"The Scramble for Africa and the Marginalization of African Capitalism"

“The Scramble for Africa and the Marginalization of African Capitalism” in A New Scramble for Africa?: Imperialism, Investment and Development (2009)

Roger Southall of the University of Witwatersrand and Alex Comninos, a researcher in South Africa make quite a compelling argument about the role of African capitalism in fostering development. They take issue with the perspective of the state as the primary vehicle for development, stating that African capitalists have tended to receive the brunt of criticisms and suspicion, mainly because they were threats to the state for power. Post-colonial elites that emerged were primarily through state employment rather than the private sector. “The emergent bougeoisie, managerial rather than capitalist, was therefore from this perspective pursuing rent rather than profit….” (358). They use Colin Ley’s argument in support of the development and further strengthening of indigenous capitalists, but argue that even in post-colonial Kenya, indigenous capitalists were “subordinate and auxiliary” to multinational capital. Others argue that Indian Kenyans were the largest contributors to Kenya’s capital growth while indigenous capitalists remained overly state-dependent.

The authors write: “Parastatals increased in number and scope, invading economic territory previously dominated by colonial companies, and were able to pose a more significant challenge to multinationals than weak national capitalist classes (Tangri 1999).” Aid and debt only served to strengthen the state. Later insistence upon the privatization of the state increased dependence on foreign direct investments. “The outcome was not a significant diminution of African economic sovereignty, but the adjustment of states to a comprador role on behalf of global capital by providing physical security and access to local resources and markets (Amin 1990)” (357). Privatization meant further bloating politicians and state bureaucrats and further prevention of creating a dynamic African capitalist class.

However, as the authors point out, there is great hope in the future. The hope lies in the new generation of African entrepreneurs. Most of these members are business persons, relatively young (20s to 40s), and trained in US and Europe. Seventy percent owned firms in the service sector and 16 percent owned manufacturing firms. They are interested in economic and political reforms and embrace “profits not profiteering”.

The authors emphasize the importance of black empowerment companies backed by the government. The telecommunications sector, they argue, is where indigenous capitalist firms have been thriving and will continue to expand. I believe that Chinese telecommunication firms may prove to be a vehicle of entrepreneurial, innovative activities for the next generation of Zambians. The authors attribute the success of the telecommunications sector to four factors:

1) “the exploitation of market opportunity at the right time by a number of African venture capitalists, albeit backed by a combination of state, private and multinational capital”
2) “dismal state of fixed line and telecommunications infrastructure in Africa, largely dominated by state-owned utility companies”
3) “liberalization and privatization of the telephone market, allowing for private sector expansion that bypassed incumbent fixed line operators and”
4) “the availability of rapidly advancing telecommunications technology”

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