitution, he cannot be a candidate to be his own successor.”

It also called on the African Union to act as a mediator in the interests of regional stability and on the United Nations to extend MONUSCO’s mandate to provide civil protection during the elections. It further resolved that the European Union should “commit to use all instruments at its disposal, be they political, diplomatic or economic, to lobby for the respect of the Constitution and the protection of local populations.” It stated that it would favor a comprehensive political dialogue but indicated that targeted sanctions remained on the table. The European politicians demanded an end to arbitrary arrests and intimidation and prosecution for human rights violations.

However, Gallo explained that, according to DRC citizens, even this resolution doesn’t go far enough:

[O]rdinary people — bartenders, taxi drivers, and even ex-rebels — have told me in no uncertain terms that, whether knowingly or inadvertently, these international actors are simply buying into Kabila’s shenanigans and that a comprehensive dialogue will only result in a delay in the elections, which will cause those fed up with the status quo to react with political violence.

Dealing with the Opposition

At the beginning of May 2016, the Constitutional Court ruled, in an idiosyncratic interpretation of Article 70 of the constitution, that Kabila could stay in power until voters choose a new president. Shortly afterwards, protesters took to the streets, clashing with police. The opposition feared that its predictions were coming true: the elections would be postponed, and the president would remain in office.

At least one protester died and two more were wounded by gunfire during running battles in Goma, the largest city in the east. Security forces in Kinshasa fired tear gas at a march consisting of several thousand citizens. Unverified reports began circulating that protesters had stoned a police officer to death. At least fifty-nine people were arrested. Local authorities banned demonstrations in some cities.

A particularly heavy deployment of riot police appeared on the streets of the southern mining hub Lubumbashi, where supporters of Katumbi — who had emerged as a real threat to Kabila — repeatedly clashed with police.

On May 13, 2016, the attorney general issued an arrest warrant for Katumbi, claiming he “threaten[ed] the internal and external security of the country by recruiting mercenaries to support his cause.” Police once again used tear gas to disperse protesters who had gathered outside the courtroom to support him. Katumbi fled the next day, ostensibly to receive medical treatment in South Africa for injuries sustained during a demonstration earlier that month.

His supporters in the Citizen Front continued to defy a ban on protests in North Kivu and Lubumbashi, and opposition parties and civil society groups called for nationwide demonstrations to protest the Constitutional Court’s ruling.

In late July, tens of thousands gathered in Kinshasa to greet Étienne Tshisekedi, the veteran leader of the Union for Democracy and Social Progress (UDPS) who had spent the previous two years in exile. Tshisekedi’s supporters accompanied him to the party’s headquarters in the Limete municipality of Kinshasa. That same day, two people were injured and seven others arrested as police violently dispersed opposition gatherings in Lubumbashi and Tshikapa (Kasai District).

Both pro- and anti-government groups planned protests in major urban areas at the end of July and into August. The ruling coalition scheduled a large demonstration to support the president and his proposed national dialogue on the electoral process for July 29 at the Stade Tata Raphael in Kinshasa.

The Rally of Forces for Change planned large opposition actions for two days later at the Stade des Martyrs in Kinshasa, where Tshisekedi would speak, and at the Grande Place Tshombe in Lubumbashi. They also organized a large meeting on August 7 at the Esplanade du Palais du Peuple in Kinshasa. Protesters insisted that the presidential elections take place in November.

Many feared escalating violence. Amnesty International’s Regional Director for East Africa, the Horn and the Great Lakes, Muthoni Wanyeki, demanded that:

The authorities . . . facilitate the right to peaceful assembly for all, including opposition supporters protesting election delays that they regard as a tactic to prolong President Joseph Kabila’s stay in power. Police and other security forces must refrain from using force against peaceful protesters.

Tobias Ellwood, the United Kingdom’s minister for the Middle East and Africa visited the DRC in early August and pressed the government to make progress toward timely elections. He also met with opposition figures and emphasized the importance of elections to the DRC’s continuing development. The Foreign Office advice website now warns British travelers that “the political situation in DRC . . . remains uncertain.”

The Crunch

On August 20, 2016, CENI announced that the presidential election would be delayed until at least July 2017. The commission’s president, Cornielle Nangaa, explained that the process of registering more than thirty million voters would take an estimated sixteen months to complete. “The issue before us today in Congo is how to reconcile the electoral cycle . . . with the technical constraints we face,” he added, referring to the logistical challenge of updating voter rolls in a large country with poor infrastructure and communications.

The government then decided that it preferred to hold local and provincial elections before the presidential campaign, suggesting that Congolese voters would have to wait until 2018 or 2019 to choose a new leader. Many anticipated this outcome, but it nevertheless fuelled further protests.

The main opposition alliance rejected further dialogue and called on its supporters to hold a general strike, creating a ‘dead city’ (ville morte) on Tuesday August 23. Tshisekedi declared that the government had not met the “necessary requirements for holding a dialogue” and lent his support to the strike. Katumbi, still in exile, urged people to stay at home in protest of what he termed a “constitutional breach” and a “false and non-inclusive dialogue in the country.”

The opposition chose August 23 because African Union mediator and former prime minister of Togo, Edem Kodjo, had planned to open talks with all domestic political parties that day. Opposition politicans had criticized Kodjo in the past, portraying him as a Kabila apologist, and called for his resignation. Fayulu, leader of the new Citizenship and Development Party, which had evolved out of the Citizen Front, vocally disapproved of the mediator and asked him to step down: “[W]e want to demonstrate to Mr Kabila that the people of Congo don’t want . . . Mr Kodjo. We want the talks to take place in accordance with UN Resolution 2277,” which calls for dialogue in accordance with the constitution. “We are saying that Mr Kodjo is becoming a bottleneck and has to go,” he finished.

The strike proved to have less impact than anticipated. It had the greatest effect in Kinshasa and slowed business activities in Goma, the east’s main trading center, but the opposition in Lubumbashi found the results disappointing. A government spokesman dismissed the strike as the work of “some radicals . . . having some old-fashioned fun,” and the opposition vowed to hold large scale actions across the country before September 19 — the date when the president was constitutionally required to call for elections to choose his successor.

On the day of the deadline, thousands of Congolese marched against President Kabila. Interior Minister Evariste Boshab reported that only seventeen people, including three policemen, had died in clashes. But, significantly, he also referred to the protests as “an uprising.”

Other sources printed much higher casualty figures, and close to two hundred people are believed to have been arrested. Human Rights Watch reported that security forces had killed fifty-six people.

Robert Coville, spokesman for the UN High Commissioner for Human Rights, held a news briefing in Geneva the same day, saying that the UN was “deeply worried” by the latest round of violence.

We have received reports of excessive use of force by some elements of the security forces as well as reports that some demonstrators resorted to violence yesterday. We call on all sides to show restraint and we urge the authorities to ensure that existing national and international standards on the appropriate use of force are fully respected by all security personnel. We call for a credible and impartial investigation to bring those responsible of human rights violations and criminal acts to justice, and we stand ready to support such an inquiry.

He added that the violence underlined the urgent need for dialogue on the nation’s electoral process.

Despite strong internal and external pressure, the deadline passed with no announcement. All signs now indicated that Kabila intended to cling to power until 2018 or even 2019. Between the Constitutional Court decision allowing him to remain president until elections are held, the ongoing revision of the national voter registry, and the government’s decision to hold local and provincial elections first, Kabila seemed to have effectively extended his term by two or three years.

One Step Forward, Two Steps Back

The government did agree to talks with the smaller opposition parties; these produced a provisional agreement in October 2016. The deal announced that Kabila would remain in power until presidential elections, now scheduled for 2018. Following the vote, he would step down.

The main opposition coalition objected strenuously to this agreement, claiming it had been excluded from the talks, and called for another general strike. The so-called dialogue continued without these major players, and pressure on Kabila grew after an opinion poll revealed that he had approval ratings under 8 percent and that the majority of Congolese voters preferred either Tshisekedi or Katumbi for president.

In November 2016, Kabila nominated Samy Badibanga, leader of the main opposition bloc in Parliament, to replace Augustin Matata as prime minister. This decision signified a major development. Mounting popular resistance, poor polling, and international pressure pushed Kabila to sign a “global and inclusive agreement,” brokered by the Congolese Catholic Church, on December 31, 2016.

The agreement called on the Kabila administration and the opposition parties to create a transitional government that would take control in March 2017. Elections would take place before the end of the year, and Kabila would not run for reelection.

While Tshisekedi’s poor health precluded him from participating in the talks, his symbolic importance was underlined when he was appointed as the president of the critical transitional council — the National Council for the Monitoring of the Agreement and the Electoral Process (CNSA).

Kabila himself promised that elections “would be organised in the coming months” but warned against foreign “interference,” apparently referring to remarks by some UN Security Council diplomats who had visited the DRC to push for a peaceful transition of power.

Negotiations over the agreement’s implementation — which were supposed to be completed by the end of January — stalled over several issues, including the procedure for appointing a new prime minister and the division of ministerial positions. The lack of progress, combined with deepening economic malaise and insecurity in several provinces, increased citizens’ frustration.

Meanwhile Tshisekedi’s health declined further, and he died, at the age of 84, on February 1. His death came at a critical moment. He was set to lead the transitional council and, with negotiations faltering, had left no obvious successor.

His party, the UDPS, had played a major role in the opposition coalition. Party leadership suggested that Tshisekedi’s son Felix be named prime minister in the power-sharing government. But Jason Stearns, director of the Congo Research Group at the Center on International Cooperation at New York University, explained:

There is no heir apparent, either within [his UPDS party] or the broader opposition. Even before his death, opposition leaders were vying for the prime ministry and cabinet jobs; there is little doubt that President Kabila will seek to capitalise on this moment to sow discord among his rivals. At the same time, the political elite and the broad population are still relatively united on their objectives: Kabila must step down and elections must be held as soon as possible. The question is whether they can overcome their internal division to make those goals a reality.

Opposition politicians pledged to maintain the coalition’s unity, but Hans Hoebeke, DRC analyst with the International Crisis Group, warned, “We are entering murky waters. No one has the popular legitimacy to take over.” He feared “an outbreak of violence.”

Two weeks after the Tshisekedi’s death, Kabila’s budget minister, Pierre Kangudia, claimed yet again that it would be difficult to collect the funds required to undertake a new census in time for a 2017 vote. Close aides to the president continued to insist that it would be impossible hold elections with an updated registry before 2018.

A report in the Guardian concluded:

Analysts suggest two possibilities if opposition factions and the government cannot agree on a process with a minimum of legitimacy: a bloody, popular, urban uprising that ousts the president, or the slow collapse of the government as economic weakness, meddling by regional powers and international isolation undermine its authority.

Until either of those scenarios played out, Joseph Kabila would remain president.

