Exactly how much wealth does Africa lose every year? Third World
repayments of $340 billion each year flow northwards to service a
$2.2 trillion debt, more than five times the G8's development aid
budget, notes Patrick Bond. In addition Africa’s citizens
experience depletion of assets like forests and mineral
resources, and suffer the impact of pollution as a result of
mining. In this context, Bond argues that those who claim
international integration can enrich Africa are wrong.
There is a timeless line of argument from Walter Rodney's 1973
book 'How Europe Underdeveloped Africa': '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.'
Sub-Saharan Africa today still suffers the dispossession of wealth,
along two trajectories: South-North resource flows, and adverse
internal class formation. In the former case, the central
processes are associated with exploitative debt and finance,
phantom aid, capital flight, unfair trade, distorted
investment, ecological exploitation and the 'brain drain'.
In the latter case, instead of accumulation and class formation
via an organic middle class and productive capitalist class,
Africa has seen an excessively powerful 'comprador'-oriented
ruling elite whose income is based upon
financial-parasitical accumulation and political- bureaucratic
patronage power, which in turn is then subject to vast
Although remittances from the Diaspora now fund development and
even a limited amount of capital accumulation, capital
flight is far greater. At more than $10 billion/year since
the early 1970s, collectively, the citizens of Nigeria, the
Ivory Coast, the DRC, Angola and Zambia have been especially
vulnerable to the overseas drain of their national wealth. A
major factor during the late 1990s was the relisting of the
primary share-issuing residence of the largest South African
firms, from Johannesburg to London.
In Washington, perhaps the most highly regarded of African elites
is South African finance minister Trevor Manuel, who until
late last month served as chair of the World Bank/IMF
Development Committee. Having failed for four years to get
even partial democratisation of the Bretton Woods
Institutions onto the committee's agenda, Manuel gloried in
the return of attention to Africa: 'Right now, the
macroeconomic conditions in Africa have never been better. You
have growth across the continent at 4.7%. You have inflation
in single digits. The bulk of countries have very strong
fiscal balances as well.'
These statements are true only if we take misleadingly narrow
economic statistics seriously. Fortunately we don't need to
because even the Bank is occasionally compelled to confess
how Africa is drained of 'genuine savings' through depletion
of minerals and forests, and other eco-social factors which
ostrich-like economists invariably ignore.
Manuel's riff sounds impressive. Indeed, because of structural
adjustment austerity, African states reduced their early-1990s
deficit rates of around 6% of annual output, to just under 4%
today. However, the fastest growing economies actually
increased their deficits by a full percentage point over the
last decade, suggesting that Keynesianism still works as
well for African elites as it does for George Bush.
Meanwhile, monetary policy was tightened, interest rates soared
and African central banks - typically run by IMF or ex-IMF
staff - were discouraged from printing money (which
sometimes fuels inflation). Price increases were reduced
from double-digit rates prior to 2004 to an average of 9%
this year. However, that level is far too low for a
developmental trajectory, former Bank chief economist Joseph
Stiglitz argued in his 'Post-Washington' critique of
Bank president Paul Wolfowitz - architect of the Iraq War - was in
a sporting mood at Manuel's Development Committee press
conference on September 25: 'The path has been cleared to
complete debt relief, and at the risk of a dangerous
metaphor, I think Trevor has given us the ball right in
front of the goal, and the goalie has tripped, and all we
have to do now is kick it in.'
A dangerous move indeed, for Manuel warned of at least one more
hurdle: 'a legal challenge because countries may feel that some
have been favoured against others. My understanding is that
both Rodrigo [Rato, IMF managing director] and Paul will go
before their boards, sort out what the equality of treatment
principle would be in each of the instances, and ensure that
there is equality of treatment.'
It seems the InterAmerican Development Bank and Asian Development
Bank won't participate in the debt relief pantomime. So 14 African
countries favoured by the G8 - and four others in Asia and Latin
America - will get a few crumbs of relief, costing the G8 less
than $2 billion per year to service (on $40 billion in
But because their leaders have ceased putting up a fuss, the debt
of these 18 is reduced: not to nothing, but to levels where
the Bank and IMF retain macroeconomic control, so that
capital flight and ultra- cheap commodities can continue their
None of the trade reforms proposed for the Hong Kong WTO meeting
in December will alter the basic calculus of long-term
decline for their (non-oil) primary commodity prices.
Christian Aid recently estimated the damage done to African
countries by trade liberalisation at $272 billion since
Even in the face of those 'internal contradictions and conflicts'
- including vast overcapacity, wars, real estate bubbles,
hurricane repairs, debt crises and balance of payments
problems - men like Wolfowitz can afford to make small
concessions. After all, Third World repayments of $340
billion each year flow northwards to service the $2.2
trillion debt. This is more than five times the G8's
development aid budget (and ten times the level of Northern
donations once we subtract the 'phantom aid' which never
reaches the masses).
As Brussels-based debt campaigner Eric Toussaint concludes, 'Since
1980, over 50 Marshall Plans worth over $4.6 trillion have been
sent by the peoples of the Periphery to their creditors in
Consider, as well, the South as ecological creditor. According to
ecologist Joan Martinez-Alier, 'The notion of an ecological debt
is not particularly radical. Think of the environmental
liabilities incurred by firms under the United States
Superfund legislation. Although it is not possible to make
an exact accounting, it is necessary to establish orders of
magnitude in order to stimulate discussion.'
