Category: Africa

Back to the White Elephants 鈥� the West鈥檚 new development strategy in Africa

Farwa Sial1 Comment

“Europe鈥檚 new external investment strategy needs to reconnect with historical business models we are going back to white elephants of 1970s 鈥� because that鈥檚 what partners want“

– G7 official in a speech on Trade and Finance.

“The era of Western dominance has indeed definitely ended“

– Josep Borrell (2024).听

On 28 January 2024, three members of the Economic Community of West African States (ECOWAS), Niger, Mali and Burkina Faso, announced their withdrawal from ECOWAS.  Created in 1974, ECOWAS is a regional economic community serving as a large trading bloc, to enhance the regional integration and economic cooperation of its 15 member countries.  The three countries鈥� decision to leave the trade-bloc so forthrightly, was related to a series of ECOWAS-imposed sanctions on their military governments and the countries鈥� objection to French influence in the bloc. Long-standing dissatisfaction with the ECOWAS was also an overarching factor; member countries include some of the most resource-rich nations, but on the whole members barely made any progress on socio-economic indicators linked to the ECOWAS promise of prosperity through regional integration.

Political uncertainty in the trade-bloc further deteriorated in mid-February 2024, when the Senegalese President Macky Sall, unilaterally postponed the country鈥檚 presidential elections and was later ousted. Faced with such existential challenges, ECOWAS lifted sanctions on Niger and other countries within a month of their imposition. While the potential breakdown of ECOWAS and the general trajectory of some African countries into authoritarianism, may not seem like a radical shift in the continent鈥檚 history, the incendiary global context, which compelled ECOWAS to lift sanctions is unprecedented. The neo-colonial drivers of the current crumbling political order in Sudan and the Congo as well as the ongoing genocide in Palestine, indelibly expose the reality that we are entering into an era of naked colonial violence. Backlash to US-centred imperialism is growing. In March 2024, Niger suspended all military relations with the US, citing issues related to US encroachment upon its sovereignty. Embedded in this evolving situation, the episodic and ad-hoc de-linking of Global South countries from Global North countries and their dominance in blocs such as the ECOWAS is representative of a broader shift in Africa鈥檚 resistance against political and economic subordination to G7 countries.

Against this background, the Western powers鈥� new and evolving development strategy in Africa offers important insights into how the G7 countries are failing to register the transformative changes in Africa.  In a closed-door speech on investment, trade and finance forum, a G7 official described Europe鈥檚 new external investment strategy as one that harkens back to the White elephants of the 1970s. While the speaker was using the term 鈥榃hite Elephant鈥� to signify the EU鈥檚 interest in funding hard infrastructure, imbued with a promise of investment and growth for recipient countries, he clearly failed to grasp its meaning. A 鈥榳hite elephant鈥� is an overly expensive infrastructure asset, which fails to generate value for the economy.

Considered in light of the correct definition of the term, the West鈥檚 new development strategy does seem to be going towards expensive infrastructure projects, spurred by a reactionary, performative but ultimately imagined competition with China. I make this point through a comparative analysis between the G7s contemporary development strategy vis-脿-vis the Chinese development model as it unfolds within the broader demise of US-led imperialism.

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The white saviour industrial complex and global AI governance

Shamira AhmedLeave a comment

In the realm of听, the 鈥榳hite saviour鈥� trope has long been a subject of听. This phenomenon, often rooted in colonialist attitudes, positions Western individuals or entities as benevolent rescuers of non-Western communities, usually without acknowledging or addressing systemic multidimensional inequalities, colonial/racial privilege, and local agency of indigenous communities. The white saviour complex has not only perpetuated听听but has also听听the efforts and voices of those it claims to help.

As artificial intelligence (AI) has emerged as a global force to potentially , we see a new manifestation of the white saviour industrial complex within emerging global AI governance.

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Copper and Economic Sovereignty

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By Robrecht Declercq & Duncan Money

7 January 1968 was a day of celebration across the Congolese Copperbelt, marked with marches and festivities in the mining towns, bonuses for mineworkers and medals for those who had labored many years in the industry. All this marked the one-year anniversary of the foundation of G茅camines, the state-owned company that was established when the Congolese government nationalized the operations of Union Mini猫re du Haut Katanga (UMHK).

Early in 1967, the Democratic Republic of Congo (DRC) had decided to nationalize the largest and most powerful colonial company that still operated on its soil, after a dispute about where the headquarters of the company should reside. But deeper concerns stemmed from the fact that a former colonial business still controlled the most important natural treasures of the newly independent Congo. The Congolese had high hopes that the new company would propel economic growth through significant expansion of production. Ultimately, these hopes met with bitter disappointment.

