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Looting Africa: The Economics of Exploitation

Looting Africa: The Economics of Exploitation

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by Patrick Bond

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Despite the rhetoric, the people of Sub-Saharan Africa are become poorer. From Tony Blair's Africa Commission and the Make Poverty History campaign to the Hong Kong WTO meeting, Africa's gains have been mainly limited to public relations. The central problems remain exploitative debt and financial relationships with the North, phantom aid, unfair trade, distorted


Despite the rhetoric, the people of Sub-Saharan Africa are become poorer. From Tony Blair's Africa Commission and the Make Poverty History campaign to the Hong Kong WTO meeting, Africa's gains have been mainly limited to public relations. The central problems remain exploitative debt and financial relationships with the North, phantom aid, unfair trade, distorted investment and the continent's brain/skills drain. Moreover, capitalism in most African countries has witnessed the emergence of excessively powerful ruling elites with incomes derived from financial-parasitical accumulation. Without overstressing the 'mistakes' of such elites, this book contextualises Africa's wealth outflow within a stagnant but volatile world economy.

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Looting Africa

The Economics of Exploitation

By Patrick Bond

Zed Books Ltd

Copyright © 2006 Patrick Bond
All rights reserved.
ISBN: 978-1-84813-071-5


Poor Africa

Two views

Africa is poor, ultimately, because its economy has not grown. The public and private sectors need to work together to create a climate which unleashes the entrepreneurship of the peoples of Africa, generates employment and encourages individuals and firms, domestic and foreign, to invest. Changes in governance are needed to make the investment climate stronger. The developed world must support the African Union's New Partnership for Africa's Development (NEPAD) programme to build public/private partnerships in order to create a stronger climate for growth, investment and jobs.

These sentences — from the report presented in March 2005 by Tony Blair's Commission for Africa — distil the misperceptions of conventional wisdom regarding the continent's underdevelopment. In the same year Blair hosted the G8 and the European Union leaders' summits, and his Chancellor of the Exchequer Gordon Brown advanced several initiatives on debt, aid and trade, deploying 'Marshall Plan for Africa' rhetoric. Below, we consider the way the Africa Commission coopted key African elites into a modified neoliberal — free-market — project. But to set the tone on this first page, it would be more logical to reverse all of the above admonitions, and reconstruct the paragraph as follows.

Africa is poor, ultimately, because its economy and society have been ravaged by international capital as well as by local elites who are often propped up by foreign powers. The public and private sectors have worked together to drain the continent of resources which otherwise — if harnessed and shared fairly — should meet the needs of the peoples of Africa. Changes in 'governance' — revolutions, for example — are desperately needed for social progress, and these entail not only the empowerment of 'civil society' but also the strengthening of those agencies within African states which can deliver welfare and basic infrastructure. The rich world must decide whether to support the African Union's NEPAD programme, which will worsen the resource drain because of its pro-corporate orientation, or instead to give Africa space for societies to build public/people partnerships in order to satisfy unmet basic needs.

One reason to make this argument forcefully at the outset is to remind ourselves of the historical legacy of a continent looted: trade by force dating back centuries; slavery that uprooted and dispossessed around 12 million Africans; land grabs; vicious taxation schemes; precious metals spirited away; the appropriation of antiquities to the British Museum and other trophy rooms; the nineteenth-century emergence of racist ideologies to justify colonialism; the 1884-5 carve-up of Africa, in a Berlin negotiating room, into dysfunctional territories; the construction of settler-colonial and extractive-colonial systems — of which apartheid, the German occupation of Namibia, the Portuguese colonies and King Leopold's Belgian Congo were perhaps only the most blatant — often based upon tearing black migrant workers from rural areas (leaving women with vastly increased responsibilities as a consequence); Cold War battlegrounds - proxies for US/USSR conflicts — filled with millions of corpses; other wars catalysed by mineral searches and offshoot violence such as witnessed in blood diamonds and coltan (colombo-tantelite, a crucial component of cell phones and computer chips); poacher-stripped swathes of East, Central and Southern Africa now devoid of rhinos and elephants whose ivory became ornamental material or aphrodisiac in the Middle East and East Asia; societies used as guinea pigs in the latest corporate pharmaceutical test ... and the list could continue.

Today, Africa is still getting progressively poorer, with per capita incomes in many countries below those of the I950s-60s era of independence. If we consider even the most banal measure of poverty, most sub-Saharan African countries suffered an increase in the percentage of people with income of less than US$1/day during the 1980s and 1990s, the World Bank itself concedes. Later we consider even more worrying evidence (also from the Bank) regarding the depletion of Africa's raw materials, and the implications for the continent's declining net national income and savings.

