Why Africa Isn’t Rising, resource curse and how everyone – including the west, World Bank – is all in on it
New book looks to go beyond the tales of spectacular venality among Africa’s “Big Men” to show how the continent’s development is really being sapped
Miss Africa Ireland 2009 and a friend during the annual Africa Day. Behind the gentle faces, the continent faces many challenges to its growth. (Photo/William Murphy/Flickr). Miss Africa Ireland 2009 and a friend during the annual Africa Day. Behind the gentle faces, the continent faces many challenges to its growth. (Photo/William Murphy/Flickr).
IN one of Africa’s most celebrated surprises this year, Nigerian voters unseated President Goodluck Jonathan – and the country didn’t burn; it went on happily with its life.
The election of Muhammadu Buhari defied expectations of electoral fraud and violence, and his anticorruption platform sparked hopes for reform and economic growth (See article).
Yet progress on both fronts has been slow and uneven. To understand why, pick up Tom Burgis’s “The Looting Machine,” a bracing look at why a continent blessed with one-third of the world’s hydrocarbon and mineral wealth remains mired in poverty and dysfunction.
A former Africa correspondent for the Financial Times, Burgis goes beyond the tales of spectacular venality among Africa’s “Big Men”—the world’s four longest-serving rulers are in African countries bursting with oil or minerals—to explain how the continent’s “resource curse” is sapping its development.
Nigeria is a case in point. Africa’s biggest oil producer gets more than 90% of its foreign earnings and two-thirds of its tax revenue from oil exports. Yet there are many reasons why that hydrocarbon bounty is a mixed blessing.
For starters, it can drive up the value of a nation’s currency, making other exports less competitive and imports more attractive. As Burgis points out, textiles used to be Nigeria’s most important manufacturing industry. But cheaper Chinese imports smuggled in by Nigerian gangs (an illicit trade worth more than $2 billion a year) have devastated the industry—one example of why Africa produces just 1.5% of global manufacturing output, despite its abundance of cheap labor.
Billions of dollars in oil revenues are also a tempting pot of money for bent politicians. One 2012 report said corruption had swallowed up $37 billion worth of Nigeria’s oil money over the last decade. That surpasses the annual economic output of more than half the nations in Africa as well as Nigeria’s annual federal budget.
Such corruption has other toxic effects. Dirty money from bribes and kickbacks has to be laundered, and because those doing the cleaning don’t care so much about profit or productive investment, their infusions of cash distort the value of assets.
Nigeria’s reliance on oil for tax revenues also creates a perverse political dynamic: As Burgis puts it, “the ability of rulers of Africa’s resource state to govern without recourse to popular consent.” Instead of having to do right by taxpayers to win their votes, politicians focus on controlling and dispensing mineral wealth to bolster their patronage networks.
“Politics becomes a game of mobilising one’s ethnic brethren,” Burgis notes—a contest with dangerous destabilising effects in Nigeria’s fractious polity. In fact, as one Nigerian governor explains, if he failed to share the wealth, ill-gotten or otherwise, “I’ve got a big political enemy.”
Nigeria is far from the exception. At least 20 African countries are what the International Monetary Fund calls “resource-rich”: that is, their natural resources account for more than one-quarter of exports. Risking limb if not life, Burgis gamely takes readers around some of them, from the coltan mines of the Democratic Republic of the Congo and Guinea’s rich bauxite and iron ore deposits to the diamond fields of Zimbabwe.
Even as the names and histories of the different predatory leaders blur, one thing is clear: Their looting depends on an all-too-willing cast of outside partners, whether Western mining and oil companies that plunked down bribes and abetted massacres, shady Israeli middlemen or shell companies in the British Virgin Islands.
Particularly disquieting is Burgis’s description of the unsavoury role played by the World Bank’s International Finance Corporation, which backed visibly corrupt, environmentally destructive, or just plain inequitable oil and mining ventures in Chad, Guinea and Ghana—all countries it was supposed to be helping.
‘Villain’ Samuel Pa and hypocrisy
If Burgis’s book were to be made into a movie, though, the star villain would have to be Samuel Pa, the bespectacled, bearded Zelig behind some of the continent’s most dubious recent resource deals. Over the course of several decades, Pa parlayed the connections he made as a Chinese intelligence operative and arms merchant into a sprawling, secretive consortium based in Hong Kong known as the 88 Queensway Group, not to mention a spot on the US Treasury’s sanctions list.
Western criticism of China’s growing presence in Africa, Burgis writes, nonetheless carries a “distinct whiff of hypocrisy” that might make even King Leopold blush.
Moreover, ordinary Africans stand to gain much from the $1 trillion or so that Chinese entities will reportedly plow into their continent by 2025.
That said, the tale of Pa and Queensway, which has its tentacles wrapped around oil holdings in Angola and Nigeria, diamond mines in Zimbabwe, and agriculture in Mozambique (to name just a few of its ventures), reeks of sulphur and brimstone. As several seasoned African mining executives told Burgis, the Queensway Group reminded them of Cecil John Rhodes, the forerunner of those who “use the conquest of natural resources to advance political power and vice versa.”
One of the best hopes for curbing this rapacity and corruption may be to impose greater transparency on Africa’s outside business partners. The US Securities and Exchange Commission, for instance, recently proposed a rule requiring US-listed oil, gas and mining companies to publish details of their payments to governments.
Even China may see the writing on the wall. A few months after Burgis’s book came out this year, he reported that Pa had been detained in one of China’s deepening anti-corruption probes. Guess that scotches the prospect of any Pa Scholarships in the future.
by JAMES GIBNEY