Over the next month, the opposition claimed that Kabila, still intent on staying in power, was purposefully blocking the deal’s implementation and promised to continue to organize actions until he stood down.

In early April, the Catholic bishops who had been mediating the talks announced that they were done: neither side, they claimed, was willing to compromise. Soon after, Kabila announced that he would replace opposition leader Sami Badibanga as prime minister and asked the opposition parties to name his successor.

Many expected Felix Tshisekedi to become the new prime minister. A candidate from the opposition coalition party, The Rally, Tshisekedi enjoys support across the country as well as among diplomatic circles in Kinshasa – something his father could not claim. Surprisingly, on April 8, Kabila appointed Bruno Tshibala as the prime minister of the power-sharing government.

The UDPS had expelled Tshibala in March for contesting the designation of Felix Tshisekedi as his father’s successor. His appointment as prime minister will likely further divide Kabila’s opponents. In the meantime, Kabila has promised that the dialogue will continue.

While Kabila’s willingness to negotiate with the opposition last December seemed to offer hope that the nation would soon elect a new president, he has proven himself to be a wily and resilient strategist. The nation has not experienced a peaceful transfer of power since it gained independence from Belgium in 1960. Unfortunately, this election looks like more of the same.

David Seddon is co-author (with David Renton and Leo Zeilig) of Congo: Plunder and Resistance, Zed Books. He is also the co-ordinator of a series of essays on ‘popular protest, social movements and the class struggle’, under the project of the same name, published on roape.net.

Featured Photograph: Congolese activists in Toronto protesting election results in Congo-Kinshasa, in which President Joseph Kabila was named the winner.

The Corporate Swamp: a New G20 Strategy for Africa

ROAPE

May 9, 2017

By Patrick Bond

The World Economic Forum (WEF) – Africa conference in Durban just hosted some of the world’s most controversial politicians: not just Jacob Zuma and his finance minister Malusi Gigaba plus regional dictators Robert Mugabe, Yoweri Museveni, King Mswati and Edgar Lungu, but also the most powerful man in Europe, the notoriously-corrupt neoliberal German finance minister, Wolfgang Schäuble.

At a public lecture on 4 May hosted by the University of KwaZulu-Natal, Schäuble undiplomatically threatened Britain’s Prime Minister Theresa May, in the midst of her election campaign: “The [Brexit] negotiations will become terribly difficult for the UK. They will see it.”

The next day at the WEF-Africa summit, Schäuble sold his plan for reviving multinational corporate investment in Africa. It is a priority, he said, because “In Europe, we have come to understand that Africa represents one of the most important issues for the growth and stability of the global economy.”

Africa as an ‘issue’ for global economic ‘growth’ – managed by imperialist elites – dates to an earlier Berlin project: the infamous “Scramble for Africa” in 1884-85. The continent’s dysfunctional borders were drawn then in order to facilitate property rights for colonial extractive industries, all the better to ensure infrastructure investment. Roads, railways, bridges and ports needed to withdraw resources have been cemented into place ever since, and now require refurbishing and expansion.

In addition to imperialist aspirations, another explanation arises: Germany’s national election is in September. Schäuble’s boss Angela Merkel needs a rhetorical device to explain to voters how the million African refugees who entered Germany over the last dozen years can be kept at bay in future. Hence the ‘Compact’ with African elites.

Schäuble was speaking on behalf of a G20 bloc that will hold its annual meeting in Hamburg in two months’ time. Amongst the world’s largest economies plus multilateral financial institutions, South Africa – with only the 3^rd largest African economy and sixth most populous society – represents a continent glaringly absent from view.

The ‘C20’ group of civil society critics has expressed concern not only about Schäuble’s top-down process, but about “higher costs for the citizens, worse service, secrecy, loss of democratic influence and financial risks for the public… … and the multinational corporations involved demand that their profits be repatriated in hard currency – even though the typical services contract entails local-currency expenditures and revenues – and that often raises African foreign debt levels, which are now at all-time highs again in many countries.”

In contrast to Berlin, Donald Trump’s Washington regime has proposed cutting the USAID budget dramatically and diverting $54 billion in state funding to the military. But while once preaching isolationism, Trump has already expanded ‘low-profile’ “Africa Command” interventions from the Maghreb across the Sahel to the Horn, according to researcher Nick Turse who last week analysed newly-declassified Pentagon data.

On June 12-13, more Compact details will be shared with G20 finance ministers at a Berlin meeting reportedly to be co-chaired by Schäuble and Gigaba. In spite of the latter’s occasional leftist rhetoric and widespread praise for his WEF-Africa diplomacy, Gigaba’s record of white-elephant infrastructure promotion when he was State Enterprises minister suggests how prone Pretoria remains to offering massive public subsidies to construction and mining corporations. That tendency overlaps precisely with Schäuble’s aims.

In addition to South Africa, five countries have initially signed up to the Compact with Africa – Côte d’Ivoire, Morocco, Rwanda, Senegal and Tunisia – with many more anticipated to join, so as to maintain aid and political favour with the European Union.

Schäuble’s Compact was released in March in the German resort of Baden-Baden without substantive African input (in contrast to Tony Blair’s 2004-05 Commission for Africa which co-opted a comprador elite including Finance Minister Trevor Manuel). Schäuble not only side-lined the more generous ‘Marshall Plan’ strategy advanced by Merkel’s development ministry, he also insisted that African governments provide more public subsidies – and take on much more risk – for ‘Public Private Partnership’ infrastructure. This typically amounts to profits, pilfering and – for consumers of commercialised infrastructure – pain.

In his new autobiography and a Guardian article, former Greek finance minister Yanis Varoufakis described Schäuble as a hypocritical financial dictator who privately confessed that his ongoing squeeze of the Syriza government and Greek people – on behalf of the Euro – should really have been rejected by Athens. The very day Schäuble spoke in Durban, he was also busy imposing more austerity on Greece and rejecting a previously promised bail-out.

Varoufakis regrets trusting Europe’s “Deep Establishment” in 2015, and indeed he should have known better. Fifteen years earlier Schäuble had been expelled as leader of the Conservative Party for accepting and then publicly denying a cash bribe – the equivalent of US$56 000 – from arms dealer Karlheinz Schreiber (whose generosity also wrecked the once-invincible Helmut Kohl’s reputation.) A comeback thanks to Angela Merkel’s generosity gave Schäuble first the German Home Affairs and then Finance portfolios.

Likewise, IMF managing director Christine Lagarde is a close Schäuble collaborator and endorser of the Compact with Africa. Less than six months ago, she too was convicted in French courts for a €403 million payout to a major conservative party contributor, Adidas owner Bernard Tapie, when she was finance minister. Her comeback was far faster than Schäuble’s: she continues in her present job, even gaining a re-endorsement on the day of her Paris conviction by IMF directors including those representing the Brazil-Russia-India-China-South Africa bloc.

Meanwhile African infrastructure has failed to attract anywhere near the investment in the manner envisaged in the African Development Bank 2010 Programme for Infrastructure Development in Africa and the wildly overoptimistic 2012 Southern Africa Development Community regional master plan.

But this is not only a function of weak local systems – including widespread corruption in Africa’s construction sector – but another factor for which Schäuble, Lagarde and other elite financial managers are partly responsible: an utterly unreformed, chaotic world economic system. Africa faced commodity price hikes of 380% from 2002-11 and then crashes by more than 50% in 2014-15, to unprofitable levels. And no Compact with Africa aiming to incentivise multinational corporate investment merely with state supply-side subsidies can reverse those inherent crisis conditions within global capitalism.

Patrick Bond teaches political economy at the University of the Witwatersrand in Johannesburg and directs the University of KwaZulu-Natal Centre for Civil Society in Durban. Bond is on the International Advisory Board of ROAPE. A version of this blog was published in the South African paper Mail and Guardian.

Featured Photograph: Jacob Zuma, President of South Africa, at World Economic Forum on Africa 2009 in Cape Town, South Africa.

Popular Protest & Class Struggle in Africa – Part 8

ROAPE

May 3, 2017

By David Seddon

In this issue of the project, I review the most recent developments in four countries we have recently discussed – Gambia, Equatorial Guinea, Zimbabwe and the DRC – in all of which long-standing leaders have refused to stand down, in some cases against growing internal opposition and external pressure, but with significantly differing outcomes.

Gambia

In our last issue (no. 7), we focused on the situation in Gambia, where President Jammeh, after losing to Adama Barrow in the presidential election held on 1 December 2016, decided not to accept the official results, appearing on state television to say so on 9 December and following this announcement up with the deployment of troops in key locations in Banjul, the capital, and in Serekunda, the largest city.

On 12 December, the bar association called Jammeh’s rejection of the outcome of the elections as ‘tantamount to treason’, on 14 December the UN stated that Jammeh’s response to his defeat was ‘an outrageous act of disrespect of the will of the Gambian people’, and on 16 December, ECOWAS issued a statement saying that ‘Barrow should be sworn in’ in order to ‘respect the will of the Gambian people’. On 17 December, the heads of state of Ghana, Liberia, Nigeria and Sierra Leone arrived in Serekunda to remonstrate with the recalcitrant ‘ex-president’; but were obliged to go home without success.

Jammeh announced, on 20 December, that a new election was necessary: ‘I will not cheat’, he said, ‘but I will not be cheated. Justice must be done and the only way justice can be done is to re-organise the election so that every Gambian votes. That’s the only way we can resolve the matter peacefully and fairly’. Striking a defiant tone, he rejected any foreign interference and declared that he was prepared to fight, and would not leave office at the end of his term in January unless the Supreme Court upheld the results. On 23 December, the president of ECOWAS, Marcel Alain de Souza, announced that troops would be ‘sent in’ if Jammeh failed to step down by 19 January 2017. The military intervention would be led by Senegal. De Souza said: ‘if he doesn’t go, we have a force that is already on alert, and this force will intervene to restore the will of the people’. On 27 December, Adama Barrow called on Jammeh to give up power peacefully, and said that he had no wish to lead a country that was not ‘at peace with itself’, but he also promised that he would declare himself president on 19 January 2017.

As the New Year arrived, Jammeh remained reluctant, and imposed a state of emergency. It seemed for a couple of weeks as though he would make a fight of it. But when it came to the crunch, Jammeh finally agreed to step down, after 22 years as president. On 19 January 2017, Adama Barrow declared on Twitter ‘this is a victory of the Gambian nation. Our national flag will fly high among those of the most democratic nations of the world’. A key factor in this final decision was undoubtedly the threat of military intervention by ECOWAS troops, who actually entered Gambian territory on 19 January, led by the Senegalese army, and remained on stand-by (with UN Security Council support) as Adama Barrow took the oath of office at the Gambian Embassy in Dakar, Senegal.

