Debunking the Myth of Development and Investment in Africa


American Investments in Africa The myth of American investments in Africa: “Investing in the Next Generation”

It was a hyperbole fest (“hypefest”) at the U.S.-Africa Leadership Summit in Washington, D.C. last week. It was all about the “fastest-growing continent with the youngest population and highest level of investment”.   President Obama and other top U.S. officials sang what is now becoming the informal “Ballad of Africa Rising”. U.S. Secretary of State of State John Kerry crooned, “10 of the 15 fastest-growing countries in the world are in Africa. Africa will have a larger workforce than India or China by 2040”. Former N.Y. City mayor Michael Bloomberg and U.S. Secretary of Commerce Penny Pritzker penned a glowing op-ed in Forbes whistling Dixie over Africa’s “expected rise of six percent annual GDP growth over the next decade.” They declared triumphantly that “real income has increased more than 30% over the last 10 years, and many African governments are making investments in infrastructure, education, and health care that are improving millions of lives.” They lamented the fact that “investment by U.S. companies in Africa remains too low.”

President Obama offered his cure for “too low investment” in Africa by affirming that the “United States is determined to be a good partner, an equal partner, and a partner for the long term in Africa’s success.” His partnership plan is somewhat disconcerting but clear and specific:

So I’m pleased that in conjunction with this forum, American companies are announcing major new deals in Africa. Blackstone will invest in African energy projects. Coca-Cola will partner with Africa to bring clean water to its communities. GE will help build African infrastructure. Marriott will build more hotels. All told, American companies — many with our trade assistance — are announcing new deals in clean energy, aviation, banking, and construction worth more than $14 billion, spurring development across Africa and selling more goods stamped with that proud label, “Made in America.”

Perhaps the President’s statements could use a little “truth in advertising.” Coca-Cola will invest $5 billion to fund manufacturing lines and production equipment so that it can sell more sugary soda in Africa, a major contributor to the obesity epidemic,  not just to provide clean drinking water to Africans. (By the same token, I was dismayed to learn the R. J. Reynolds Tobacco Company was not making any investments in Africa. To paraphrase an old Coke advertising slogan, “Wouldn’t Coke taste good with Winston.”) Blackstone Group LP, “the world’s biggest buyout firm”, plans to start investing in energy projects in Africa worth $3 billion.” General Electric plans to invest $2 billion by 2018 primarily in “facility development, skills training and sustainability initiatives”. Marriott International, Inc., plans to invest $200 million “opening 36 new hotels and hiring 10,000 new employees by 2020, expanding its reach to 16 countries”.  For operating “Ghana’s technological infrastructure”, particularly in banking,  for the next five years IBM will BE PAID $66 million.

The myth of African “development”: Not all that glitters is gold

In January 2013, Rick Rowden wrote a seminal article on the “The Myth of Africa Rising” in Foreign Policy online criticizing the “popular narrative” in such magazines as Time and The Economist “that the continent may well be on track to become the next global economic powerhouse.” Rowden asserts that the popular narratives of  African “development” are “wrong” and challenge the “problematic way national economic development has come to be understood in the age of globalization.”

Rowden argues the measures used to quantify Africa’s development are misleading and offer “only a partial picture of how well development is going”. He dismisses the prevailing measures of African development —  recent high GDP growth rates, rising per capita incomes, growth of mobile phones and mobile phone banking, tourism, retail, the number of African billionaires and the increase in Africa’s trade with the rest of the world – as inadequate and certainly incongruent with the way development “has been understood over the last few centuries.” He suggests that “from late 15th century England all the way up to the East Asian Tigers of recent renown, development has generally been taken as a synonym for industrialization.” “Dead-end activities” in Africa such as “primary agriculture and extractive activities such as mining, logging, and fisheries” without manufacturing” simply cannot be deemed “development”.

