“Africa is poor because she is rich”
Brian Ashley - Amandla
Presentation to the Crisis of Civilisation Seminar, August 16 Asuncion, Paraguay, for GRAP
1. What crisis and who decides when a crisis is a crisis:
So when is a crisis a crisis?
I recently travelled in Europe and unlike SA where there is the amplified silence of no discussion on the crisis, the European press and media is full of the crisis, but when walking the streets of their city centres, you experience the highest stage of capitalist consumption. No signs of unemployment and poverty, no signs of the crisis. Yet we know it is there and not just amongst the immigrants, legal and illegal that live there, and not just among the differently coloured.
The paradox is in SA, the most unequal country in the world and the most industrialised and richest economy in Africa, (and of what I say for SA is many times worse for other parts of Africa) we experience the crisis of everyday life. The struggle to survive with 40% unemployment, 50% of the population living below the poverty line, the crisis of 25% of your population living with HIV/AIDS. For the vast majority, I mean 70 – 80% of the population they have been living a social crisis for the last 16 years and of course, longer under apartheid.
So what crisis are we talking about?
For many in Africa when you talk of crisis they can imagine that you refer to the crisis of underdevelopment, poverty, HIV/AIDS, malnutrition, healthcare, education, water, food etc.
So we could be discussing
-
The crisis of HIV and AIDS where Sub-Saharan Africa is more heavily affected by HIV and AIDS than any other region of the world. An estimated 22.4 million people are living with HIV in the region - around two thirds of the global total. In 2008 around 1.4 million people died from AIDS in sub-Saharan Africa and 1.9 million people became infected with HIV. Since the beginning of the epidemic more than 14 million children have lost one or both parents to HIV/AIDS.
-
The fact that about 20% of Africa's children die before the age of five! And the African infant-mortality rates were 107 per 1,000 live births in 1999, compared to 32 for Latin America. Life expectancy at birth for Sub Saharan Africa now stands at 46 years, 52 for Africa, compared with 71 for Latin America. 43 per cent of the region’s population are classified as undernourished.
-
The dramatic collapse of income and increase in poverty where in 1975, the regional GNP per capita of Sub-Saharan Africa stood at 17.6 per cent of ‘world’ per capita GNP; by 1999 it had dropped to 10.5 per cent. Currently it is estimated at just 8%.
-
Or that 78% of the workforce in non-agricultural production is informal.
-
Or that for every dollar in aid, it is conservatively estimated that more than 5 flows out of the country
Over the last quarter of a century, the African crisis of the late 1970s has been transformed into what has aptly been called the ‘African Tragedy’.
Taken together we have to acknowledge that the African tragedy, a crisis of multiple dimensions is not new and has been acute long before the current global crisis. While many people refer to the multi-dimensional global crisis as a crisis of civilisation, it is clear that the crisis of western civilisation is killing what remains of African civilisation just like it did in an earlier era with the civilisations of the INCAS and Aztecs.
2. Africa
Now it is hardly possible to make a presentation on the impact of the global or financial crisis in Africa, that is anything more than schematic and general. Africa is a huge and diverse continent with very different histories. Africa was colonized not by just Spain or Portugal but, the Dutch, Britain, France, Belgium, Germany, Italy and Portugal. By the time the scramble for Africa was over some 10,000 polities were amalgamated into 40 European colonies and protectorates as land and peoples became little more than pieces on a chessboard. Allow me to quote from Britain’s Prime Minister Lord Salisbury at the time of the scramble of Africa, “We have been giving away mountains and rivers and lakes to each other, only hindered by the small impediment that we never knew exactly where they were.”
Following independence and including island states Africa consists now of 54 sovereign states, of which 33 are classified Least Developed Countries.
North Africa is more integrated into Europe with strong linkages to the Middle East through its large Arab population. The five regions of Africa, namely North, South, East, West and Central Africa have different histories of colonialism and the struggle for independence, different languages, religions etc.