On Saturday 21 January 2017, Jammeh flew out of Banjul airport together with his family, and headed into political exile, landing in Guinea an hour later. President Alpha Conde of Guinea had served as mediator during the crisis, and appears to have played a crucial role in the last few days before Jammeh’s term of office expired; he left Gambia together with Jammeh and accompanied him on this first short flight. The departure of the ex-president from Gambia came just 24 hours after he announced on state television that he was ceding power to Adama Barrow.

As he left, three of his 13-strong fleet of Bentleys and Rolls Royces, were seen being driven onto a much larger cargo aircraft; and it was initially suggested, by the in-coming president, that he had stripped the central bank of its cash reserves to the tune of nearly £9 million over the previous fortnight. It was thought that he was heading eventually for Equatorial Guinea, which has not signed up to the International Criminal Court, and whose President Teodoro Obiang would presumably not be too discomfited by the presence of Jammeh, given his own son’s collection of Ferraris and Bugattis.

Equatorial Guinea

Obiang, who first assumed office in 1979 as Chairman of the Revolutionary Military Council after a coup, before becoming president in 1982, has himself been in power for 37 years, making Jammeh’s record of 22 years in office seem relatively short-lived. Furthermore, as we remarked, in issue no 4 of this series, ‘the constitution grants Obiang sweeping powers, including the power to rule by decree. Most domestic and international observers consider his regime to be one of the most corrupt, ethnocentric, oppressive and undemocratic in the world.

In an interview on CNN, Christiane Amanpour asked Obiang in October 2012 whether he would step down at the end of the then-current term (2009–2016), since he had been re-elected at least four times in his reign of over thirty years. In his response, Obiang said he categorically refused to step down at the end of the term. After the 2011 constitutional referendum, presidents were limited to two terms of seven years (from then on) and the age limit for candidates was removed. In addition, the post of Vice President was established, allowing the vice president to automatically assume power if the president died in office.

During 2016, as the presidential elections approached, the authorities persistently harassed and arguably persecuted various civil society organisations considered to be a threat to the government and Obiang’s regime. On 28 February, plain clothes security personnel disrupted a meeting of Citizens for Information (CI) in Bata. CI members Leopoldo Obama Ndong, Manuel Esono Mia, Federico Nguema, Santiago Mangue Ndong and Jesús Nze Ndong were arrested and remained in detention without charge at the end of the year. Over 40 others were arrested over the following days in Bata, and at least 10 others in other towns.

On 20 April, four days before the elections, some 140 people were arrested at Bata airport as they welcomed CI’s Secretary-General. Others were arrested later in their homes; they included Gabriel Nze’s sister and elder brother. Some detainees were held at Bata police station and others in Bata prison. All were released without charge over a week later. Several were tortured and otherwise ill-treated, including a man who was made to lie on the floor while soldiers jumped on his hands. On 22 April, police used excessive force against CI members who had gathered peacefully in the party’s headquarters in Malabo. At about 4am, police in helicopters and armed vehicles surrounded the headquarters and used tear gas and live ammunition to force the approximately 200 party members out of the building. Four people were injured by bullets and taken to hospital over 24 hours later, following the intervention of the US Ambassador. At least 23 people were arrested and taken to Black Beach prison where they were beaten. All were released without charge on 30 April.

Elections were held in Equatorial Guinea on 24 April 2016. The opposition consisted of individuals with little political recognition and none of their parties were represented in Parliament. There were also three independent candidates, whom critics claimed were dummy candidates to provide legitimacy for the elections. The Democratic Opposition Front, which is a coalition of dissident parties, boycotted the election, citing that the election would be ‘anti-constitutional’ and that Obiang would win ‘with a big score as a result of fraud’. Opposition candidate, Gabriel Nse Obiang Obono, was prevented from running for not meeting residency requirements.

Amnesty International reported that ‘the rights to freedom of expression and of peaceful assembly were severely curtailed ahead of presidential elections in April. Police used excessive force including firearms against members of opposition parties. Hundreds of political opponents and others, including foreign nationals, were arbitrarily arrested and held without charge or trial for varying periods; several were tortured’. In January 2016, police in Bata arbitrarily arrested Convergence for Social Democracy members Anselmo Santos Ekoo and Urbano Elo Ntutum, for ‘disturbing the peace’, as they distributed leaflets and announced a meeting of their opposition party. They were released without charge 10 days later.

It was announced on 28 April 2016 that Obiang had won the election by an overwhelming margin, as expected. Provisional results showed him with 93.7 per cent of the vote on a turnout of 92.9 per cent. He was sworn in for another term at a ceremony in Malabo on 20 May. He then appointed his son, Teodorin, as vice president. Between February and May 2016, over 250 people were arrested for attending opposition parties’ meetings. All but four of those arrested were released without charge after being held for over a week. Members and sympathizers of the opposition party Citizens for Innovation (CI) were particularly targeted, as were relatives of the party’s Secretary-General, Gabriel Nze. Taxi drivers taking people to meetings were also arrested.

In December 2016, Obiang’s son’s lawyers failed to convince the International Court of Justice that he had diplomatic immunity and at the beginning of January 2017 it was announced that Teodorin Obiang was to go on trial in absentia for corruption and money laundering. He had already agreed with US officials to forfeit property worth more than US$30 million (including a dozen luxury cars) but still faces an array of legal cases across Europe. In the meanwhile, his father, the president of Equatorial Guinea, is estimated to have a net worth of some US$600 million, making him one of the world’s wealthiest heads of state.

The country over which he has ruled as an elected dictator for nearly 40 years is the second richest in Africa, with the highest average per capita on the continent but (as we reported in issue no. 4) the majority of the population lives under the poverty line. The African Economic Outlook describes the situation succinctly, stating that ‘the country falls short of its economic and financial potential with high levels of poverty (more than 60 per cent), limited access to drinking water and sewerage, and the prevalence of contagious diseases’.

Zimbabwe

In Zimbabwe, which we last discussed in issue 6, popular protest increased significantly during the period June to August 2016 to peak in September (Fig 1).

This spike in violence against civilians came after months of upheaval against the Mugabe regime by protesters from various pressure groups. Protesting against the regime involves a mixture of organised political opposition, unions and seemingly spontaneous social movements.

The Tajamuka and ThisFlag campaign represent examples of popular movements which have protested repeatedly against the government on the street and online. ThisFlag seems to function as an avenue by which ordinary Zimbabweans can demonstrate their grievances against the government, with the group’s leader, Pastor Evan Mawarire, calling for Zimbabweans to engage in passive strikes and stay-aways to make their voices heard (ACLED Conflict Trends, September 2016). In contrast, the Tajamuka campaign is focused on forcing Mugabe to step down before the 2018 elections and has been engaged in active protests and riots in Harare and Bulawayo (Tajamuka, 2016). Protesting with these social movements is the National Vendors Union of Zimbabwe (NAVUZ) which is also demanding an end to Mugabe’s administration.

In the face of these civil society developments, the conventional opposition parties have become increasingly concerned about losing relevance as the mouthpiece of anti-Mugabe sentiment. They have formed an alliance and also engaged in widespread protest against the government. The alliance includes notable former regime insiders and opposition politicians including Morgan Tsvangirai’s Movement for Democratic Change-Tsvangirai (MDC-T), Welshman Ncube, former Vice-President Joice Mujuru’s Zimbabwe People First (PF) party, Tendai Biti’s People’s Democratic Party (PDP) and Elton Mangoma’s Renewal Democrats of Zimbabwe (RDZ).

With President Mugabe and the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) facing internal coalition competition and popular discontent, the regime has relied heavily on violence to cow the opposition into submission. The spokesperson of the Tajamuka campaign and the leader of the NAVUZ have both been abducted and tortured by unidentified men suspected to be security agents (according to Dewa, 14 September 2016 and Ncube, 29 September 2016). The manner in which these individuals were targeted echoes the disappearance of Itai Dzamara, who led a protest against the Mugabe regime. This gives a clear message to those orchestrating the anti-Mugabe protests that they can also be made to disappear altogether if necessary.

ZANU-PF is also continuing its campaign of violence against the street-level machinery of the opposition with ward councilors from both the MDC and PF assaulted by ruling party cadres. While the regime is seeking to decapitate the unions and social movements by intimidating their leaders, it is aiming to cripple the political opposition by removing its supporters and lower level functionaries.

In the meanwhile, the economic situation continues to deteriorate. In October 2016, the World Bank issued a report on Zimbabwe in which it stated that the country had been severely affected by a financial crisis and drought; the economy is estimated to have grown by only 0.4 per cent in 2016, with agriculture having shrunk by 4.2 per cent in 2016, due to drought. Going forward, external payment arrears may lead to a further contraction in imports and a decline in GDP. The financial crisis continues to have a significant impact on incomes, while the drought has disproportionately affected the rural poor (the number of extremely poor people is expected to have increased to 3.28 million in 2016, up from 3.16 million in 2015). Moreover, the number of food insecure people was considered likely to increase to over 4.4 million people by end 2016/early 2017.

In response to the crisis, the Government announced a fiscal adjustment programme in the Mid-Year Fiscal Statement presented on 8 September, 2016. This programme included measures to limit the wage bill; but some of these were subsequently reversed. The Bank considered that the economic situation is likely to continue to deteriorate and stated that ‘fiscal adjustment in the form of a reduction in the public sector wage bill is needed to prevent further accumulation of government borrowing from the banking system. Without a fiscal adjustment and/or access to external credit through arrears clearance, the government will have to borrow from banks. This is likely to result in an accumulation of public debt, diminishing investor confidence and limiting Zimbabwe’s growth prospects’.

Such a ‘fiscal adjustment’ would, however, cut – or at the very least freeze – public sector wages, hitting civil servants whose pay is already widely considered to be inadequate and increasing the scale and extent of urban poverty. Already, the rate of inflation – which had remained negative throughout much of 2016 – had begun to increase as the price of food, cooking oil and non-alcoholic beverages rose. In the meanwhile, the opposition has continued to agitate for ‘meaningful change’, and has even fallen out with the Zimbabwe Electoral Commission over their demand for electoral reforms – under the banner of a National Electoral reform Agenda – before the ‘make-or-break’ national elections planned for 2018, while the Zimbabwean authorities have continued to control any significant form of collective action. In the most recent confrontation over a ‘mega march’ in Harare – planned for 22 March 2017 and to be led by MDC president Morgan Tsvangirai – the authorities effectively went back on their previous decision to allow this protest demonstration to take place by confining it to the central business district and not permitting a march to take place through the city. The police stated that they had concerns that there was a risk that the proposed march would turn violent.

