(Disclaimer: This is the second of a series relating to Globalization, its effect on the African Continent and Possible Directions the Continent can take towards better livelihoods.)
The word “scourge” elicits an image of a whip striking its target with the flogger having to beware of the recoil action just in case it hits him on its return. Unfortunately, rather than globalization presenting a whip with the potential of hitting its master, it has been more closely represented by an incisive double-edged sword. Not only in the manner of how it cuts deeply but also as its edges represent the good and the bad. The effect of globalization has been non-discriminatory in bringing Africa the whole host of benefits and drawbacks. Whilst there are multiple benefits to pick from, the pitfalls are plenty. It seems the continent fell on the wrong end of the sword.
Africa has presented an interesting case study when assessing the progress of the continent as a whole and then the countries individually. Only 6 African nations managed to gain their independence prior to 1960. 45 of the 54 countries in Africa managed to get their independence in the 20-year period between 1960 and 1980 with a further 3 countries becoming independent post 1980 (Boddy-Evans, 2021). The majority of the nations in the continent are young independence and population wise. It is hard to isolate the effects of globalization without looking at the geo-political landscape of the continent. Multiple divisions exist within the continent due to language, tribe, ethnicity, and other distinguishing matters. For example, a common distinction within the continent is the one between Francophone and Anglophone nations. There is conflict within Cameroon as a result of people speaking English vs the majority speaking French! (The Independednt, 2019).
The effects of colonialism are felt across the continent till this day. That said, surface level observations will attribute infrastructure development in terms of brick-and-mortar items as well as connectivity to the internet in the continent as benefits of globalization. The emergence of social media has had a great impact on the politics and business of the region, and this is in no small part due to globalization and democratization of information (Sikhakhane, 2019). The downside to this development is that whilst it is heralded as a great win for globalization, only a few African countries have grown and developed to a decent level infrastructure for developing countries namely Rwanda, Kenya, South Africa, and Angola.
Supporters of the view that globalization has done a lot of good in Africa will point at the development of natural resource rich nations within the continent such as South Africa as a staple of what can be achieved by the other nations in the continent. A key factor of globalization which is the “free flow of capital” is at play here. The countries with resources are able to invest the mining and processing of said resources which would in turn benefit said countries. In a perfect world this would be the case but unfortunately this is not a perfect world. Big money resources such as oil have tended to corrupt local politicians easily. Politicians end up trying to pocket a share of the finite oil, gold, diamond, and cobalt profits rather than looking for ways to invest in their country’s long-term prosperity. As humans we can only think and bet on the distant future when there is present day stability. Without stability people will play games that benefit them the most in the short term. Political instability, financial problems and general negative sentiment towards Africa means that our politicians will more likely than not act in self-interest and embezzle funds where possible.
Angola is a perfect example of how a “resource curse” can occur. The resource curse (also known as the paradox of plenty) refers to the failure of many resource-rich countries to benefit fully from their natural resource wealth, and for governments in these countries to respond effectively to public welfare needs. (National Resource Governance Institute, 2015) Sonangol, Angola’s state owned oil company has been subject to multiple scandals under the leadership of Isabel dos Santos the daughter of the former president Jose Eduardo dos Santos who came to power in 1979 as served as president until 2017. More than $1bn from public funds were allegedly drained through transactions with state companies including Sonangol and the national diamond exporter Sodiam. (The Guardian, 2020) These are fund that could have done a lot of good for the nation of Angola and its citizens if used appropriately. The Angolan government could have invested those funds into building local oil refineries instead of relying on other countries and outside corporations to refine their oil.
Another issue that arises regarding the “free flow of capital” is that the investment or aid usually comes with strings attached. It is important to take notice of whether the capital flow is made in the form of investment or is it aid! Africa escaped the global decline in foreign direct investment (FDI) as flows to the continent rose to US$46 billion in 2018, an increase of 11% on the previous year, according to UNCTAD World Investment Report 2019 (UNCTAD, 2019) The main investors in Africa pre Covid-19 where Europe, the United States and China. The Netherlands and China saw the highest increase in direct investment in Africa with a $43 billion and $17 billion increase in investment, respectively. African countries have intensified their efforts to attract foreign direct investment with various fiscal and other incentive measures. Unfortunately, the terms and conditions relating to all this increased investment leave the African nations in a worse position than they were before getting the investment. For example, investment is being linked to African countries having to vote a certain way in the UN Resolutions. Failure to vote in line with the interest of the main investors in your nation will result in the pulling back of investment from your nation. In 2016 Israel pulled back investment from Senegal by cancelling the Mashav Drip Irrigation project after the Senegalese co-sponsored a resolution against the construction of illegal Jewish settlements in the West Bank. (EIU , 2017).
Unfortunately, when it comes to the inflow of capital to the continent, African nations will almost always get the short end of the stick. The multiple allegiances that are needing to be formed with foreign parties are such that the continent is internally divided. Opposing ideologies are being imposed on African countries dependent on “where their bread is buttered”. Multiple loans are being given out with clear signs that the nations receiving these loans will be unable to pay back the money adjusted for inflation. These loans are being recognized as foreign aid but as we all clearly know, there is no free lunch! Investment aside much more heinous activities are happening “All In The Name Of Trade”!
Yours In Thoughtful Learning
Bradley N Magumura