Yet the worsening statistics led to different kinds of spin. Emblematic of the power-elite view (even if published in the ostensibly progressive US magazine The Nation), was Andrew Rice's review of new books on Africa by Martin Meredith, Robert Guest and Jeffrey Sachs:

How can one continent be so out of step with humankind's march of progress? Everyone agrees that Africans are desperately poor and typically endure governments that are, to varying degrees, corrupt and capricious. The dispute is about causes and consequences. One group — call it the poverty-first camp — believes African governments are so lousy precisely because their countries are so poor. The other group — the governance-first camp — holds that Africans are impoverished because their rulers keep them that way.

Sachs isn't actually so crude, since 'Little surpasses the Western world in the cruelty and depredations that it has long imposed on Africa.' But he presumes that the critique of corrupt dictators is a 'political story line' of the 'right', instead of giving credence to progressive, organic African anti-corruption campaigning. From there, Sachs proceeds to rehearse well-known accounts of malaria, AIDS, landlocked countries and other forms of geographically determinist analysis, and then reconciles these explanations with garden-variety policy advice: adopting good governance plus 'implementing traditional market reforms, especially regarding export promotion'. For Sachs, virtually none of the critical structural analyses in this book are worthy of more than a paragraph's lip service.

There will be time later to question the supposed 'march of progress' (in Chapter 2), and the merits of 'traditional market reforms' (in Chapters 3-4). But another view entirely — namely, that African rulers keep their people poor because they are tied into a system of global power, accumulation and class struggle — is what seems to have gone missing, especially when well-meaning NGOs and charity proponents seek yet more African integration into imperial circuits of trade, aid, finance and investment, citing state corruption as the major impediment to this cure-all. Northern academics provide a more sophisticated version of the argument, known as the theory of African patrimonialism, namely rule through personal patronage rather than ideology or law, based upon relationships of loyalty and dependence with a blurred distinction between private and public interests.

In fact, the deeper global power relations that keep Africa down (and, simultaneously, African elites buoyed up) should have been obvious to the world in 2005, a year during which numerous events were lined up ostensibly to help liberate Africa from poverty and powerlessness:

• the mobilization of NGO-driven citizens' campaigns like Britain's Make Poverty History and the Johannesburg-based Global Call to Action against Poverty (throughout 2005);

• Tony Blair's Commission for Africa (February);

• the main creditor countries' debt relief proposal (June);

• a tour of Africa by the new World Bank president Paul Wolfowitz (June);

• the G8 Gleneagles debt and aid commitments (July);

• the Live 8 consciouness-raising concerts (July);

• the UN Millennium Development Goals review (September);

• the return to Nigeria of monies looted by Sani Abacha and deposited in Swiss bank accounts (September);

• the IMF/World Bank annual meeting addressing debt and Third World 'voice' (September);

• a large debt relief package for Nigeria (October); and

• the deal done at the World Trade Organization's ministerial summit in Hong Kong (December).

There are many different dynamics associated with these mainly top-down processes, and in retrospect it is appropriate to ask the question: what was really accomplished? This book argues that for those seeking genuine information about Africa's situation, the events above were useful mainly in so far as they revealed global-elite hypocrisy and power relations that remained impervious to advocacy, solidarity and democratization. The events also revealed the limits of strategies aimed at intra-elite persuasion rather than pressure. Tragically, the actual conditions faced by most people on the continent continued to deteriorate.

But this is not the impression that world elites and African rulers would like to leave. In September 2005, the outgoing chair of the IMF and World Bank Development Committee (one of two crucial standing bodies of the Bretton Woods institutions), South African Finance Minister Trevor Manuel, bragged: 'Right now, the macroeconomic conditions in Africa have never been better. You have growth across the continent at 4.7 per cent. You have inflation in single digits. The bulk of countries have very strong fiscal balances as well.' As for Gleneagles, Live 8 organizer Bob Geldof was ecstatic: 'On aid, 10 out of 10. On debt, eight out of 10. On trade ... it is quite clear that this summit, uniquely, decided that enforced liberalization must no longer take place. That is a serious, excellent result on trade.'

Upon closer examination, Geldof appears to have been profoundly and dangerously misguided (as many of his NGO allies warned him). Manuel's statements are true only if we take misleadingly narrow economic statistics seriously. But we don't have to: even the World Bank was compelled to confess in mid-2005 that Africa is being continually drained of wealth through depletion of minerals, forests and other eco-social factors ignored by Manuel and mainstream economists (a point we return to in detail below).