It was not only Congolese people who entertained such hopes, however. What happened in Congo was part of what we term a post-colonial world of copper (1960-1980) in our edited collection . The book is a history of the global production of copper, its labour relations, technologies and the international political economy across the 19th and 20th century. The transition, and ultimately, failure of this unique albeit brief episode of postcolonial control is one of the focuses of the book. We assert that the national fragmentation of copper production in the postcolonial world, was in fact deeply intertwined with transnational influences and exchanges. It expressed an agenda that was shared in the Global South: to straighten out the huge economic imbalances with the Global North.

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Where is Ethiopia going after the deal with the IMF?

basiloberholzer1 Comment

The agreement recently negotiated between the Government of Ethiopia and the International Monetary Fund (IMF) not only imposes austerity on the government, but also risks destroying the country鈥檚 model of economic development.

Ethiopia, Africa鈥檚 second-most populous country, has featured tremendous progress in its economic development in the past twenty years. A developmental state driving public investment while imposing tight regulations on the financial sector, a managed exchange rate, and capital controls, achieved a significant decline in hunger and malnutrition, and improvements in literacy and other relevant human development indicators.

Nonetheless, Ethiopia is facing serious macroeconomic challenges including high inflation of close to 30 percent, a current account deficit, foreign exchange shortage, and slowing growth, jointly with domestic conflicts and climate change impacts. This situation has forced the country into negotiations with creditors on its external debt, even though Ethiopia鈥檚 external debt stock compared to GDP is less compared to other low-income countries. International financial institutions see government budget deficits as the main culprit in causing inflation and an overvalued real exchange rate that causes trade deficits and balance-of-payments problems while crowding out private investment in the country. End of July 2024, the Government of Ethiopia and the International Monetary Fund (IMF) concluded an agreement on policy action to be taken for a stepwise release of a loan of USD 3.4 billion from the IMF, starting with the immediate release of USD 1 billion, as well as additional grants and loans from the World bank. The agreement is built on the following : 1) floating the exchange rate; 2) modernizing the monetary policy framework going from reserve targeting to interest rate targeting; 3) ending monetary financing of the government budget via the National Bank of Ethiopia (NBE) and exiting financial repression; 4) improving mobilization of domestic government revenues; 5) debt restructuring with external creditors; 6) strengthening the financial position of state-owned enterprises.

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The state in Africa is a colonial state

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Map of Africa from 1583

The default unit of analysis for many economists when dealing with national economics is the state. Yet, in economics textbooks 鈥榯he state鈥� is often assumed to be a neutral actor exogenous to economic processes. It is assumed to be the same 鈥� in essence – everywhere. This conception is based on a Eurocentric view of the state, which assumes all states are ahistorical Westphalian nation states based on Enlightenment principles. However, states are not neutral, but deeply shaped by historical processes. Analyses of 鈥榮tates鈥� in economics – country analyses, country data, evaluations of so-called 鈥榤acroeconomic fundamentals鈥� – must be rethought by taking the complexities of the state in Africa into account in their conceptualisations, analyses and policy proposals. In this piece, I unpack how the African state evolved as a colonial project and the implications of it being mischaracterized as neutral state.

A state like no other

The state in Africa has been mischaracterized as a neutral institution devoid of a problematic history which affects its present. In its simplest terms, the state is an institution of governing, i.e., a political organization whose main aim is to establish and maintain security, law and order within its geographic jurisdiction. In economics, the state is discussed and perceived as a one size-fit-all institution, one that is and must be similar in Europe, Asia, Africa, and the Americas. The African state, in particular, has been presented as if it is similar to other states, especially in Europe and the United States of America to which it must aspire.

Moreover, the African has been evaluated and judged on the basis of other perceived progressive states, especially those on the western hemisphere. That states are the same is both untrue, misleading, and ahistorical. African states are very different from other states as they are products of conquest, colonialism, genocides, epistemicides and slavery. It was created to support these processes and it still dispenses them mainly through violence. Those who colonised African countries did so not only to access markets and raw materials, but to displace epistemologies and decentre the colonized; and in the process they centered the colonising countries as the centre of knowledge production and essence of humanity. This is the origin of the superiority of liberal economics as the dominant way of understanding and doing economics in Africa.

