Nations roll up for another era of plunder and exploitation in Africa

Padraig Carmody

WHEN is a nation’s wealth not its wealth? When are its natural resources the subject of a looting order issued in some boardroom halfway across the world? Just ask Zambia.

In 2004 the country’s most important copper mine, Konkola, was sold to an Ango-Indian company Vedanta Resources. As part of this marvellous deal, for an asset producing 65% of the country’s mineral wealth, the Zambian government received a 0.6% royalty rate. This is normally in the region of 10%. The Zambians thus received $12m from the $2bn worth of copper ore extracted in 2006. But — in Africa there has to be a but — when tax write-offs for new investment were calculated, the effective taxation rate on copper production in Zambia was nil. And the unseen hand in this transaction that would make Beelzebub gnash his teeth in envy? The World Bank.

In 1884, Britain, France, Germany, Italy, Portugal and Belgium met a conference in Berlin to settle their arguments over Africa. The common metaphor to explain what happened was that the great powers sliced up the continent like a cake. It was more like locusts on speed devouring a wheat field. In Thomas Pakenham’s masterly study of the horror story, the Scramble for Africa, the European powers were described as systematically destroying country after country in a continent where they invented most of them — witness the straight lines of borders.

Now Carmody has updated the story 127 years later. Surely it’s not still going on? We’ve had African independence, the Nelson Mandela era in South Africa, the relative success of Ghana to name a few bright lights. Well, sit back and relax as Carmody brings us on whistlestop tour of the dark continent. This is only the beginning.

The continent’s resources are manifold. It possesses 42% of the world’s bauxite, 38% of its uranium, 42% of its gold, 73% of its platinum, 88% of its diamonds and 10% of its oil. Ah, if only it had none of this — how much richer it would be.

In the Congo, for example, where 10 million people were killed during Belgian colonisation, the destruction of population has begun all over again. This time the war is not over rubber but a product known as coltan. And the Democratic Republic of Congo has 80% of the world’s reserves. Except in the ensuing wars for this and other riches played out in the arena by proxy interests, millions of more people have died.

This is just one illustration of rapacious greed by western and now eastern, countries in the pitiable continent. Forest resources are being rapidly depleted. Much of the raw material is shipped to China where cheap furniture is then sold back to Europe.

Carmody argues the new scramble for Africa is motivated by the tension between an expansionist global economy and the fixed amount of natural resources available. But there is another key point and that is labour. Multinationals seek out low-cost labour sites for assembly operations to reduce costs and raise profits. Hence, China for example has huge numbers of its citizens working in African countries.

Subsidised imports can often devastate an economy or a sector of that economy. In Ghana, 97% of poultry is now imported. The imports are heavily subsidised by the EU and have “dramatically displaced domestic production and affected about 400,000 farmers”.

Carmody demonstrates the new scramble is implicated in the development of certain conflicts. In Nigeria, for example, 80% of the hundreds of billions of dollars in oil revenue accrued to only one per cent of the population. That disparity that has caused huge social unrest.

China is cited as one of the main players in the new Africa. The Chinese economy has grown by about 10% a year for the last 30 years. Its insatiable diet sees it consume 33% of world steel output and 40% of cement. Ten of the 11 biggest Chinese oil fields have passed peak production and 31% of its oil now comes from Africa. Though China has military agreements with 25 African countries it has opted for “soft power” where it leverages advantages from not having been an imperial power.

Then there are the old reliables Britain and France. According to the former president of Gabon, Omar Bongo: “Africa without France is like a car without a driver. France without Africa is like a car without fuel.”

Historically interventionist in much of west Africa, the economies were linked to the franc for decades and preferential investment opportunities for French companies were obvious.

Development aid is often tied to conditions such as in Tanzania where British aid was linked to a demand to privatise water utilities which could then be tendered for by the likes of Thames Water.

But there are others, not least India, Russia, Malaysia and even Turkey who are rushing to Africa to grab what they can in a stampede that would make the great wildebeest migration look like a stroll in the park.

The US position on Africa can be summarised in quote from Carla Hills, who was George W Bush’s trade representative: “The US should pry open countries with a crowbar so that our private sector can take advantage of them.” And in regard to the increasingly competitive pillaging on the continent, former commerce secretary Ron Brown has warned: “The US is not going to give away African markets to the old colonial powers.”

Production and readability of this book could be improved a lot. The author’s habit of making an acronym of terms is irritating — eg Sub-Saharan Africa (SSA); global production network (GPN); floating production and offshore floating vessels (FPSOs). Get a few of them in a sentence and it is like reading computer code.

Carmody’s tone is not moralistic. Just a procession of facts and conclusions. A cataract of catastrophe. What Pakenham does for literature, Carmody achieves in scholarship.