Many critics of North-South power relations — such as Walter Rodney in How Europe Underdeveloped Africa — have already identified the basic processes:

The question as to who and what is responsible for African underdevelopment can be answered at two levels. Firstly, the answer is that the operation of the imperialist system bears major responsibility for African economic retardation by draining African wealth and by making it impossible to develop more rapidly the resources of the continent. Secondly, one has to deal with those who manipulate the system and those who are either agents or unwitting accomplices of the said system.

Rodney's research showed how sub-Saharan Africa suffered a drain of wealth along two trajectories: South-North resource flows associated with what we now term 'global apartheid', and adverse internal African class formation which reproduces global apartheid's local agents ('compradors'). In the former case, the central processes are associated with exploitative debt and finance, phantom aid, capital flight, the brain drain, unfair trade, distorted investment and the ecological debt the North owes the South, in the context of profoundly undemocratic global power relations. As Rodney put it in 1972,

In order to understand present economic conditions in Africa, one needs to know why it is that Africa has realized so little of its natural potential, and one also needs to know why so much of its present wealth goes to non-Africans who reside for the most part outside of the continent. ...

It is typical of underdeveloped economies that they do not (or are not allowed to) concentrate on those sectors of the economy which in turn will generate growth and raise production to a new level altogether, and there are very few ties between one sector and another so that (say) agriculture and industry could react beneficially on each other. Furthermore, whatever savings are made within the economy are mainly sent abroad or are frittered away in consumption rather than being redirected to productive purposes. Much of the national income which remains within the country goes to pay individuals who are not directly involved in producing wealth but only in rendering auxiliary services — civil servants, merchants, soldiers, entertainers, etc. What aggravates the situation is that more people are employed in those jobs than are really necessary to give efficient service; and to crown it all these people do not reinvest in agriculture or industry. They squander the wealth created by the peasants and workers by purchasing cars, whisky and perfume. (Emphasis in original.)

There are indeed African collaborators who require mention and critique (Chapter 5). Instead of an organic middle class and productive capitalist class, Africa has seen an excessively powerful comprador ruling elite whose income has been based upon financial-parasitical accumulation, which in turn is subject to vast capital flight. The case of South Africa as a national 'subimperial' site of geopolitical, military, financial, trade and investment power deserves special consideration (Chapter 6).

In turn, this means that not just poverty but also inequality must be central to the analysis, for Africa hosts some of the world's worst cases. The most common measure of income inequality is the 'Gini coefficient', a number between O (everyone has the same income) and 1 (one person has all the income and everyone else has nothing). The following countries exceed a 0.50 Gini score, placing them at the very top of the world's ranking: Namibia, Botswana, the Central African Republic, Swaziland, Lesotho, South Africa, Zambia, Malawi, The Gambia and Zimbabwe.

The processes discussed above are also intensely gendered. Women are the main victims of systemic poverty and inequality, whether in productive circuits of capital (increasingly subject to sweatshop conditions) or in the 'sphere of reproduction' of households and labour markets, where much primitive accumulation occurs through unequal gender power relations. This is especially evident in areas such as Southern Africa, which are characterized by more than a century of migrant labour flows. Indeed, the sphere of reproduction remains central to Northern capitalism's social power over the South, particularly in the case of migrancy. Here, the superexploitation of women in childrearing, healthcare and eldercare contrasts with wealthy countries' state-supplied (or firm-based) schooling, medical aids and pension schemes.

This is not simply a local problem, but corresponds to worsening global trends. Political scientists Isabella Bakker and Stephen Gill show how

Reprivatization of social reproduction involves at least four shifts that relate to the household, the state and social institutions, and finally the basic mechanisms of livelihood, particularly in poorer countries:

• household and caring activities are increasingly provided through the market and are thus exposed to the movement of money; ...

• societies seem to become redefined as collections of individuals (or at best collections of families), particularly when the state retreats from universal social protection; .

• accumulation patterns [are] premised on connected control over wider areas of social life and thus the provisions for social reproduction; ... and

• survival and livelihood [are threatened]. For example, a large proportion of the world's population has no effective health insurance or even basic care.

The denial of Africans' access to food, medicines, energy and even water is a common reflection of this last problem, as people who are surplus to capitalism's labour power requirements find that they had better fend for themselves — or simply die. In even relatively prosperous South Africa, an early death for millions was the outcome of state and employer reaction to the AIDS epidemic, with cost-benefit analyses demonstrating conclusively that keeping most of the country's five to six million HIV-positive people alive through patented medicines cost more than the people were 'worth'. There are many ways, as Dzodzi Tsikata and Joanna Kerr have shown, in which mainstream economic policy 'perpetuates women's subordination'.