DRC

On Monday 19 September 2016, thousands of opposition supporters marched in Kinshasa against President Kabila and his bid to extend his term; there were demonstrations also in Goma in the east of the country. The next day, Human Rights Watch reported that security forces had killed more than three dozen people in the latest bout of protests (other sources reported higher figures), and close to 200 people are believed to have been arrested. Interior Minister Evariste Boshab referred to the protests as ‘an uprising’.

The protests, combined with external pressure, had the effect of persuading the ruling coalition to enter into ‘a dialogue’ with the smaller opposition parties, which led to a provisional agreement, announced in October, that President Kabila would stay on until presidential elections to be held in 2018, but would then stand down. The main opposition coalition objected strenuously to this ‘deal’, arising out of talks from which it claimed it had been excluded, and called for another general strike in protest. The ‘dialogue’ continued, however, and pressure on Kabila grew after an opinion poll revealed that his popularity had collapsed to less than 8 per cent. In November, Samy Badibanga, leader of the main opposition bloc in parliament, was nominated by Kabila to take over from Augustin Matata, marking a significant political development. Towards the end of December 2016, a combination of mounting popular tension, poor polling for the president, and pressure by the international community led to the signing on 31 December 2016 of a ‘global and inclusive agreement’ mediated by the Congolese Catholic Church. This involved a transitional government, to be in place by March 2017, a promise that President Kabila would not run for another term, and elections to be held in 2017.

Kabila himself promised that elections ‘would be organised in the coming months’, but warned against foreign ‘interference’, apparently reacting to remarks by some UN Security Council diplomats who had come to visit the DRC to push for a peaceful transition of power. Tshisekedi left Kinshasa for Brussels on 24 January 2017 as negotiations on the implementation of the 31 December agreement – which were to be completed by the end of January – stalled over several issues, including the procedure to appoint a new prime minister and the division of ministerial positions. The lack of progress, in the context of deepening economic malaise and insecurity in several provinces, including Tshisekedi’s native Kasai Central, increased popular frustration and tension. On 1 February 2017, Etienne Tshisekedi died, at the age of 84.

His death came at a critical moment, as talks between opposition parties and representatives of President Joseph Kabila faltered. He was set to lead a transitional council, as part of an agreement put together in December intended to pave the way for Kabila to leave power in 2017 and refrain from running for a third term as president. Some have suggested that Tshisekedi’s son, Felix, is likely to be named prime minister in a forthcoming power-sharing government, if the agreement holds.

On 16 February 2017, the budget minister, Pierre Kangudia, claimed that it would be difficult to collect the funds required to undertake a new census prior to elections in 2017. This claim came only two weeks after the death of Etienne Tshisekedi, believed by many to be the only man with the moral and political authority to unify the fragmented opposition to President Kabila. Close aides of the president continue to insist that it would be impossible hold elections with an up-dated registered electorate before 2018. A report in The Guardian on-line by Jason Burke the same day commented that ‘analysts suggest two possibilities if opposition factions and the government cannot agree on a process with a minimum of legitimacy: a bloody, popular, urban uprising that ousts the president, or the slow collapse of the government as economic weakness, meddling by regional powers and international isolation undermine its authority’.

A good deal will depend on the ability of Felix Tshisekedi or Moise Katumbi to orchestrate a coherent and credible opposition. In the meanwhile, Joseph Kabila remains President.

David Seddon (criticalfaculty1@hotmail.co.uk) is a researcher and political activist who has written extensively on social movements, class struggles and political transitions across the developing world.

Featured Photograph: September 16, 2016 protesting non-organisation of the elections in Kinshasa.

Are Developmental States Accidents of History?

ROAPE

May 2, 2017

By Fadekemi Abiru

When a conversation about developmental states takes place, the growth miracle of the East Asian Tigers is always posited as a prime example. Failure to identify developmental states in other regions – such as Sub-Saharan Africa – has caused many to fear that these Asian instances may never be replicated again. Therefore, the questions put forward are: Can African states be trusted to gather enough intent to play a more central role in development? Or was the concept of the ‘developmental state’ in the East Asian region shaped by a set of circumstances that came about by chance?

Arguably, a fundamental requirement of a developmental state is a leadership that intentionally seeks to place the state at the centre of collective action. The state does this by mobilising both the market and civil society to structurally transform the economy. This involves developing technological capabilities or creating new rents, in order to secure a gainful position on global value chains.

The existing good governance literature has been very critical of the central role of the state in achieving growth and development. Such a sceptical view is not unfounded, as opaque business environments in African countries show that state intervention may actually hinder development. This strand of the developmental debate therefore argues that developing countries need to engage primarily in market friendly policies as part of their policy menu for economic development.

This characterisation is misleading for two reasons. First, the promotion of market-led strategies feeds into the false dichotomy of states and markets in driving growth and development. This misrepresentation neglects the reality that the market and state often come together to form a mutually reinforcing mix. Secondly, strong state institutions alone cannot help a country achieve developmental state status. External factors such as trade dynamics also matter. African countries today are constrained in a different way to the East Asian countries during their developmental state journey in the 1950s and 1960s. The choiceless democracies African countries experience as a result of so-called developmental aid limits their autonomy over their own policy space. The danger in this is that the pressure to appease donors may force African countries to implement open-market policies that are harmful to their economy.

Mauritius is usually presented as the poster image for successful neoliberal ideas in an African context. By the 1990s, the small African island was dubbed the “Mauritius miracle” after successfully modelling its economic planning after the East Asian models. Growth policies included generous tax incentives, economic diversification and export led growth based on manufacturing. But using this as evidence that ‘openness’ is unambiguously beneficial is false. Mauritius has enjoyed preferential access to U.S. and European markets in a way other African countries have not. Since independence in 1968, the European Union has had a set quote of sugar exports from Mauritius. This favourable arrangement has been set at a guaranteed price that is about 90% above the average market price. Consequently, Mauritian taxpayers and producers have been able to enjoy the rents generated from this.

Offering the East Asian developmental state model to African states may yield disappointing results. For starters, it is possible that while countries like Japan and Malaysia had states that successfully took on the leadership role in development, external circumstances had as much say in how internal decisions played out. Take the diverse outcomes of the Cold War relations as an example. For geo-political reasons, the U.S. supplied its Asian allies with preferential access to its domestic market, a critical element in the “take-off” growth phase for the region. African states in contrast, received no such assistance. Where the Republic of Korea alone received $6 billion between 1946-1978, African states had to share $6.89 billion over the same period. This supports the idea that the threat of communism played out differently in both regions. While the Asian states had internal and external support to generate a leadership geared towards developmental ideas, the African continent became the battleground where Cold War tensions played out.

The developmental state idea is still one that is disputed in the academic literature. As Thandika Mkandawire pointed out in 2001, “trial and error” is as much a part of the success story of developed countries. African rulers can be proven to possess strong political will for the developmental state concept. During the post-colonial years when development and nation building were taken seriously, significant strides in capital accumulation and investment in infrastructure were made. Between 1967-1980, more than a third of the 27 countries in the world that grew at over 6% annually for more than a decade were African. This group included resource-rich countries such as Nigeria and Angola. Others such as Kenya and Cote d’Ivoire were also seen to outperform the likes of Malaysia and Indonesia.

The African experience therefore shows that intent is not enough, but spaces in which states operate also matter. On the very short list of “successful” African countries is Botswana, a country that has received and deserves attention for its development achievements. The country has been impressive in its use of diamond revenues to invest in social and infrastructural services such as education, health facilities, roads and so on. It is therefore interesting to understand how Botswana managed to escape the “Dutch Disease” that many resource rich countries like Nigeria suffer from.

When Botswana started out as a newly decolonised country, it was a member of the Rand Monetary Area and had no independent currency. In this way, even after the first diamond mine was opened in Orapa, no sharp currency appreciation was observed. Even in 1971, Botswana introduced its own currency, yet exchange rate stability reigned. This could have been down to the broad political coalition that was formed to support the Botswana Democratic Party (BDP). Unlike other African countries with diverse ethno-religious groups, the ruling elites were able to exploit conflicting differences to bolster support for one political party. This was due to the systemic vulnerability the country faced at the time as a result of its exposure to South Africa, particularly during the apartheid era. As a result, unity was seen as a source of security and this assured a relatively stable political and economic horizon, which in turn encouraged the adoption of sustainable economic policies.

Overall, what makes the developmental state so ill-suited to other parts of the world is how specific it is to a region whose development experience was aided by internal as well as exogenous factors. Even African countries like Botswana and Mauritius who have been relatively successful in sustaining long periods of economic development would find their economic and political landscapes transformed. Yet to then argue that developmental states are accidents of history neglects the idea that circumstances change, and the political will driving development policies must adjust accordingly. African states looking to take on a more central role in economic planning must pay attention to both domestic and international spaces. Understanding the specific history of the developmental state is a vital task for those seeking real development for the continent.

Fadekemi holds a BSc in Economics and is currently completing her MSc at the London School of Economics and Political Science. She worked as a research analyst for Agusto&Co, and her research interests are in public policy and development in Africa.

Featured Photograph: What are the development lessons from Botswana? High-security administration building and transportation machinery below, Jwaneng Diamond Mine, Botswana.

Domestic Resource Mobilisation in Africa: A Need for Intervention

ROAPE

April 26, 2017

By Gretta Digbeu

The question of domestic resource mobilization, which was a major preoccupation for early development economists in the period before the neoliberal counter-revolution, has become an increasingly pressing issue for African countries in the context of financial liberalization, rising external debt and capital flight. We saw how rapid liberalization has hurt state revenue generation across the continent, and how massive outflows of private funds have fueled external borrowing, which in turn has driven further capital flight. The negative gap between saving and investment in sub-Saharan Africa has been growing since the 1960’s, and the region’s heavy reliance on aid to finance this gap has only exacerbated capital flight. Not only is sub-Saharan Africa a net creditor, but it also has a larger share of private wealth held abroad than any other developing region. Moreover, it is well known that much of the external debt contracted by African governments ends up being illegally exported as private assets into western financial markets, prompting more and more ordinary citizens to keep their wealth outside their domestic economies. Foreign aid has actually been detrimental to African development; is has provided public agents with funds to funnel out of their administrations and dis-incentivized private agents from investing in their home countries, instead of helping to reverse the decried cycle of dependency between Africa and the West. There is hope however. The experiences of Botswana and Kenya provide useful lessons for leaders in the region seeking to boost savings and capital formation. The old Kenyan Postal Savings Bank might seem like a detail in the institutional landscape of the continent, but it serves an essential function that feeds its state and citizenry with vital resources.

