Date: Tue, 8 Jul 2014 23:18:26 +0200
The Illusion of Foreign Investment Growth? Africa Must Break With the World
Capitalist System
People want genuine development as demonstrations, strikes spread across
continent
By <http://www.globalresearch.ca/author/abayomi-azikiwe> Abayomi Azikiwe
Global Research, July 08, 2014
Africa-FDI-Western-Investment
How long and deep can the current character of Foreign Direct Investment
(FDI) penetrate the social legacy of colonialism and neo-colonialism in
Africa? Proclamations of economic growth throughout the continent are being
received with much skepticism and consequently prompting the desire among
many to address the persistent poverty, inefficiency and growing class
divisions.
In a recent report issued by the United Nations Conference on Trade and
Development (UNCTAD) entitled "Catalyzing Investments for Transformative
Growth in Africa," it reveals that the rate of FDI in Africa is
significantly lower than what exists in other so-called developing regions.
These figures indicate that the reliance on western capital to fuel growth
and development absent of a program for national reconstruction, will not
work.
According to Ghana Web "Africa's investment rate is low compared to the
average for developing countries and relative to what is considered
necessary to achieve development goals, the 2014 Economic Development in
Africa report ha established."
Therefore based on an annual average,
"the investment rate for Africa was about 18 per cent over the period
1990-1999 as compared to an average of 24 per cent for developing economies
as a whole. The report said similarly, in the period 2000-2011, the average
investment rate for Africa was about 19 per cent as compared to 26 per cent
for developing economies generally. "
These statistics could represent a lag in overcoming the development
challenges which have been imposed by colonialism and neo-colonialism.
Nonetheless, the consistently expanding oil and natural gas industry in
various regions of Africa should translate into higher levels of investment
as well as growth rates being discussed in the financial media.
Other factors may also include unresolved and burgeoning civil conflicts and
inter-state border disputes. The Boko Haram insurgency in the northeast of
Nigeria has led to the intervention of United States intelligence and
military interests.
Since late 2010, the North African nations of Tunisia and Egypt have not
stabilized economically since the uprisings in those states. The Horn of
Africa country of Somalia and the eastern regional state of Kenya are both
embroiled and inter-connected in a counter-insurgency campaign with the high
level interventions of the Central Intelligence Agency (CIA), the Pentagon
and the European Union (EU).
All of these factors influence whether or not Africa will achieve genuine
development or merely economic growth that does not fundamentally alter the
international division of economic power and labor. If Africa cannot
effectively stabilize its own internal situation then no one can honestly
say that actual progress is being made which is sustainable.
Events in several African states clearly make the case for re-examining the
notion of western investment-led growth. From Southern Africa to the West
African state of Ghana and the North African country of Egypt,
socio-economic problems are escalating requiring a new approach to the
organization of society and its economic structures.
NUMSA Organizes Largest Sectors Strike in South Africa
On July 1 the National Union of Metalworkers of South Africa (NUMSA)
embarked upon a strike which is demanding a 15 percent across the board pay
hike and a R1000 housing allowance. Representatives of the National
Employers' Association of South Africa (NEASA) said that talks with NUMSA
leaders on July 4 failed to reach an agreement on their economic demands.
The industrial bosses affected by the NUMSA strike and other labor unrest in
South Africa can only respond to workers' demands through threats of mass
lay-offs and capital flight. The ruling African National Congress (ANC)
fresh from another majority victory in the national elections of May 7, does
not have control of the major industries inside the country and therefore
cannot impose a settlement that would raise wages and improve working
conditions for employees.
NUMSA pointed out that the metal industry has shed 250,000 jobs in the last
five years in South Africa. The bosses utilize this fact, which is a direct
result of the world capitalist crisis of overproduction internationally, to
rationalize the wiping out tens of millions of jobs throughout the globe.
According to CEO Gerhard Papenfus of the industrial owners' group NEASA "The
metal industry and South Africa face extremely difficult challenges. On the
one hand there are workers who struggle to make ends meet and on the other
hand SMMEs (small, medium and micro enterprises) simply cannot meet workers'
wage expectations." (Citizen, July 7)
Papenfus continued saying "Unless we find ways to break the chains on this
industry, as NEASA is proposing, the future of manufacturing in South Africa
is bleak. We will not be party to any agreement responsible for the further
destruction of the industry." (Citizen, July 7)
Ghana: Occupy Flagstaff House
The West African state of Ghana has been championed over the last several
years for its phenomenal economic growth. With the discovery oil and the
country's vast deposits of gold and other strategic minerals, foreign
investment has poured into the state which was a pioneer in the African
liberation movements during the post-World War II period.
Ghana's first prime minister and president Dr. Kwame Nkrumah led the former
British colony in its positive action campaign of the early 1950s creating a
coalition government resulting in full-independence in 1957. In 1960 Ghana
became a republic. However, the Nkrumaist program of Pan-Africanism and
socialist development was overthrown at the aegis of the CIA and
international finance capital in early 1966.