The same principles have been applied to the environment. After all, 'I've always thought that underpopulated countries in Africa are vastly under-polluted, their air quality is probably vastly inefficiently low,' opined Larry Summers, then the World Bank's chief economist, later the Clinton administration's Treasury Secretary and later president of Harvard, in the wake of a similar off-the-cuff cost-benefit analysis: 'I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that.' Though this is an extreme version, precisely such combined anthropomorphic and racist logic permeates the way Africa is treated in global political-economic circuits.


Excerpted from Looting Africa by Patrick Bond. Copyright © 2006 Patrick Bond. Excerpted by permission of Zed Books Ltd.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Patrick Bond, a political economist, is research professor at the University of KwaZulu-Natal School of Development Studies in Durban where he directs the Centre for Civil Society (http://www.ukzn.ac.za/ccs). He is also visiting professor at York University Department of Political Science in Toronto and Gyeongsang National University Institute of Social Sciences in South Korea. He previously taught at the University of the Witwatersrand Graduate School of Public and Development Management, Yokohama National University Department of Economics and the Johns Hopkins University School of Public Health.
Patrick Bond, a political economist, is research professor at the University of KwaZulu-Natal School of Development Studies in Durban where he directs the Centre for Civil Society (http://www.ukzn.ac.za/ccs). He is also visiting professor at York University Department of Political Science in Toronto and Gyeongsang National University Institute of Social Sciences in South Korea. He previously taught at the University of the Witwatersrand Graduate School of Public and Development Management, Yokohama National University Department of Economics and the Johns Hopkins University School of Public Health. Bond''s other recent books include Talk Left, Walk Right: South Africa's Frustrated Global Reforms (published by Africa World Press and University of KwaZulu-Natal Press, 2006); Trouble in the Air: Global Warming and the Privatised Atmosphere (edited with Rehana Dada, published by the CCS and the Transnational Institute, 2005); Elite Transition: From Apartheid to Neoliberalism in South Africa (UKZN Press, 2005); Fanon's Warning: A Civil Society Reader on the New Partnership for Africa's Development (Africa World Press and CCS, 2005); and Against Global Apartheid: South Africa meets the World Bank, IMF and International Finance (Zed Books and University of Cape Town Press, 2003). He was born in Belfast, Northern Ireland in 1961.

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Looting Africa: The Economics of Exploitation 4.5 out of 5 based on 0 ratings. 2 reviews.
Anonymous More than 1 year ago
She read a book.
Guest More than 1 year ago
In 2005 the World Bank admitted that Africa is drained of wealth, through debt, phantom aid, capital flight, brain drain, unfair trade, export of primary products, and distorted investment. From 1980 to 2002, sub-Saharan Africa¿s debt rose from $61 billon to $206 billion, while it paid $255 billion in interest. Between 1970 and 1996, it also lost $285 billion in capital flight. In 2000, 80% of Africa¿s exports were its nations¿ resources, compared to 31% for all developing countries. If nations stay stuck in the exporting commodities trap, they will not be able to develop industries and become self-reliant. Bond shows how the EU loots Africa. The European Commission admitted that 70% of the EU¿s aid-for-trade programme was `support for the private sector¿. The EU imposes trade liberalisation and privatisation, stripping Africa of what little industry it has. Trade liberalisation has cost sub-Saharan Africa $272 billion since 1986, because local producers now sell less than they did before trade was liberalised. In 2005, the G8 wrote off about 1% of Third world debt, $40 billion. Third world debt, $580 billion in 1980, had soared to $2.4 trillion in 2002. Since 1980, the Third World¿s working classes have paid $4.6 trillion - the equivalent of 50 Marshall Plans - to the First World¿s capitalists. Labour migration is another key resource loss. 20,000 skilled workers leave Africa every year. Bond shows that the remittances sent home do not compensate for the loss of the skilled labour. Yet he then writes, ¿The progressive position on migration has always been to maintain support for the `globalization of people¿ (while opposing the `globalization of capital¿) and in the process to oppose border controls and arduous immigration restrictions.¿ This position is self-contradictory, both supporting and opposing `globalization¿, i.e. capitalism. Further, the evidence shows that unlimited migration weakens the working classes in the countries that lose the skilled labour and in the countries that receive it. But for Bond, the facts are less important than maintaining the traditional `progressive¿ position. What is Bond¿s solution? He approvingly cites a vast array of NGOs, charities, campaigns, initiatives, solidarity groups, web resources, networks, forums and projects ¿ which are splinter groups of activists, all single-issue, all tunnel-vision. These are a mirror image of the ruling class¿s institutions ¿ IMF, World Bank, World Trade Organization, G8 Summits and World Summits (18 between 2001 and 2005). The ultra-left, like the ruling class, focuses on internationalism, turning away from the hard work of developing class struggles for national sovereignty and progress.