One of the most prominent features of the East Asian miracle was the state’s reliance on domestic resources. The East Asian development experience highlights how taxation, and therefore domestic savings, is closely related to processes of state formation and the political settlements formed by the elite. The East Asian tigers’ high dependence on the domestic economy for state revenue encouraged leaders to adopt policies that promoted economic growth and long-term structural transformation. The fact that these countries had superior saving performance – rates 10% higher than those of sub-Saharan Africa from the 1970’s to 1990’s, with savings exceeding investment for most of that time – largely accounts for their developmental success. Furthermore, and perhaps most importantly, we have seen how in these countries superior saving performance was achieved through the coercive power of the state, as it mobilized revenue through various forms of forced savings (e.g. restrictions on consumer credit, financial restraint, mandatory pension contributions, and the promotion of postal savings). State coercion is central to domestic resource mobilization, and such coercion is only achieved through strong political coalitions. For instance, in Singapore the People’s Action Party has been in power since 1959. The PAP’s uninterrupted rule allowed the state to institute the famous Central Provident Fund, a compulsory national savings plan that has been an important form of funding for development projects, like the public housing in which most of the country’s residents now live.

Political coalitions lay the foundations for the development of the state and other institutions that are indispensable for its economy to function. They drive policy responses to resources booms, external threats, paradigm shifts in development practice, and crises in commodity prices. They help us understand divergent development trajectories across regions and countries with similar economic indicators and colonial experiences, as leaders choose whether to consume surpluses or invest them in long-term development goals. They drive and sustain certain levels of economic performance according to the depth of leaders’ commitment to common goals, and the breadth of their inclusiveness of political rivals.

Botswana and Kenya are two cases in point. As a general trend, Southern African countries – South Africa, Zimbabwe, Botswana, Namibia – and Kenya have always had higher tax takes than we would expect from their income per capita figures. Their superior tax collection performance is due to the institutional and infrastructural legacy they inherited from the labour reserve organization of the colonial order. In these countries indigenous populations were integrated into labour markets so as to uphold the social and political supremacy of the white population, leading to more elaborate state structures, repressive state capacity, higher levels of regulatory reach, lower levels of informalization and severe socioeconomic inequality. Botswana and Kenya owe their governments’ administrative strength to the emergence of a developmental racist welfare state, whereby cross class solidarity among whites buttressed large bureaucracies that closely managed native Africans and white businesses alike, extracting revenue from them through poll taxes and income taxes respectively. We can partly accredit the institutions of labour reserve economies with both countries’ remarkable performance in harnessing domestic resources for developmental purposes. However, we must ultimately attribute the fact that these institutions survived political restructuring after independence to the rise and sustained dominance of strong and resilient political coalitions in each of these countries.

Botswana’s successful transition from a poor agrarian economy, to the fastest growing economy in the world until 2004, was made possible by the Botswana Democratic Party’s stable and enduring monopoly on power. The BDP rests on a broad electoral coalition that formed in the early years of independence and has endured the strains of economic inequalities among certain segments of the population, ethnic competition, and tensions over the role of traditional leaders. At independence in 1966 the country’s economy relied mainly on cattle exports, remittances from migrant labor in South African mines, and foreign aid. When diamond mining began in the 1970’s, the BDP made sure to strategically use the country’s mineral wealth to maintain its firm grip on power. The ruling party brought together groups with disparate interests by building on economic interdependencies, defused political competition among rival groups, and most importantly, marginalized radical domestic parties by using apartheid in South Africa as an existential threat to the state that called for strong macroeconomic performance. This reliance on economic growth for survival and stability resulted in laudable, prudent management of the country’s mineral sector, and capital accumulation that far surpassed any other African country that experienced similar periods of sustained growth. Botswana effectively avoided rentier politics and Dutch disease in exploiting the booming diamond industry, legitimizing its monopoly on power over five decades.

The BDP made sure that during the period of astonishing growth driven by the expansion of diamond mining, other traded sectors (e.g. livestock) were not completely sidelined, and that there was growth in non-traded sectors. Moreover, Botswana is one of the few countries to achieve high and sustained growth despite persistently low private saving rates, thanks to its extremely high public savings, which have been made possible by the fact that the government collects 75-82% of diamond industry profits. The BDP has been able to exert its coercive authority so that heavy revenue extraction through corporate taxes (including capital gains, dividends, interest and royalties) more than compensate for the population’s very low personal saving levels. Lastly, the BDP has provided incentives for businesses to keep their capital in the domestic economy through tax exemptions and the creation of the Botswana International Financial Services Center (IFSC). Although things in Botswana are far from perfect – extreme inequality, poverty and unemployment have emerged as pressing social issues – the BDP government has the political, financial and administrative foundations necessary for tackling these problems.

Similarly, Kenya’s longstanding legacy of strong and autonomous executive power has allowed ruling coalitions to pursue sound macroeconomic policies despite shifting alliances and heightened ethnic competition over time. Throughout most of the post-colonial era, patronage and rent distribution among elites helped the executive branch manage ethnic divisions and preserve its monopoly on power. The presidency has remained the central seat of power to this day despite Kenya’s transition to a bicameral parliament in 2010, so much so that the expansion of political parties has remained stunted even after the return to multi-party politics in the early 1990’s. The Kenyan leadership ensured stable periods of accumulation and growth throughout the 1960’s and 1970’s; moreover, the country owes its general economic recovery from the 2007-2008 post electoral violence to the strength of its ruling coalitions, which have dominated the political scene despite frequent party realignments in an increasingly polarized environment. While extreme poverty remains a crucial development challenge for Kenya, overall trends have been positive in recent years: the middle class continues to grow and public service provision has improved.

Since the early days of independence the Kenyan government has instituted forced savings through strict import and foreign exchange controls, and regulations that appropriate private savings to finance fiscal expenditure. Kenya effectively protected its domestic industry in the 1990’s despite the onslaught of structural adjustment and liberalization in the previous decades; it also maintained stable saving rates in the late 1980’s and early 1990’s in the face of chronic fiscal deficits that emerged in the 1970’s. Kenya became East Africa’s biggest economy while erecting an extensive and elaborate taxation regime that closely monitors the corporate sector, thereby keeping more private capital at home. Moreover the country developed one of Africa’s most dense and diversified financial sectors, which has contributed to 40% of gross domestic savings since the late 1980’s thanks to heavy regulatory supervision by the state. The Central Bank of Kenya has been the powerhouse behind such supervision, as it closely monitors money supply through restrictions on commercial banking activity. For instance, in 2016 the Bank imposed controversially tight controls on large cash withdrawals and deposits, requiring individuals to state the provenance or destination of the funds, and specify how they had been obtained or to what use they would be put.

A key component of Kenyan domestic resource mobilization, which is reminiscent of the success of East Asian development, is the government owned Kenya Post Office Savings Bank. Established in 1910, the bank provides tax exempt interest income to key segments of the population, as well as linkages with the corporate sector and commercial banking institutions that streamline and facilitate private savings. Moreover, the bank now has an extensive geographical reach (over 100 branches nationwide) that enhances the opportunities of financial inclusion for rural populations, whereby they can contribute to state revenue generation.

The experiences of Botswana and Kenya illustrate the imperative of domestically generated national savings as a vehicle for capital accumulation and broader resource mobilization. Before African states can even hope to mobilize revenue through taxation, pension funds and other forced savings schemes however, they must impose capital controls to curb capital flight. Highly indebted nations with low levels of GDP per capita, large informal markets and narrow tax bases cannot leap to enacting reforms like mandatory pension contributions, higher import tariffs, or higher direct and progressive income taxes if they do not first keep capital in the domestic economy. These states must defy the so-called logic of free capital markets, and impose strict barriers to the movement of funds outside of their countries. Despite their growing unpopularity in the international community with the rise of the Washington Consensus, capital controls are an imperative policy tool.

Domestic resource mobilization in Africa requires that states reclaim policy space and appropriate resources through coercion if necessary. While the imposition of capital controls are one way of achieving this, such reforms hinge on the stability and strength of political coalitions. These coalitions are indispensable for legitimizing the institutional arrangements that allow for robust state revenue generation, and buttress long-term macroeconomic stability and growth.

Gretta Digbeu is completing her MA in Development Studies at the London School of Economics and Political Science, she is a graduate of Georgetown University in Economics and Spanish. A native of Cote d’Ivoire, Gretta’s research focuses on trade policy, structural transformation in Africa, industrialization and food sovereignty.

Featured Photograph: View of Le Plateau in 2010, the central business district of Abidjan, Côte d’Ivoire, and the current economic and administrative capital.

War, Imperialism and Libya: After the War, the War (part 2)

ROAPE

April 24, 2017

In the second part of his blog on Libya, Gary Littlejohn looks at Gaddafi’s plans to establish a pan-African currency independent of the French ‘African’ franc (CFA). It was these plans, he argues, that posed a serious threat to Western interests on the continent; Gaddafi’s elimination quickly became an ambition of the intervention in Libya in 2011.

By Gary Littlejohn

An email to Hillary Clinton, citing a sensitive source, stated that ‘Qaddafi’s government holds 143 tons of gold and a similar amount in silver… This gold was…intended to be used to establish a pan-African currency based on the Libyan gold dinar. The plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).’ For those not aware of this, the CFA ensures that France has considerable influence on the monetary policy of its former colonies in Africa, an arrangement that has now existed for decades (see Sylla Ndongo here).

However, this replacement for the CFA was only intended to be the first stage of this Libyan initiative. From early this century, Gulf Arab OPEC countries had begun to invest their petro-dollars in sovereign wealth funds, rather than entrust them to US and UK money markets. This meant a loss of control of a huge amount of liquidity (trillions of dollars) that the London and New York money markets relied upon.

In the months and even years prior to the US decision to destroy the Gaddafi government, Gaddafi had been proposing that Africa adopt the ‘Gold Dinar’. It was to include Arab OPEC countries for their sales of oil on the world market. Gaddafi seems to have forgotten about or been unaware that Saddam Hussein’s decision to use the Euro instead of the US dollar to sell oil was a factor in the decision to invade Iraq in 2003.

As President of the African Union in 2009 Gaddafi had already called upon African oil producers to sell oil in Gold Dinars. Angola and Nigeria were also at this time moving to create their own sovereign wealth funds, and so the threat to the US dollar and Western financial markets was clear. It should not be forgotten that this was at a time when these financial markets were still trying to recover from the financial crisis of 2007-08. Establishing a common gold-backed currency for such trade would have seriously weakened the position of the IMF and World Bank. It would also have implemented an earlier decision of the Pan-African Parliament in 2004 to create an African Economic Community with a gold-backed currency by 2023. Writer F. William Engdahl has written that it was little ‘wonder that French President Sarkozy, who was given the up-front role in the war on Qaddafi by Washington, went so far as to call Libya a “threat” to the financial security of the world.’