Martinez-Alier and Jyoti Parikh of the UN International Panel on
Climate Change argue that based upon the Third World's role as a
carbon sink, an estimated annual subsidy of $75 billion flows
South to North. Africans are most exploited because
non-industrialised economies have not begun to utilise more
than a small fraction of what should be due under any fair
framework of global resource allocation such as carbon
The amounts involved would easily cover financial debt repayments.
Instead, the G8 Gleneagles scam keeps poor countries down in
several ways. According to Jubilee South: 'The multilateral
debt cancellation being proposed is still clearly tied to
compliance with conditionalities which exacerbate poverty,
open our countries further for exploitation and plunder, and
perpetuate the domination of the South. Even if the debt
cancellation were without conditionalities, the proposal
falls far too short in terms of coverage and amounts to
demonstrate a bold step towards justice by any standard.'
However, almost by accident another Bank document began to do the
rounds just prior to the Bank/IMF Annual Meetings: 'Where is the
Wealth of Nations?' Here at least, World Bank environmental staff
recognise that foreign investors may diminish overall wealth and
savings, once resource depletion and pollution are factored in.
(To be sure, the Bank adopts a minimalist definition based upon
current pricing - not potential future values when scarcity
becomes a more crucial factor, especially in the oil sector.
Nor do Bank economists yet deign to calculate the damage
done to local environments, to workers' health/safety, and
especially to women and vulnerable people in communities
around mines. And unpaid household and community work is
still left out of national statistical accounts, reducing
women's labour to a nil value.)
What investments are most important, then? Dating to the
mid-1990s, foreign direct investment has flowed mainly into
oil rigs in the West African Gulf of Guinea and Angola's
offshore Cabinda field, aside from an ill-fated South
African privatisation spree in 1997.
Meanwhile, corrupt host regimes waged war against their people,
not only in Angola (where formal conflict ended after a
rightwing Unita guerrilla movement faded following Jonas
Savimbi's death). In addition, as Amnesty International
pointed out last month, the Bank was meant to finance the
multi-billion dollar Chad-Cameroon pipeline to add human
rights sensitivity, but deepening repression is the actual
Other Africans suffering oil depletion under dictatorial or
militarised conditions include citizens of the Republic of the
Congo, Equatorial Guinea, Gabon, Nigeria and Sudan.
South Africans are also implicated in a kind of subimperial
looting of oil. At the country's annual Political Science
Association conference in KwaZulu-Natal last month, senior
government researcher John Daniel shifted from claiming in
2003 that 'non-hegemonic co- operation has in fact, been the
option embraced by the post-apartheid South African state.'
After reviewing the record of the African National Congress (ANC)
in the continent's energy sector, especially Sudan and
Equatorial Guinea, he conceded, 'The ANC government has
abandoned any regard to those ethical and human rights
principles which it once proclaimed would form the basis of
its foreign policy.'
Big Oil celebrated this state of power relations at the World
Petroleum Congress in Johannesburg last month. Opponents also came
together, invited by the excellent NGO groundWork. The Ogoni
people, for example, demanded reparations not only for the
thorough destruction of their Delta habitat, but also for
the depletion of what economists call 'natural capital'.
How much natural capital value is removed from Africa? In South
Africa, the value of minerals in the soil fell from $112 billion
in 1960 to $55 billion in 2000, according to the UN, while
Africa as a whole suffers negative net annual savings.
Adding not just oil-related depletion but other subsoil assets,
timber resources, nontimber forest resources, protected areas,
cropland and pastureland, the Bank calculates that Gabon's
citizens lost $2,241 each in 2000, followed by people in the
Republic of the Congo (-$727), Nigeria (-$210), Cameroon
(-$152), Mauritania (-$147) and Cote d'Ivoire (-$100).
In addition to mineral depletion worth 1% of national income each
year, the Bank acknowledges that South Africans lose forests worth
0.3%; suffer pollution ('particulate matter') damage of 0.2%; and
emit C02 that causes another 1.6% of damage. In total, adding a
few other factors, the actual 'genuine savings' of South
Africa is reduced from the official 15.7% to just 6.9% of
These analyses, documents and calculations are new and fresh, and
should shame those who claim international integration can enrich
Africa. The opposite is more true.
Unlike Trevor Manuel, African justice activists like those who met
at groundWork's conference know it. They wrote to officials
of the World Petroleum Congress: 'At every point in the
fossil fuel production chain where your members "add
value" and make profit, ordinary people, workers and
their environments are assaulted and impoverished. Where oil
is drilled, pumped, processed and used, in Africa as
elsewhere, ecological systems have been trashed, peoples'
livelihoods have been destroyed and their democratic aspirations
and their rights and cultures trampled.'
The letter concluded, 'Your energy future is modeled on the
interests of over-consuming, energy-intensive,
fossil-fuel-burning wealthy classes whose reckless and
selfish lifestyles not only impoverish others but threaten
the global environment, imposing on all of us the chaos and
uncertainty of climate change and the violence and
destruction of war. Another energy future is necessary: yours has
Indeed the Southern African Social Forum in Harare earlier this
month generalised this sentiment to the entire set of
economic relations that dispossess Africa of all kinds of
* The author is based at the University of KwaZulu-Natal Centre
for Civil Society. This work is part of a larger study
carried out in collaboration with the Johannesburg-based
Southern African Centre for Economic Justice and
Harare-based Equinet, and participants at their 10-12
October workshop in Harare are thanked for feedback. Comments
are welcomed, at firstname.lastname@example.org