Could there be “development” in Africa without “industrialization” and good governance? Is mere GDP growth and increase in trade volumes proof of economic development? Does the rise in per capita incomes, growth of mobile phones and mobile phone banking, tourism, retail and increases in the number of African billionaires truly represent whether Africa is the “fastest growing continent”? Could African development be accelerated by investments of companies that sell sugary drinks that have been proven to cause an epidemic of tooth decay and obesity? Could African development be structured in thousands of fancy tourist hotel rooms or in networking banks when the vast majority of Africans are living on less than $2 a day and are deprived of the basic necessities of life?  Pray tell, how is this “Investing in the Next Generation” of Africans, to invoke the theme of the Summit?

If “industrialization” is used as the yardstick to measure African development, Rowden argues, “the bulk of African countries are either stagnating or moving backwards.” Yet African countries are led to believe by the “free market economists” that they can “stick with their current primary agriculture and extractive industries and ‘integrate’ into the global economy as they are.” The tragic fact (that is understated or completely ignored in the “Africa Rising” song and dance) is that “African economies are largely a primary agricultural economy with little movement towards the increased manufacturing or labor-intensive job creation that are needed for Africa to ‘rise.’” Rowden proposes economic indicators “that offer a more precise picture of how well Africa is developing (or not).”

We can look at whether manufacturing has been increasing as a percentage of GDP, or whether the manufacturing value added (MVA) of exports has been rising.  The share of MVA in Africa’s GDP fell from 12.8 percent in 2000 to 10.5 percent in 2008, while in developing Asia it rose from 22 percent to 35 percent over the same period. There has also been a decline in the importance of manufacturing in Africa’s exports, with the share of manufactures in Africa’s total exports having fallen from 43 percent in 2000 to 39 percent in 2008. In terms of manufacturing growth, while most have stagnated, 23 African countries had negative MVA per capita growth during the period 1990 – 2010, and only five countries achieved an MVA per capita growth above 4 percent…. Africa remains marginal in global manufacturing trade. Its share of global MVA has actually fallen from an already paltry 1.2 percent in 2000 to 1.1 percent in 2008… In terms of exports, Africa’s share of global manufacturing exports rose from 1 percent in 2000 to only 1.3 percent in 2008. Africa is also losing ground in labor-intensive manufacturing: Its share of low-technology manufacturing activities in MVA fell from 23 percent in 2000 to 20 percent in 2008, and the share of low-technology manufacturing exports in Africa’s total manufacturing exports dropped from 25 percent in 2000 to 18 percent in 2008…

Do African countries need American investments that promote good governance and industrialization or expand Coca-Cola sales and bottling plants and build posh Marriott hotels?

I believe good governance is an essential precondition for genuine economic development in Africa. However, “good governance” has become a foggy buzz phrase. The multilateral banks and aid agencies use it to pontificate about the rule of law, accountability, transparency, corruption control, participation, etc., without doing a damn thing to make those things happen. By talking about “good governance”, the donors and loaners can strut the moral high ground self-righteously lecturing and hectoring everyone about human rights, poverty reduction and the rest of their hocus-pocus. President Obama pontificated at the Summit:  “When you have got good governance – when you have democracies that work, sound management of public funds, transparency and accountability to the citizens that put leaders in place – it turns out that that is not only good for the state and the functioning of government, it is also good for economic development.”

So how does the U.S. invest in African good governance, President Obama? By getting American companies to “partner” with African thug-regimes that have made corruption an art form? By providing aid and loans to thug-regimes that routinely torture their political opposition, critics and dissidents? By “powering” thug-regimes that disempower their citizens and cling to power by stealing elections? By turning a blind eye to thug-regimes that persecute the press and incarcerate young bloggers? By coddling the 21st Century’s worst criminals against humanity?

The U.S. knows exactly what to do to promote good governance. It has done it when it has found it convenient and against those regimes considered “not friendly.” The U.S. has passed laws against certain unfriendly regimes with “poor governance” and human rights records by targeting both U.S. and non-U.S. businesses from making investments. Of course, the President does not need authority from Congress to crack down on regimes and foreign officials suspected of or known to be guilty of human rights abuses. He has all the tools, including economic sanctions, to promote good governance in Africa. With a stroke of his pen, he an issue an Executive Order and selectively administer just the right dose of disapprobation.