If there was any doubt that the military intervention in Libya was always intended to result in regime change, then Wikileaks has provided documentary evidence from Hillary Clinton’s email files. One of the most important documents is an email from Hillary Rodham Clinton (HRC) forwarding an email from one of her staff which lists Clinton’s ‘Libya’ activities before and after the beginning of the military intervention. It is dated 2 September 2011, and describes activities starting in February 2011. The staffer’s email text opens with the statement:

HRC has been a critical voice on Libya in administration deliberations, at NATO, and in contact group meetings — as well as the public face of the U.S. effort in Libya. She was instrumental in securing the authorization, building the coalition, and tightening the noose around Qadhafi and his regime.

A clear indication of Clinton’s intentions comes from the remarks about her visit to Geneva on February 28 2011, over two weeks before the military intervention started:

February 28 — HRC travels to Geneva, Switzerland for consultations with European partners on Libya. She gives a major address in which she says: “Colonel Qadhafi and those around him must be held accountable for these acts, which violate international legal obligations and common decency. Through their actions, they have lost the legitimacy to govern. And the people of Libya have made themselves clear: It is time for Qadhafi to go — now, without further violence or delay.” She also works to secure the suspension of Libya from membership in the Human Rights Council.

Libya in the aftermath of 2011: the ‘benefits’ of chaos

While the spread of Libyan arms across North Africa has been subject to comment and analysis, there has been a series of allegations on various websites that the USA has organized the transfer of some of the captured arms from Libya to Syria via Turkey. Indeed, it is claimed in some quarters that the death of the US Ambassador to Libya Christopher Stevens and three other Americans in Benghazi was connected to dealings with those involved in such arms transfers. Ambassador Stevens and others died in an attack on the US Consulate in Benghazi on September 11 2012. If true, such allegations suggest that the failure to develop a proper arms reduction and reconstruction process was as much a product of this hidden agenda as it was a result of lack of foresight. Such a conclusion would contradict the results of 8 official investigations into the US deaths at Benghazi in this attack, including one lasting two years and costing about $7 million.

Christine Lamb in The Sunday Times of London on 9 December 2012 claimed that the US was running a covert programme to arm Syrian rebels with heavy weapons from Libya and that State Department officials were in daily contact with Syrian rebels using Skype. Among the Libyan weapons mentioned were SA-7 missiles. On 9 May 2013 Washington’s Blog made a series of claims about the US arming the rebels and explicitly linked this to the death of Ambassador Stevens and others in Benghazi.

If such allegations have any validity, then they illustrate that the ongoing chaos in Libya had great benefits for the US in facilitating support of rebels in Syria. An additional benefit was a financial one: sovereign wealth funds, if not frozen, could be managed by Western financial institutions. During 2016 there was a court case in London concerning the management of such a fund by Goldman Sachs. The Libyan Investment Authority’s case was that the fund had been mismanaged, and compensation was claimed. The case was notable for the fact that 98 per cent of $1.3 billion had been lost, and also because unconventional methods including prostitutes had allegedly been used to secure the contract to manage this fund.

Unintended Consequences

One of the potential benefits from ousting the Gaddafi government might well have been increased Western participation in, or even control over, the Libyan oil industry. By and large this has not happened, owing to the ongoing military conflict, and indeed Libyan oil output has suffered as a consequence of the difficulties of producing and exporting oil. General Khalifa Haftar – an important player in current military efforts to control Libya’s oil, and a leading commander of Gaddafi who then broke with him and spent the twenty years prior to March 2011 in suburban Virginia – has managed to make himself relevant to Western governments by controlling access to the major oil fields and providing many of the ground troops that ousted so-called Islamic State (IS) from Sirte early in December 2016. IS had grown rapidly in the chaotic conditions following the overthrow of Gaddafi and had come to pose a serious threat to the major oil fields. Haftar’s effectiveness in driving IS back has meant that he could not be ignored as a key player in Libya. This proved to be most inconvenient because he was a leading figure in the Tobruk administration that formed a rival government to the Government of National Accord (GNA) which is sponsored by the UN.

The result has been that various governments, including the USA, France, the UK, Italy and even Germany have sent troops into Libya with varying degrees of public acknowledgement of their presence, and they have evidently cooperated with Haftar’s forces in driving IS out of Sirte. There is even radio traffic evidence of Western air support for Haftar’s forces including air strikes. Given that the GNA has had great difficulty during 2016 in establishing itself in Libya, the support for Haftar’s forces has been kept ‘low profile’ insofar as this is possible. This is because the very countries supplying such military support are officially strongly supportive in public of the GNA. Meanwhile Haftar paid two visits to Moscow in the autumn of 2016, managing to play Russia off against the EU which is now keen to gain Haftar’s support for the GNA in Tripoli. Russia now feels that through Haftar it may manage to regain some influence in Libya.

Conclusion

The ongoing foreign military involvement in Libya clearly shows that Libya is seen as merely an object to be controlled for financial and mineral resource purposes, and probably for arms transfers. The welfare of Libyans has always been secondary for those countries that have continued meddling. This is not to claim that foreign perceptions of Libya are in any way an adequate explanation of events there. The activities of Khalifa Haftar, for example, indicate that Libyan agency produces outcomes that are not those intended or wished for by the intervening, imperial powers. Rather these blogs have indicated that the reasons for foreign intervention were not those publicly claimed. Lack of knowledge or forethought on the part of the intervening countries does not explain the ongoing difficulties now faced by Libya. These difficulties are in part the result of trying to use Libya to increase control of both financial and mineral assets. With new interests and players, the imperial scramble for riches on the continent continues.

Gary Littlejohn was Briefings and Debates editor of the Review of African Political Economy from 2010 to 2015. He is the author of Secret Stockpiles: A review of disarmament efforts in Mozambique, Working Paper 21, Small Arms Survey, Geneva, October 2015.

Featured photograph: Egypt’s president Nasser receiving Libya´s leader Muammar Gaddafi between September 1969 and September 1970.

They are Deceiving Us: Economic Growth, Ideology and Africa

ROAPE

April 20, 2017

In a recent Debate piece, published in our journal and available to roape.net readers here, Franklin Obeng-Odoom looks at the debates on growth in Africa. He argues that most of the models in economics were formulated based on experiences outside Africa, raising questions about their relevance to the continent where conditions are markedly different to those inspiring these models. For too long growth has not been seen for what it is: an ideology invented to defend capitalism. In this blog based on his longer Debate article, Obeng-Odoom looks at the consequences for Africa of this deception.

By Franklin Obeng-Odoom

Growth is an ideology invented, among others, to make certain nations appear stronger than others. With the identity of nations tied to it and the very survival of capitalism dependent on it, growth is defended and promoted even at the expense of human life and the destruction of our planet. Neoclassical economics, in particular, is its chief intellectual toolbox. It justifies growth in whichever way it can – from offering unconvincing explanations for biodiversity loss through providing misleading analyses of global inequalities and development, to promoting a particular form of urban development that is centrally about property-based growth rather than orientated to people or planet. With a devoted group of economists as its chief advocate, ‘growthism’ has found much support in Donald Trump’s America and in recent discussion about Africa, often centred on the idea that ‘Africa is on the rise’.

Africa: Why Economists Get it Wrong

In Africa: Why Economists Get it Wrong, Morten Jerven demonstrates concretely that economists are entirely mistaken in their analyses of what is happening in Africa. Not only is their statistical information contrived, but also their description is wrong, their explanation is worse, and their policy advice is grotesquely awry.

For Jerven, economists get Africa wrong because, although they pick ideas from history, they cherry-pick this narrative and as a consequence do not really understand the totality of history. They seek, instead, to use shortcuts to become African experts and depend on downloaded data sets often without knowing either the contexts within which the data was generated or the processes that are captured in the data. Relying on unreliable data, the models pushed by these so-called experts are also ahistorical. They ignore detailed, long-term studies ask the wrong questions and, as a result, they are unable to accurately interpret economic phenomena. Even worse, these problems cannot be remedied because they are structural to the field: unless economists are prepared to abandon years of perfecting a flawed approach, the problems can only get worse.

Indeed, for Jerven, addressing the problem is only possible if the ‘grand question’ asked about Africa changes. The question needs to be reformulated from why Africa has not grown/has grown slowly, to how Africa grows and why Africa first grew, declined, and has regained growth. This reframing has two advantages: it gets the history right but also leads to a focus on the correct contemporary policy issues. So, Jerven argues, the focus for this new approach should be that Africa as a continent has experienced recurrent growth, not newly occurring growth.

Critical assessment

For non-economists, this book gives the reader confidence to judge economists; question their assumptions, their evidence, their interpretations, and allows them to ascertain the plausibility of their ‘technical’ economic advice. Economists too will gain from reading this book, especially if they take the author’s advice seriously: ‘a bit more humility among …economists would be useful; in particular, a better understanding of the limits of their own data sets and statistical testing is needed’.

Political economists may well say, ‘we told you so,’ however, they will cringe at the near total absence of ‘the political economy of growth’ in the book. The book gives little attention to whether social progress is, in fact, accurately measured by GDP. For example in what ways GDP actually leads to a devaluation of labour in the huge informal economies in Africa, or the widespread existence of social enterprises whose activities are devalued by a ‘growth’ measure, and the direct link between GDP addiction and the brazen destruction of natural resources in Africa.

More profoundly, the book overlooks the invention of GDP as a springboard to enhance the power of Western countries and to force Africa to open its doors to plunder by transnational corporations. This ‘imperialist’ element to the promotion of ‘growthmania’ was an idea developed at length in E. J. Mishan’s classic 1967 book, The Costs of Economic Growth. In addition there is little discussion of growing inequality in Africa and much less discussion of inequality between Africa and the global economy as a whole. Indeed, even within Jerven’s own, narrow framework of technical, data-based analysis of GDP, neither the stagnant contribution of Africa to global GDP nor its implications for society, economy and environment are analysed.

In fact, the real history of GDP says something completely different. There is nothing African about the manipulation of GDP. This political statistic has always been manipulated to win wars, to maintain imperial power, to include and exclude countries from powerful clubs and to distract attention from pressing issues that confront power structures, as Lorenzo Fioramonti discusses in his 2015 book Gross Domestic Problem.

In contrast Jerven seeks a paradigmatic change on the basis that better quality technical power and numbers alone can save economics. The evidence, however, shows that growth – indeed the entire economics establishment – owes its success not to its superiority of ideas or methodology at all. Economics has attained its imperial status not because of strong and rigorous methodology or even its better use of data, but, largely, because it serves an ideological role. It is this ideology that sustains the position of ‘economic science’. As Michel De Vroey famously noted in 1975 ‘in a class society, the ruling class cannot be indifferent to the type of social science developing in the society in which it holds power.’ More recently, John Weeks in his 2014 book, The Economics of the 1% emphasises the materialist nature of measurement and economics.