There are important regional formations such as the Southern Africa Development Community, Economic Community of West African States (ECOWAS), East African Community, etc. that have distinct relations with their former colonial powers and somewhat differently integrated into the global economy. This has a bearing on their capacity to develop economic relations between these sub-regions and ensure greater inter-regional trade within Africa
Even though 33 of the 50 classified Least Developing Countries – LDcs are in Africa they are not homogenous, even in their economies. Some are landlocked, others have some level of manufacturing industries and others have very small populations. All of these have a major bearing on their economic prospects and of course how the global economic crisis has impacted on them.
Then there are more industrialized economies such as SA, Egypt, Tunisia, Algeria which have features of middle income countries – especially in the case of SA. South Africa accounts for 44 percent of the total GDP of all sub-Saharan Africa, and 52 percent of its industrial output. In fact, SA, mostly to do with the evolution of the mining industry has the 12th biggest financial market in the world.
Nevertheless there are some important common features that we shall focus on when we talk of Africa and the crisis:
John Saul and Colin Leys sum up an extremely critical feature of the greater Africa when they point out:
If we define sub-Saharan Africa as excluding not only north Africa but also bracket off, for the moment, the continent's southern cone, dominated by South Africa, the key fact about the rest—the greater part of the continent—is thrown sharply into relief: after 80 years of colonial rule and almost five decades of independence, in most of it there is some capital but not a lot of capitalism. Africa south of the Sahara exists in a capitalist world, which marks and constrains the lives of its inhabitants at every turn, but is not of it. Whereas Naomi Klein speaks of disaster capitalism to characterize current capitalist dynamics Africa’s experience with capitalism can be best described as an ever intensifying plunder capitalism.
-
More than 70 percent of Africans depend on subsistence agriculture to provide some food, employment and a cultural existence. The vast majority of land in the African countryside, through the colonial period and up until today, has been governed according to local communities’ customary land practices. This is now changing through the new scramble for Africa through corporate and foreign government Land Grabbing
-
The majority of African countries are highly dependent on production and exports of primary commodities, such as coffee, copper, diamonds, fruit, etc. Clothing and textiles accounted for 70% of manufactured exports from Africa. Changes in the global trade regime, rapid liberalisation, changes in technology and increased competition from China has seen a process of deindustrialisation from the 1980s through to current period, with a brief interruption between 2002 – 2006.
-
Although Africa accounts for 1bn people (15% of worlds population) its share of world trade is just 1% and has been steadily declining. Their share of trade in manufacturing goods is even less.
-
Their low weight in international trade, their structural weakness and heavy dependence on foreign trade and finance make them extremely vulnerable to external shocks. Their manufacturing sector is in particular vulnerable not only because of its infancy, but also because of its reliance on the primary sector for the provision of foreign exchange and sources of income. So in SA, the most industrialised and biggest economy in Africa, at the height of the crisis, manufacturing declined by - 21,8%; 22,1%; 10,9% in three successive quarters.
-
Dependent on import of intermediary and capital goods necessary to industrialise; provide low and unstable sources of the income and foreign exchange necessary for investment and industrialization. The average per capita income of African LDCs in 2006 was US $339. 22 African countries have per capita income of less than $266. When you exclude household consumption 18 countries have per capita income of just US $50, available to finance government expenditure for public administration, social services and investment as well as repayments of debts!
-
In spite of most African countries being subsistence agricultural economies they are net food importing countries. At the time of decolonisation in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter. Its exports averaged 1.3 million tonnes a year between 1966-70. But today, the continent imports 25 per cent of its food, with almost every country being a net food importer. SA recently joined the club of net food importers thanks to the working of free trade.
-
More than 70 percent of Africans depend on subsistence agriculture to make a living. Yet agriculture is one of the most neglected sectors in terms of aid and investment. Climate change is making the conditions under which agriculture is practiced more and more uncertain. Drought and other extreme weather events are producing famine and forced migration.
