Architects of poverty: why African capitalism needs changing, by Moeletsi Mbeki, Johannesburg, Picador Africa, 2009, 196 pp., R135 (paperback), ISBN 9781770101616
Moeletsi Mbeki's book is a critical contribution which seeks to disentangle some of the reasons Africa remains less developed (while Asia forges ahead), or, in his words, why ‘Africa is marking time at best, and, at worst, marching backwards’ (p. 3). While he acknowledges that reasons for Africa's limited progress on the development stakes are very complex and stretch through various historical epochs, Mbeki identifies a number of them for critical reflection. His point of departure is that ‘the problem with Africa is that it is still locked in the mercantile stage of capitalism’ (p. xi). The continent is failing to modernise, and failing to industrialise and achieve post-industrial status. Africa's political elite (the powerful) – who are meant (ideally) to drive Africa's development – seem not to learn (or care) that mercantile capitalism is a road to nowhere. This mindset of the political elite has its roots in the nature of narrow African nationalism; itself one of the causes of Africa's economic problems. It is so because, despite narrow African nationalism's parade (or pretension) as a broad-based movement fighting for everyone's liberation, the movement was in fact a small grouping of Westernised black elites who fought ‘for inclusion in the colonial system so that it, too, could benefit from the spoils of colonialism’ (p. 6). Consequently, newly independent African states were not economically transformed, instead colonial economic inequalities such as those implicit in the exploitation of resources and of the black masses were entrenched by the new black ‘liberation’ governments. This is a compelling argument by Mbeki, however, not all will agree or find his assertion that liberation struggle leaders were an elitist, self-centred, conspicuous-consumption class entirely convincing. Such an argument unfairly disparages a genuine liberation, racial equality and democratisation agenda that motivated and inspired many African nationalists to resist colonialism.
Admittedly, Mbeki's incisive criticism of postcolonial Africa's ruling political elites in pushing their countries' economies backwards will find many backers, with the IMF and the World Bank – the main protagonists of this argument – part of that line of thought. He makes the point that Africa's ruling political elites – in collaboration with Western powers – have massively mismanaged Africa's economic surplus. They exploit their strong position in relation to the private sector, undertake half-hearted, loss-making industrialisation projects and transfer vast amounts of economic surpluses generated by agriculture and extractive industries to developed countries as capital flight (p. 9). Through, for example, taxation systems, political elites also use their control of the state to extract surplus or savings from peasants and divert these to finance their own consumption and to strengthen the repressive instruments of the state. Multinational corporations – including the mighty Western oil companies – partly fuel political elite corruption and consumption through bribes and huge payments into foreign private bank accounts. This elite and state consumption is import driven; hence it is not a catalyst for local productive investment. Nigeria, Libya, Algeria and Angola (all oil rich) are graphic illustrations of how surplus is misappropriated to fund elite conspicuous consumption while the rest of the population languishes in poverty. In other parts of the world such elite excesses would be resisted and the perpetrators removed from power; but part of the problem in Africa is that there is a leadership crisis: Africa has failed ‘to produce the type of leaders required to take society forward in an ever-changing global environment’ (p. 34).
Quite rightly, Mbeki is careful not to paint a misleading picture of investment flows in and into Africa. He correctly observes that there continues to be new investment in petroleum, other extractive industries, mobile telecommunications and in some tourism and retail infrastructure. An interesting development is the entrance of new investors from South Africa, Mauritius, and corporations from Asia and Latin America. While this is encouraging, the problem is that most of these new investments are not in manufacturing, suggesting that local manufacturing and productive capacity remains under funded with obvious negative consequences for the continent's development agenda.
Given this myriad of problems, Mbeki asks pertinent questions: How can Africa meet its development challenges in current political circumstances? Is a new middle class emerging in Africa that can provide the leadership required to drive the continent's industrial and agrarian revolutions in the face of foreign interventions that foster the continent's traditional role in the world economy as a source of raw materials and cheap labour? He justifiably observes that one of the key factors which will determine the continent's path and level of development is the degree to which it is able to reassert control of its own political, economic and social policies from foreign multinational corporations, multilateral financial institutions, foreign state and non-state players such as donors and creditors (pp. 144–145). This has to be done in conjunction with market structural transformation that reforms the nature of Africa's current integration in world markets so as to create enabling conditions for Africa to exploit world markets to develop its own industries. At the same time, policies that promote investment in social capital (health, education, housing etc.) and capital accumulation must be promoted throughout Africa as has been done with phenomenal developmental success in Mauritius. There must also be a practical shift in the way economic surplus is spent in Africa: it should be directed towards productive investment rather than financing elite private consumption and the running of largely unaccountable states. While acknowledging that the New Partnership for Africa's Development (NEPAD) Peer Review Mechanism can partially address some of the worst excesses of political elites, Mbeki is sceptical of its capacity to drive economic development. Frankly, it would be too optimistic to expect NEPAD to regenerate and spearhead Africa's development. Its poor delivery record since inception needs no emphasis.
Reforming Africa's ‘style of democracy’ does not escape Mbeki's scrutiny. He observes that if Africa is to develop, it needs a new type of democracy – a democracy that will empower the region's private-sector producers (including peasants), and restore the growth of an independent and productive middle class as well as facilitate the development of autonomous civil-society institutions (p. 160). There are foundations of this new type of democracy being laid in Southern Africa; e.g., a young promising democracy in South Africa, the emergence of the Movement for Multi-Party Democracy (MMD) in Zambia and a bruised, battered Movement for Democratic Change (MDC) in coalition government with its nemesis ZANU-PF in Zimbabwe. These are promising democracy-oriented political developments, but they are happening at a small scale. For widespread ‘democratic’ political change to occur there is need for a complete change of mindset among Africa's political elite. They have to stop being ‘parasitic on the limited productive capacity in their countries’ and develop a sense of ownership of their countries rather than viewing them as ‘cash cows that enable them to live extravagantly on imported goods and services as they attempt to mimic the lifestyles of the colonialists’ (p. 174).