Conclusion: Get Reading

Jerven’s study, its technical detail, its forthright critique of the flaws of GDP measurement is brilliant, but technical acuteness cannot be fully understood without an analysis of the political economy of measurement or of ideas more generally. Therefore, my recommendation to readers is to immediately get a copy of Jerven’s vital work, study it, but then to read recent books, especially Lorenzo Fioramonti’s, to better contextualise the ‘world’s most powerful number’, and seriously ponder the ecological limits to growth.

Franklin Obeng-Odoom is a Fellow of the Ghana Academy of Arts and Sciences. His books include Oiling the Urban Economy: Land, Labour, Capital, and the State in Sekondi-Takoradi, Ghana and Reconstructing Urban Economics: Towards a Political Economy of the Built Environment. Franklin is based at the University of Technology Sydney, School of Built Environment, Australia (Franklin.Obeng-Odoom@uts.edu.au).

Featured Photograph: Former US Secretary of State Hillary Clinton delivers opening remarks at the 2012 African Growth and Opportunity Act (AGOA) Forum to mark Global Economic Statecraft Day at the U.S. Department of State in Washington on June 14, 2012.

The Fierce Urgency of Now: Africa’s Capitalist Cul-de-Sac

ROAPE

April 18, 2017

By John Smith

Mainstream academia and the liberal media in Europe and North America propound the myth that, however slowly, Africa is ‘rising’ and converging with high-income countries; that capitalist development is lifting millions of Africans out of poverty; and that whatever obstacles African countries face in moving further along this path, they are either internal (poor governance, corruption, conflict etc.) or contingent (temporary ‘headwinds’ resulting from China’s deceleration, volatile commodity prices, ‘natural disasters’ – e.g. Ebola, droughts, desertification etc, whose connection with capitalist plunder of nature is not acknowledged) and have nothing to do with the unjust, exploitative and oppressive nature of their insertion into the global capitalist political economy.

This blogpost argues that these propositions are false; ‘alternative facts’ as distant from the truth as anything emanating from President Trump’s various orifices, even though they are promulgated by the sagest academics and the most respected liberal media. Our responsibility to the peoples of Africa and what Martin Luther King called the fierce urgency of now—the global, systemic crisis inaugurated by the 2008 financial crash is now sucking sub-Saharan Africa and other so-called developing regions into its vortex—don’t allow for mincing of words. Far from promoting development in Africa, capitalism is wrecking the continent; the owners of financial and non-financial transnational corporations based in imperialist countries and governments and international financial institutions under their control are guilty of plunder on a colossal scale and responsible for immense suffering; and the super-rich, westernised capitalist elite with whom they share power, from Pretoria to Rabat, have betrayed their peoples, are unfit to rule, and must be overthrown. This is not extremism, it is a statement of harsh, uncomfortable facts.

The first instalment of this three-part blogpost summarises evidence supporting the first of the above assertions, showing that, during the neoliberal era, African poverty has increasing both absolutely and relative to the income and wealth of the average person in Europe and North America, notwithstanding the much-hyped rise of Africa’s middle class. Future blogposts will examine the role of and relation between Africa’s capitalist elites and their imperialist patrons in producing these negative outcomes, before concluding with a reflection on the need for a return to theories of imperialism and neo-colonialism if the new generation of African youth and international solidarity is to achieve genuine national liberation and sustainable human development in Africa.

Is convergence being attained? Is poverty being overcome?

In her keynote address to the IMF’s ‘Africa Rising’ conference in Mozambique in 2014, IMF Managing Director Christine Lagarde said, “Sub-Saharan Africa is clearly taking off—growing strongly and steadily for nearly two decades and showing a remarkable resilience in the face of the global financial crisis. Economic stability has paid off. More than two-thirds of the countries in the region have enjoyed ten or more years of uninterrupted growth.”[1] This hyperbolic optimism was also evident in the IMF’s April 2015 Regional Economic Outlook a year later: “with growth at 4.5 percent, sub-Saharan Africa will remain among the fastest-growing regions of the world.”[2] Eighteen months later, in its October 2016 Regional Economic Outlook, the IMF struck a much more sombre note: “weighed down by 15 countries where per capita growth will be negative, including the three largest (Angola, Nigeria, and South Africa), the region’s average per capita GDP will contract, by 0.9 percent, for the first time in 22 years… these developments… adversely affect social outcomes, potentially reversing past improvements in living standards for a wide range of the population.”[3]

Yet even this newfound realism contains a generous dose of sophistry. What ‘past improvements’? How wide is the ‘wide range of the population’? Between 1980 and 2000, average per capita GDP in sub-Saharan Africa (SSA) declined by an average of 1.00% per year, according to World Bank data, compared to an average growth of 2.11% in ‘high-income’ countries. During the entire period from 1960 to 2015, per capita GDP in ‘high-income’ countries advanced by an average of 1.78%, but by 0.83% in SSA. This data, of course, takes no account of the grotesque and increasing income inequality in African countries, greater even than in high-income countries, which means that data on average per capita GDP conceals more than it reveals. For example, according to the African Development Bank, in 2010 60% of Africans were surviving on less than two dollars per day, or $730 per annum, yet average per capita GDP stood at $3237. [4]

Lending flimsy support to claims of convergence and of ‘Africa Rising’, between 2000 and 2015, SSA’s per capita GDP grew by an average of 2.25%, compared to 1.30% in rich countries. But, in the same way that rosy cheeks can indicate fever not good health, the high rates of growth experienced by African nations in the half-decades before and after the 2008 crash were less a sign of their own vitality than of the malaise gripping the imperialist economies. Well before the outbreak of the crisis, interest rates in the imperialist centers were already unusually low, causing ‘hot money’ to flow into African and other emerging markets in the quest for higher rates of return. The first years of the new millennium also saw the beginning of the so-called commodities super-cycle, an anomalous decade of rising world prices of oil and of metals, food and other primary commodities, partially reversing their long downward trend. The super-cycle was driven by China’s insatiable demand for raw materials, amplified by the speculative hot money flows mentioned earlier, and was extended for several years beyond the 2007-8 crash by Chinese leaders’ efforts to rescue their economy from its jaws, via an enormous debt-financed infrastructure investment programme, equivalent to 34% of GDP, that saw China pour more concrete in 2011 and 2012 than did the United States in the whole of the 20^th century. [5] As The Economist in 2015 observed, “The credit boom in emerging markets was in large part a response to the credit bust in the rich world. Fearing a depression in its richest export markets, the authorities in China brought about a massive increase in credit in 2009. Meanwhile a flood of capital escaping the paltry yields on offer in developed countries took them to ever more exotic places.” But the wind has changed direction, and “The gush of global capital that flowed into their economies in the six years since the 2008-09 financial crisis is in most countries now either slowing to a trickle or reversing course to find a safer home back in developed economies;” in 2015 SSA’s average per capita GDP grew by 0.27%, compared to 1.15% in the high-income countries, and turned sharply negative (-0.9%, as reported above) in 2016. [6]

There are many reasons to be disdainful of arguments that reduce ‘development’ to economic growth and that measure this by gross domestic product (GDP). Two reasons, in particular, stand out. Data on GDP growth says nothing about how the fruits of this growth are shared: sharply rising inequality implies that those most in need of development get the least of it, and that many are in fact regressing. And GDP has an exceedingly narrow focus: it only measures the monetary value of goods and services that are sold, assuming this to be equal to the wealth generated in their production, and it ignores ‘externalities’, such as pollution, depletion of natural resources and destruction of traditional communities.[7] We therefore make a big concession to capitalism’s apologists by accepting, to begin with at any rate, their criteria for convergence and poverty alleviation, yet we find that, even according to their criteria, capitalist globalisation has not brought any meaningful development for the majority of Africa’s people, and far from convergence, the already-extreme gap between Africa and rich nations is widening, both absolutely and relatively.

These conclusions are greatly reinforced when we move from examining the distribution of income to the distribution of wealth. According to Credit Suisse, in 2000 the median wealth of European adults was 11.2 times greater than the median wealth owned by African adults.[8] By 2016, this ratio had increased to 27.5. Comparison of the median wealth of Africans with North Americans reveals an even starker disparity: the ratio rose from 74.1 in 2000 to 120.3 in 2016. And this dramatic widening of the wealth gap occurred during a period when Africa’s economy was experiencing unprecedented growth! Closer examination reveals that the biggest contribution to the widening wealth gap between the average African and the average European and North American arose from sharply increasing inequality within Africa. It should be recalled that ‘median wealth per adult’ is the wealth owned by the average adult, whereas ‘mean wealth per adult’ is the average wealth owned by adults. If the richest decile of adults increase their wealth and other deciles do not, median wealth remains the same but mean wealth increases. So, if the wealth gap between the average European and the average African nearly tripled between 2000 and 2016, while mean wealth ‘only’ increased by nearly 50%, this means that a large part of the increase in the wealth of Africans during these boom years was captured by the elite. And so Credit Suisse reports (not shown in the table) that the ratio of mean wealth to median wealth in Africa jumped from 7.8 to 10.4 over this period, while this ratio slightly declined in both Europe and North America.

Credit Suisse’s data on wealth distribution brings the deepening inequality between Africa’s super-rich elite and their middle-class hangers-on and the mass of the people on the other into sharp focus, as well as revealing the wide and deepening inequality between the average African person and the average person in the imperialist countries. Unfortunately, World Bank data on income distribution discussed earlier does not make it as easy to unpack average per capita income, but we can be sure that the same effect is taking place here as well. In other words, even during the past one and a half decades of anomalously-high growth across sub-Saharan Africa, the lion’s share of this increased income has been captured by the elite while the wretched poverty of the majority has not improved and, for many if not most, has got worse.

Having established that Africa as a whole is not converging with rich nations, it is diverging, and that extreme poverty is growing, not diminishing, the next blogpost examines the agency of those in charge of Africa’s development—transnational corporations, imperialist governments and International Financial Institutions under their control, and Africa’s capitalist elites; while the final post moves from the criticism of facts to the criticism of concepts, and considers why we need to return to, and critically develop, theories of imperialism if we are to understand why the world is as it is, how it may be changed for the better, and who will be the agents of this change.

John Smith received his PhD from the University of Sheffield and is currently self-employed as a researcher and writer. He has been an oil rig worker, bus driver, and telecommunications engineer, and is a longtime activist in the anti-war and Latin American solidarity movements. Winner of the first Paul A. Baran–Paul M. Sweezy Memorial Award for an original monograph concerned with the political economy of imperialism, John’s Imperialism in the Twenty-First Century is a seminal examination of the relationship between the core capitalist countries and the rest of the world in the age of neoliberal globalization.

Featured Photograph: Valhalla Park, in Cape Town, South Africa. Rising unemployment and the increasing gap between rich and poor is a dominant feature of life across the continent.