-
As a result of the above revenue base of African countries very weak. Dependent of foreign aid and budgetary support. The continuing debt crisis which ensures that Africa remains a net exporter of capital: for every dollar in aid at least $5 are exported back to the North, African countries face large current account deficit and balance of payment problems, which are mostly financed through foreign aid.
Global crisis
-
Current economic crisis is comparable in scale and in level of disruption to the real economy to the Great depression of 1929. It will endure for at least the next 5 years and possibly the decade.
-
Multi-dimensional and systemic: ecological, economic, food and energy are reinforcing crises that make it intractable. Endless growth, comes up against the finite resources of our planet. Capitalism is destroying the biosperes on which all species have to survive. Not just in terms of climate but in the destruction of our water resources, soils, forests, etc.
-
Crisis of the neoliberal mode of capitalism, which was an outcome of the earlier attempt to resolve the crisis of overproduction and accumulation the late 1960 and 70s.
-
Globalisation and financialisation of the economy were attempts to overcome the limits and blockages to accumulation.
-
The crisis has deepened by eroding demand;
-
Creating financial instability with ever frequent bubbles and busts;
-
Extension of credit and the growth of new financial instruments to offset the demand crisis directly led to current financial crisis flowing from the USA
-
-
Crisis of the global system of civilisational dimensions, including social, cultural and ideological/organisational. The immediate impact has to disorganise, demoralise the dispossessed classes and other layers of the oppressed. – The subjective crisis.
Global Crisis and Africa
What I present is quite schematic and general much more research required to provide fuller understanding.
Current social and economic crisis in Africa is an outcome of the way Africa was integrated into the global economy as a result of colonialism but intensified through structural adjustment transmitted through the debt crisis. This crisis has been further exacerbated through trade liberalisation via World Trade Organisation and regional trade agreements, especially now the proposed European Partnership Agreements.
Growth in Africa’s economic activities during 2002 – 2006 brought about through the rise in commodity prices spurred on by particularly the Chinese’s economy’s hunger for raw materials.
This was the situation in which the global crisis came to have an impact in Africa, i.e. not through financial system and through the exposure to toxic assets. Africa had very minimum exposure, only SA, Egypt, Morocco and Algeria.
Africa, because of its open economy and extreme weak institutions is very vulnerable to external shocks like the global crisis and has little capacity to offset it. Does not have the resources to implement “counter cyclical measures” aimed to stimulate demand and internal production. For example, the rate of investment in Sub- Saharan Africa is expected to decline by 12%.
Global crisis was transmitted through:
-
Collapse of commodity prices:
But not food to same extent. Although food prices did come down from the speculative hights of 2007/8 it never declined at the same rate as minerals and other primary commodities produced in Africa
-
Collapse of demand for raw materials as global economy went into recession. Growth on the African continent dropped to an average of 1.6 percent in 2009, compared to 4.5 percent in 2008.
-
Loss of foreign aid
-
Loss of remittances: In majority of African countries remittances is equal to 50% of export value. Loss cuts internal demand especially for weak nmanufacturing sector. Eg equivalent to 52% of exports for Senegal, 45% of Lesotho! And equal to 27% of GDP for Lesotho
-
Trade financing: loss of access to credit lines of international banks
-
Increasing servicing of foreign debt through currency devaluation
-
Severe current account deficit from US$ 5 billion to US% $31bn
-
A number of infrastructural projects, roads, bridges, dams etc. stopped
Social impact
Social Impact
For example SA lost 1 mn. jobs. in 2009 and a further 235,000 jobs in first 6 month of 2010. Growth in women and youth unemployment.
The AU’s current figures indicate that the proportion of people living in extreme poverty, using the new 1.25 dollars per day poverty line, is 51 percent in sub-Saharan Africa and three percent in North Africa.
Increased hunger and malnutrition both because of increased input costs for subsistence farmers and higher food prices because of devaluation.
Even further cuts in social services like health, education and increased pressure for privatisation because of budget cuts.