The U.S. has selectively applied crippling sanctions against regimes it disapproves. In response to a question by a young Zimbabwean entrepreneur at the Summit,  President Obama explained sanctions against Zimbabwe as follows: “The situation in Zimbabwe is somewhat unique. The challenge for us in the United States has been how do we balance our desire to help the people of Zimbabwe with what has, frankly, been a repeated violation of basic democratic practices and human rights inside of Zimbabwe. And we think it is very important to send clear signals (to Robert Mugabe) about how we expect elections to be conducted, governments to be conducted — because if we don’t, then all too often, with impunity, the people of those countries can suffer…”

The situation in Zimbabwe is not unique. It is commonplace in Africa. When the regime in Ethiopia declared election victory by 99.6 percent in 2010, President Obama did not “send a clear signal about how the U.S. expects elections to be conducted.” When that same regime now holds thousands of political prisoners in its jails, described in the U.S. State Department’s annual human rights report as posing “life-threatening conditions”, and young bloggers are jailed without cause or evidence, President Obama has chosen to adopt a double standard and “sent no clear signals”. His position on the regime in Ethiopia is not unlike President Franklin D. Roosevelt’s on the Nicaraguan dictator and his regime: “Somoza may be a son of a bitch, but he’s our son of a bitch.” What is ironic is the fact that President Obama has made a partner of Uhuru Kenyatta of Kenya, a man on trial on various counts of crimes against humanity before the International Criminal Court, while not even extending an invitation to attend the Summit to Robert Mugabe (or alternatively pushing for Mugabe’s indictment by the ICC).

The U.S. has even intervened to right government wrongs and vindicate human rights violations in individual cases. In 2012, President Obama signed an important piece of legislation known as the “Sergei Magnitsky Law”  and “imposed sanctions on persons responsible for the detention, abuse, or death of Sergei Magnitsky.” Magnitsky, a Russian lawyer, was arguably the greatest corruption fighter in recent Russian history. (See my commentary “Will the U.S. Stand by the Side of Brave Africans?”) Ten Russians were singled out for asset seizures and banned from traveling to the United States for their role in the Magnitsky’s death in 2009. But there is no equivalent of  a “Sergei Magnitsky Law” for Africa! Why is that?!?

The fact of the matter is that thousands of Africans are tortured and killed by African regimes every year and the President turns a blind eye, deaf ear and muted lips. In fact, President Obama has made these torturers America’s partners and become blind to their crimes and deaf to the bootless cries of their victims. Hundreds of certified regime criminals against humanity and their wives from Ethiopia and other African countries swarm the American homeland like desert locusts every year with impunity.

Don’t want to rain on Cirque d’Afrique

I really hate to rain on the African Circus in Washington, D.C. It is not my intention to bash African “leaders”. I would rather sing their praises and trumpet their achievements. But crimes against humanity are not much of an achievement to brag about.  Is it possible to make democrats out of African dictators? Is it possible to squeeze blood out of turnip? I do not believe it is possible to civilize a thug. It is t is true that no one is born a thug, but once a thug, always a thug. You can take the thug out of the bush, but you can’t take the bush out of the thug. You can put a thug in a designer suit, give him a fancy title, hand him a fancy briefcase, shuttle him in a fancy limo, put him in a fancy hotel and talk to him about good governance until you are blue in the face. He will just laugh at you and walk away. I do not doubt for a second that those African “leaders” talked trash (that is “thugspeak”) about President Obama once they returned to their hotel rooms and on their flight home.

I have taken a vow to speak truth to thugs who abuse and misuse power in Africa. I also know that African thugtators do not give a rat’s behind about the truth, human rights or anything I have to say. But as I have always said, preaching the truth, the rule of law, human rights and so on to African thugtators is like preaching Scripture to Heathen or pouring water on a slab of granite. But I am comforted by the Chinese saying, “Dripping water penetrates the stone.” Of course, I am painfully aware that may not apply to the stone-hearted.