Notes

[1] Christine Lagarde, 2014, Africa Rising – Building to the Future, Keynote Address to the African Rising Conference http://www.imf.org/external/np/speeches/2014/052914.htm

[2] IMF, 2015, Regional Economic Outlook Apr 15 Sub-Saharan Africa – Navigating Headwinds, p2

[3] IMF, 2016, Regional Economic Outlook Oct 16 Sub-Saharan Africa – Multispeed Growth p8

[4] John Burn-Murdoch and Steve Bernard, 2014, “The Fragile Middle: millions face poverty as emerging economies slow,” in Financial Times, April 13, 2014. It is often forgotten that the World Bank’s $2 per day benchmark uses PPP-adjusted dollars; accordingly, I have used the PPP-adjusted figure for average per capita GDP.

[5] By way of comparison, Donald Trump’s much-trumpeted debt-financed infrastructure programme, which might take until 2018 to show up, is equivalent to 5% of US GDP.

[6] Kynge, J. and J. Wheatley, 2015a. Emerging Markets: The Great Unravelling. Financial Times, April 1, 2015.

[7] See John Smith, 2012, “The GDP Illusion,” Monthly Review 64/3:86–102. http://monthlyreview.org/2012/07/01/the-gdp-illusion, and chapter 9 of John Smith, 2016, Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis, New York: Monthly Review Press, http://monthlyreview.org/product/imperialism_in_the_twenty-first_century/

[8] ‘Europeans’ includes central Europeans as well as west Europeans; numbering 550 million adults in 2000.

Imperialism in Africa: China’s Widening Role

ROAPE

April 13, 2017

By Lee Wengraf

China’s presence in Africa has grown dramatically in the twenty-first century. Neoliberal privatization and trade agreements opened up investment opportunities not only for the West but also for China, heightening rivalries between the two. China has emerged as a dominant powerhouse in Africa, not only securing drilling and mineral rights across the continent, but cementing political allegiances with African regimes through development projects such as dams, roads and bridges. Chinese leaders have very actively cultivated these relationships with frequent high-profile visits since the start of the African “boom” in the early 2000s. Loans from China to poor countries, mainly in Africa, have surpassed those from the World Bank.

African oil-rich nations have been happy to embrace these alliances, welcoming “infrastructure for oil” deals. African leaders and business elites have sought out this foreign investment while attempting to secure favorable contracts requiring “local content,” that is, compelling manufacturers to invest locally, transfer technology and employ local staff. However, a number of reports describe Chinese companies importing Chinese labor and equipment, conveniently side-stepping “local content” provisions.

With their emphasis on such barter arrangements, the economic and political character of the Chinese projection into Africa differs from that of the U.S. and the former colonial powers. But China is no kinder, gentler imperial option: just like 19^th century colonialists, when the Chinese build roads and schools, the goal is to facilitate resource extraction and build allegiances. Chinese investment and infrastructure-building has reproduced the inequality and exploitation that likewise accompanies imperialism in its Western form.

The scale of China’s economic involvement in Africa has grown enormously in the twenty-first century. Chinese foreign direct investment (FDI) in Africa has been massive, and more than 2,200 Chinese enterprises are currently operating in sub-Saharan Africa, most of them private firms.[1] During the global economic crisis of 2008-2009, Chinese capital successfully sought outlets for investment overseas in the face of a failing domestic market and excess capital, while the European Union (EU) and U.S. floundered.

The U.S. and the former colonial powers of Britain and France together represent approximately two-thirds of the total FDI in Africa, with the value for each country’s stock approximately double that of Chinese companies.[2] However, where the stock of FDI in sub-Saharan Africa from the EU, China, Japan and the U.S. grew by nearly five times between 2001 and 2012, this growth was primarily driven by China: FDI from China outstripped that from the U.S. by 53 percent compared to 14 percent.[3]

South Africa has received the bulk of Chinese investment, approximately one-third of the investment total.[4] Other prominent areas for Chinese FDI include Nigeria, Sudan, and Zambia, while its reach encompasses most of the continent. Oil and mining have captured the bulk of Chinese investment, but as with Western FDI, there has been movement into the financial services, construction, and manufacturing sectors, including technology, media and telecommunications.[5] Howard French, author of China’s Second Continent, suggests that rising labour costs and ecological concerns in China have pushed light manufacturing to turn to Africa.

From Kenya’s Thika Superhighway to a new $200 million African Union headquarters in Addis Ababa, Ethiopia, infrastructure-building has been a high-profile component of deepening Chinese involvement in Africa. Two-thirds of Africa’s infrastructure has been funded by China. Chinese leader Xi Jinping committed to a new round of loans and aid totaling $60 billion in 2015, with a large portion of the funds directed at South African infrastructure, Zimbabwean projects and other initiatives. Xi also announced drought relief for the continent. All told, if Chinese pledges materialize, $1 trillion in project funding will arrive in African countries by 2025.[6]

Trade between Africa and the rest of the world has increased by 200% since 2000. China surpassed American trade with Africa in 2009 to become Africa’s single largest trading partner. Europe’s share of total trade with Africa fell by approximately one-quarter during the millennium’s first decade, while China’s share increased by approximately 40%. As described by the World Bank, “One-third of China’s energy imports come from SSA, a vital trade link, especially as energy consumption rates in China have grown by more than twice the global average over the past 10 years.”[7]

Yet, they continue, despite the deeper “involvement” of China, industrialization has failed to advance in much of Africa. Tunde Oyateru has pointed out, despite the relative growth of FDI into Africa, within the wider global economy, the bulk of investment flows largely bypass the continent altogether, remaining concentrated between the advanced economies. Africa thus represents “one percent and 3.4 percent of the total percentage of FDI by the US and China respectively; numbers that barely constitute a skip let alone a scramble for Africa.”[8]

China’s involvement has generated hypocritical hand-wringing from Western investors who claimed that China’s loans to Africa would pave the way for economic crisis down the road. The Financial Times commented at the height of the boom that China’s operations in Africa, “draws comparisons with Africa’s past relationship with European colonial powers, which exploited the continent’s natural resources but failed to encourage more labor-intensive industry.”[9] Yet missing from such comments are a reality check on the central role that Western colonialism and structural adjustment have themselves played in that deindustrialization process that set the stage for a renewed round of debt and crisis.

Intensified competition in the present era has driven a new militarization on the part of both the U.S. and China. China’s priorities reflect both concerns over investments, but also a wider interest in projecting its own preeminence. In the decade up to 2014, China’s official military budget grew an average of 9.5 percent per year.[10] In fact, China’s infrastructure investment can be partly understood as a precursor to a military footprint on the continent. As reported by The New York Times:

China announced [in late 2015] that it would establish its first overseas military outpost and unveiled a sweeping plan to reorganize its military into a more agile force capable of projecting power abroad. The outpost, in the East African nation of Djibouti, breaks with Beijing’s longstanding policy against emulating the United States in building military facilities abroad. The Foreign Ministry refrained from describing the new installation as a military base, saying it would be used to resupply Chinese Navy ships that have been participating in United Nations antipiracy missions. Yet by establishing an outpost in the Horn of Africa — more than 4,800 miles away from Beijing and near some of the world’s most volatile regions — President Xi Jinping is leading the military beyond its historical focus on protecting the nation’s borders.[11]

As J. Peter Pham of the Africa Center at the Atlantic Council commented, “U.S. global leadership is predicated heavily on the U.S. role in protecting and to an extent controlling sea lanes of communication. If China establishes itself as a fellow protector of the global commons, then it certainly increases its stature.”[12]

The foundation for this decisive turn was laid in the preceding decade, with smaller scale operations marking China’s widening military presence. Francis Njubi Nesbitt writes that “China has also participated in peacekeeping operations, anti-piracy campaigns, and post-war reconstruction efforts around the continent…. It is the third-largest exporter of conventional and small arms to Africa after Germany and Russia. China also provides training for military officers and maintains military-military exchanges with a reported twenty-five African countries.”[13]

The rise of China in Africa has heightened militarization by the U.S., with major increases by the previous Obama administration for arms sales and military training in African countries. Meanwhile, when commodity prices crashed worldwide in early 2016, China announced that imports from Africa had fallen by a full 40 percent and currencies in the two largest economies, Nigeria and South Africa, plummeted to their lowest levels ever. These falls have created a new round of crises for African nations needing to repay Chinese infrastructure loans, an outcome of the precarious nature of Africa’s resource-driven growth. With the very real danger of economic downturn, an arms race on the African continent is an ominous sign of volatility ahead.

Lee Wengraf writes on Africa for the International Socialist Review, Counterpunch, Pambazuka News and AllAfrica.com. Her new book Extracting Profit: Neoliberalism, Imperialism and the New Scramble for Africa will be published by Haymarket in 2018.

Featured Photograph: Kofi Annan, Africa Progress Panel, Monhla Hlahla, Industrial Development Corporation of South Africa, and Gao Xiqing, China Investment Corporation, at the Africa in the World Economy, Addis Ababa, Ethiopia, 9-11 May, 2012.

Notes

[1] Miria Pigato and Wenxia Tang, China and Africa: Expanding Economic Ties in an Evolving Global Context, World Bank Publication, March 2015, p. 1.

[2] Biodun Olamosu, “Africa rising? The economic history of sub-Saharan Africa,” International Socialism, Issue 146, April 12, 2015. See also United Nations Conference on Trade and Development, World Investment Report 2016, p. 38. http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf

[3] African Economic Outlook 2015: Reginal Development and Spatial Inclusion, http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2015/PDF_Chapters/Overview_AEO2015_EN-web.pdf

[4] EY Attractiveness Survey Africa 2015, p. 20

[5] EY Attractiveness Survey Africa 2015, p. 20.

[6] Jeremy Frost, “China inks $6.5bn worth of deals with South Africa,” International Business Times, December 4, 2015

[7] Miria Pigato and Wenxia Tang, China and Africa: Expanding Economic Ties in an Evolving Global Context, World Bank Publication, March 2015, http://www.worldbank.org/content/dam/Worldbank/Event/Africa/Investing%20in%20Africa%20Forum/2015/investing-in-africa-forum-china-and-africa-expanding-economic-ties-in-an-evolving-global-context.pdf, p. 1

[8] Tundé Oyateru, “Africa: The Scramble for Africa – A Continuing Narrative,” AllAfrica, February 12, 2015

[9] William Wallis and Geoff Dyer, “Wen calls for more access for Africa,” Financial Times, May 16, 2007.

[11] Jane Perlez and Chris Buckley, “China Retools Its Military With a First Overseas Outpost in Djibouti,” The New York Times, November 26, 2015

[12] Kristina Wong, “China’s military makes move into Africa,” The Hill, November 24, 2015

[13] Francis Njubi Nesbitt, “America vs China in Africa,” Foreign Policy in Focus, December 1, 2011

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