Although the ruling National Democratic Congress (NDC) under President John
Mahama is considered more progressive than the main conservative opposition
forces of the National Patriotic Party (NPP), both political formations
remain trapped in the dominant world system of capitalism which places the
interests of corporations and banks far ahead of those of workers, farmers
and youth. At present there are burgeoning economic issues impacting Ghana
including high unemployment, fuel shortages and a lack of confidence in the
current political dispensation.
A so-called Occupy Flagstaff House (presidential headquarters) demonstration
was held in conjunction with Republic Day on July 1 which brought out
hundreds of disgruntled mainly middle class Ghanaians. Officially the
organizing group known as the Concerned Ghanaians for Responsible Governance
(CGRG) was not connected with the opposition NPP, despite the claims made by
supporters of the NDC government.
In a report published in the Ghana media
"The CGRG on July 1, Republic Day organized the Occupy Flagstaff House
demonstration that saw about 300 largely middle class people who defied
rainfall to march in protest at what they described as the worsening
economic conditions in the country. The demonstration which was almost
disallowed by the police finally came off under heavy security presence.
[The government] Chief of Staff who accepted a petition on behalf of the
president assured the demonstrators that their request will be duly
addressed." (myjoyonline.com, July 4)
Coinciding with the CGRG demonstrations outside Flagstaff House were
complaints regarding huge delays in fuel purchases for motorists. In a
country which is an emerging oil-producing state such bottlenecks reveal
serious issues within the infrastructural development of the country.
Other problems are surfacing in the education sector where the Ghana
National Association of Teachers (GNAT) has warned the Mahama government to
keep its hands off their pension fund. The group opposes the restructuring
of the pension system through the appointment of a so-called "fund manager".
These problems with the sustainability of public pensions are reminiscent of
the crisis facing Western European and U.S. systems where major struggles
are emerging over the purported under funding of these schemes. Nonetheless,
the capitalist governments throughout the world promote the rising
profitability of banks and other corporations and this is usually manifested
in the worsening conditions for workers, farmers and youth.
Egypt: The Military President and the Rising Cost of Fuel
With the conclusion of a controversial election in Egypt during June, the
military leader turned head-of-state Abdel Fattah al-Sisi has assumed office
amid a monumental boycott by opposition forces at the polls. Immediately
Al-Sisi was invited to address the recently-held African Union 23rd Summit
in Malabo, Equatorial Guinea despite the deaths and imprisonment of
thousands of Muslim Brotherhood supporters and other opposition forces since
July 3, 2013 when the army formally retook control of the state.
Those who hailed the seizure of power by Gen. Al-Sisi last year claimed that
the military intervention amid the June 30 protest actions constituted a
"second revolution." However this second revolution comes at an enormous
price to the Egyptian masses.
One aspect of this new political arrangement is the announcement by Al-Sisi
on July 4 that the price of fuel would be raised by 78 percent. This is the
direct result of the reduction in fuel subsidies which constitutes 25
percent of the national budget.
Al-Sisi asked Egyptians to sacrifice in light of his austerity measures that
are in line with the international financial system which is imposing higher
prices and lower salaries on workers throughout the world. Prices for
electricity usage also rose at the beginning of the month.
Africa Must Break With the World Capitalist System to Achieve Real Growth
and Sustainable Development
These events in the three above-mentioned African states provide glaring
examples of the ongoing economic crises taking place on the continent. With
Africa firmly integrated into the international financial order of labor and
mineral exploitation at the expense of the much-need improvements in the
salaries and living conditions of the majority of people, there is almost no
potential within the existing political arrangements for substantial
advancements in the socio-economic status of the workers, farmers and youth.
The rising expectations of working people related to the FDI-led policy
orientations will undoubtedly prompt social unrest through strikes, mass
demonstrations and other forms of resistance. If the notions of phenomenal
growth within the neo-colonial African states cannot produce hope for the
people then the much coveted political stability will remain unrealized.
Considering the tremendous reservoir of oil, natural gas and strategic
minerals in Africa, there is no reason for the continent to remain trapped
in the cycle of economic dependency on the imperialist states. Resources
which belong to Africa must be effectively utilized for the betterment of
the people.
This much-needed shift in economic and political policy formulation and
implementation must take place within a continental socialist framework. If
there is no serious effort to foster and mandate the equitable distribution
of wealth and power, then the AU member-states will surely fail in their
mission to accelerate the living standards on the continent.
The reported discussions about an African Monetary Zone and military Stand
by-force cannot be implemented until the extraction, trade and distribution
of resources of the continent can serve to benefit the still-impoverished
masses. As long as African leaders look to the West for direction and fair
treatment the existing class divisions will accelerate precipitously and the
unity of the continent under socialism remains a far distant objective.
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