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On recentring people鈥檚 voices to decolonise FinTech narratives

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In 2009, I was interested in studying the phenomenon of M-Pesa as a legal scholar鈥攋ust a year after its launch and intense rollout. My standpoint enabled me to see the initial regulatory paradoxes that M-Pesa presented. In 2010, I began my PhD, exploring what a regulatory framework should look like. My analysis focused on the complexities presented by the storage and transfer of customer funds within mobile money systems. Central to were themes of financial regulation, consumer rights, financial stability, conceptualising 鈥榝inancial inclusion鈥�, and the meaning of 鈥榖anking the unbanked鈥�. At the time, the study was significant, in understanding the contractual tensions between mobile money users and Safaricom, a non-bank entity, which provided services akin to a traditional bank鈥檚 deposit system鈥攜et did not appear to be subject to the same regulatory restraints as conventional banks. Crucially, banks and financial institutions had historically dominated much of the financial system, through practices due to colonialism. Therefore, M-Pesa caused much upheaval to established banks, but simultaneously provided hope for the excluded. Various actors extended this new hope, in the 鈥榮uccess鈥� narrative of M-Pesa. Its beneficial use as a storage and transfer system was extolled as , and the restatement of its trajectory was and continues to be modelled across the developing world. The global development and digitalisation agenda have subsumed M-Pesa鈥檚 pervasive influence, both valorising the pathways to 鈥榙evelopment鈥� and 鈥榠nnovation鈥� through FinTech with a singular aim of 鈥榝inancial inclusion.鈥�

As a result, Kenya has become the site of contestation for overwhelming empirical research, interest, and knowledge production, particularly by Western scholars and institutions. A 鈥榞old rush鈥� has emerged, and the scramble for knowledge extraction has intensified across academic disciplines and across methodologies. Studies from Ghana, Senegal and Kenya dominate. The study of 鈥榙evelopment鈥� in all its iterations has gained a new development. However, much of the ways in which mobile money (M-Pesa) and FinTech are discussed and framed demonstrates a Western understanding of the everyday lives of the Kenyans who use it. Scholars, activists, and proponents often situate the premise of its use as being between two paradigms: advancing through the enhancement of global development aims, and its function as a tool that includes Kenyans in extractive cycles of financialisation. Both of these are true.

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When economists shut off your water

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Researcher Irene Nduta in Kayole-Soweto.

By Adrian Wilson, Faith Kasina, Irene Nduta and Jethron Ayumbah Akallah

In August 2020, people all over the development world   about water in Nairobi. There was a lot of anger, and some calls for sending people to the guillotine. The reason: the publication of  (RCT), run by two American development economists, working together with the World Bank. In order to compel property owners in Kayole-Soweto鈥攁 relatively poor neighborhood in eastern Nairobi鈥攖o pay their water bills, this experiment disconnected the water supply at randomly selected low-income rental properties.

There鈥檚 no doubt that water is a problem in Nairobi. As Elizabeth Wamuchiru , the water system in the city has a built-in spatial inequality inherited from the British colonial era. Visitors to the city can readily see the differences between the cool, leafy, green neighborhoods of Kilimani and Lavington鈥攕egregated white neighborhoods under colonialism, now home to rich Kenyans, foreigners, and NGOs鈥攁nd the gray and dusty tin-roof neighborhoods of Mathare, Kibera, Mukuru, and Kayole, home to the lower-income Kenyans excluded from Nairobi鈥檚 prosperity.

Today鈥檚 water system reflects this history of inequality. Nairobi鈥檚 water is harnessed from a combination of surface and groundwater sources; however, the city鈥檚 groundwater is naturally salty and . Piped water systems, provided to upper- and middle-income housing estates, do not exist in the vast bulk of the city鈥檚 poorer neighborhoods, where people must instead buy water from vendors鈥攐ften salty water pumped from boreholes, or siphoned off from city pipes through rickety connections that are frequently contaminated with sewage. In the richer neighborhoods, Nairobi Water Company, a public utility, sells relatively clean piped surface water for a fraction of the price paid by poorer Nairobians鈥攁 disparity that  to often be the case in other cities in the global South. , in poorer neighborhoods such as Kayole-Soweto, 鈥渨ater provision costs more, is less safe, and is less consistent than in other richer parts of the city.鈥�

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The three-stage process through which African resource sovereignty was ceded to foreign mining corporations

Ben RadleyLeave a comment

In the 1960s, newly independent African governments asserted sovereignty over their metal and mineral resources, in a reversal of their prior colonial exploitation by European mining corporations. In this excerpt from his new book , Ben Radley shows how transnational corporations have once again become the dominant force assuming ownership and management of industrial mining projects. Radley argues this latest reversal has taken place through a three-stage process grounded in a misguided reading of African economic stagnation from the mid-1970s onwards. Recent mining code revisions in several countries have been heralded by some as marking a new era of resource nationalism. Yet the new codes remain a far cry from the earlier period of resource sovereignty. The first three chapters of the book can be downloaded for free .

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