Africans must challenge the fairy tale of African development and investment

Africans, particularly African intellectuals, should fully engage in the debate and examine the data and evidence on whether Africa is “rising” and on “brink of an economic take-off, much like China was 30 years ago.” In 30 or so years, Africa’s population will more than double to 2.4 billion. The African labor force will be larger than that of China or India. Given current trends, Africa will also be at the bottom the Oxford Poverty & Human Development Initiative and at the top of the Failed States Index. Today, 6 out of the top 10 and 18 out of the top 25 “most failed states on earth” are found in Africa. By 2050, how many African states will top out the Failed States Index?

The narratives of “Africa Rising” and “African development” underplay, understate and overlook the pandemic corruption, the crushing debts and the fatal addiction of failed African states to Western aid and loans. Africans are fed the baloney that Africa can escape underdevelopment and achieve “growth and transformation” by exporting agricultural commodities, raw materials, metals and minerals. African intellectuals, particularly African economists, must close ranks and fight the propagation of this baloney.

Will jobs at Coca-Cola bottling plants and the creation of an army of Coke peddlers in Africa create enough jobs to absorb the millions of youth looking for work? Will Marriott Hotels provide enough jobs bell hopping and hotel “maiding” to create the foundation for African development?

The first rule of propaganda is, “If you repeat a lie often enough, people will believe it.” That is why it is necessary to speak truth to lies often enough so that lies are not mistaken for truth. The conspiracy of lies about African “development” and “investments” must be exposed for what it is: A Grand Deception. Benjamin Disraeli is reported to have said, “There are lies, damned lies and statistics.” The lies about Africa’s double-digit growth as told by African “leaders” are boldfaced lies. When they are repeated by the donors and loaners, they become damned lies. When they are parroted by the mindless international media, they are just statistics.

I think the guy who stole the show at the Summit is Mo Ibrahim, the Sudanese telecommunications tycoon. Mo knows:

I’m actually a little bit amazed that all those Africans I met on the plane … are coming all the way here to America to tell the very smart, well-informed American businesspeople that ‘guys, you know what, there is a good opportunity in Africa’. They should do some homework. Everywhere in Africa there are Chinese businesspeople, there are Brazilian businesspeople. None of us went to Brazil, or to Asia or to China to tell them, look, come and invest in Africa. They found out themselves and they come and invest. That’s how basic business people behave. Why do we need to come and inform these misinformed American businesses? You know, you guys invented Google. Use it please.

I wish I had Ibrahim’s capacity and proclivity for humor. I know I sound angry as hell when I write about the lies about African “development” and “investment” when so many Africans are suffering in abject poverty. But I have every right to be angry because I am sick and tired of Africa and Africans being treated like a five-dollar hooker by the West and the East.

The facts and evidence show that Africa is not the “fastest growing continent”; it is fast-talking poverty pimps and their corrupt partners in Africa who are perpetuating that hoax. The only way Africa will rise — the only way it will develop and become self-sufficient —  is with the blood, sweat and tears of Africans. That is an undeniable and eternal truth!

In the first of my three part commentary on the “U.S.-Africa Leadership Summit”, I announced that the “African Circus is coming to town.” I am now glad to announce that Cirque d’Afrique has left town. Good riddance to the circus clowns! I am pretty sure the ringmaster is also glad to see the clowns leaving town.  I am eternally optimistic that one day the U.S. will take the same position against state terrorists as it has taken against “street” and “bush” terrorists: “America does not partner with state terrorists and thugs in designer suits with brief cases full of cash handouts from American taxpayers.”

“I’m uncomfortable, frankly, with the hype about Africa. We went from one extreme … to, like, Africa now is the best thing after sliced bread.” Mo Ibrahim at the first U.S-Africa Summit.


Professor Alemayehu G. Mariam teaches political science at California State University, San Bernardino and is a practicing defense lawyer.

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