Increased burden of women to provide basic care services. Young girls are the first to be withdrawn from schooling to deal with increased burden.
Africa will not achieve MDGs
Politically
Authoritarianism by the state: rise in homophobia Uganda, Malawi, Zimbabwe, xenophobia, Rwanda elections.
Warlordism and the collapse of the state.
When warlordism is not the path chosen by Africa’s elites and their governments then in desperation to earn foreign currency they sell the country – and not necessary to the highest bidder. This by signing on to disastrous trade agreements such as the EPAs
Or through facilitating a new wave of land occupation through selling vast tracks of land mostly for agrofuels and agricultural production. Not just Europe and the USA but as well as other China, Brazil, Russia and of course SA.
Ethiopia is one of the main targets in the current global farmland grab. The government has stated publicly that it wants to sell off three million hectares of farmland in the country to foreign investors, and around one million hectares have already been signed away.
The people of Madagascar were shocked to learn, via the international media, that their government had allocated a 1.3 million hectare land concession to the Korean company Daewoo Logistic
The programme in Mali offers a more clear-cut example of Millennium Challenge Corporaton (MCC’s) land activities and what it seeks to accomplish. Millennium Challenge Account–Mali (MCA–Mali) has taken over its own area of land in Mali’s Office du Niger – the most important irrigated land scheme in the country, and perhaps in the whole of West Africa. On the 20,000 or so hectares that it has secured, MCA–Mali has set up what is essentially an extraterritorial zone, where it is putting in place its own system of land management.
Indeed, the Office du Niger is already being heavily targeted by foreign investors: Libya has taken over 100,000 ha; Chinese investors 6,000 ha; Saudi investors are considering 50,000– 100,000 ha; there is an initiative by the regional body the West African Economic and Monetary Union (WAEMU) following a similar approach to the MCA project on 11,000 ha; another regional formation, the Economic Community of West African States (ECOWAS), is talking about a public–private-sector project that would cover another 100,000 ha. Meanwhile local farmers are struggling to access more than 1 ha per family, and competition for access to water is intensifying, since all irrigation in the Office du Niger is dependent on the same source of water. 13
The results presented here indicate that the amount of land concerned could be as large as 51 to 63 mn ha – an area equivalent to France.
A cluster of deals are identified in the eastern part of the African continent in countries like Ethiopia, Mozambique, Uganda and Madagascar, while other large recipient countries are Sudan, Mali and the Democratic Republic of Congo. In ten of the identified recipient countries the deals represent more than 5% of the current agricultural area – in Uganda more than 14%, in Mozambique more than 21% and in DR Congo more than 48% of the agricultural land! Thus, the consequences of the land deals can be expected to be very large for the local population and environment, with impacts such as agricultural intensification, forest degradation, displacement of local populations, increasing local food insecurity and increasing poverty. All in all, the international land investments have emerged as a new significant driver of land system change in an increasing teleconnected world.
Few people in Benin know that Stewart International, the company guiding the reworking of Benin’s land policy for MCA–Benin, is a major multinational corporation with a direct interest in commodifying African lands. It is one of the largest title insurance and mortgage service companies in the US and in recent years it has been aggressively expanding globally. Advising governments such as Benin’s on land and real estate polices is a side business for the company’s international division, albeit a growing one. 2 It also sells the technology for cadastral systems and land record systems, and the core of its business is selling title insurance.
The question we must end this presentation with is can we expect a new wave of resistance, similar in scale to that the confronted the asymmetrical might of the colonisers at the time of occupation and during the struggle for independence. It would seem that these traditions of struggle and resistance will be important foundations on which a new anti-colonial anti-capitalist struggle can take form.
Crucial to this is the WSF process. Social forums have taken root in Africa, even if weak and fragile. Dakar is an important milestone and what we do in the next period leading to Dakar and beyond as we outline strategies to develop alternative to crisis of civilization will be critical for Africa’s development. We urgently need to involve more African in this dialogue and in this initiative.
