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  • Theophilus Wellington

Neo - Colonialism: Imperialism, Class conflicts and #ENDBADGOVERNMENT




“All are our crops; but we get from others

To middleman those are not from others.

Yet they show them our jam-packed granary.

Faces of our decrepit doctors,

Inspiration of our lawyers,

All go into their possession”-

Jibonanonda Das.



Africa is wallowing in extreme poverty, deep in debt, hunger, diseases, illiteracy and civil strife. Many often whisper with longing in their faces, that the conditions in Africa are in fact, far worse today than they were at the end of colonialism. There is an increasing nostalgia for the colonial times. This essay, whilst agreeing economic conditions are far worse now than during colonialism, argues that colonialism is not over as such, it has merely transformed and taken a new shape.


There are many arguments as to the causes of the current economic crisis in Africa, from underdeveloped human resources, to the oil crises of 1973-4, to inheritance of poor economic systems and trade practices etc. However, what seems to be the winner of these arguments is bad governance. From development theories, to political analysis, to street market discussions on the continent, the current situation in Africa is solely blamed on bad government. Whilst this essay does not deny that African elites engage in wrongdoings such as, corruption, nepotism and human rights abuses. It asks us to acknowledge and contextualize instances of mal-governance, with how external powers often enable (and encourage) such actions to preserve lucrative economic and political arrangements.



This essay compares the methods of neo-colonialism in Anglophone and francophone countries. In these countries, their former colonial powers, Britain and France, still influence these colonial states' economic and political means. However, the two colonial powers differ in their methods. Britain relies on postcolonial infrastructures and concedes much influence to the United States, essentially through international financial institutions. France on the other hand, directly structures her control either through the military, agents stationed in financial institutions and education structures, or monetarily. This essay focuses on Structural Adjustment Programs in the Anglophone countries and examines the effects of the Communautės Financières d’Afrique Franc (CFA) on Francophone countries. The British approach is conceptualized as soft-neo colonialism, and the French as coercive neo colonialism.



NEO - COLONIALISM


‘We pray that our African brothers have not freed themselves of European colonialism only to be overcome and held in check now by American dollarism...Don’t let American racism be legalized by American dollarism’-Omowale Malcolm X

From the end of the nineteenth century onwards, colonies had been regarded as a source of wealth that could be used to mitigate the class conflicts in capitalist states. However, this ultimate aim could not be achieved because “pre war capitalist states were so organized internally that the bulk of the profit made from colonial possessions found its way into the pockets of the capitalist class and not those of the workers”. Far from achieving the objective intended, the working-class at times identified their interests with those of the colonial people, threatening the imperialist powers as they began to face conflict on two fronts. Post world wars, there was a difference in colonial policy, there was a deliberate attempt to convert colonial earnings from the wealthy and use them generally to finance the “welfare state”. It was assumed this objective would be achieved by maintaining the pre-war colonial system. However, experience proved attempts to do so would be disastrous and result in colonial wars, thus the system of neo colonialism was instituted.


Neo colonialism of today represents imperialism in its final and perhaps its most dangerous stage. The essence of neo colonialism is that the state, which is subject to, is, in theory independent and has all the outward trappings of international sovereignty. However, in reality its economic system and thus its policy is directed from outside. It is “the worst form of imperialism: for those who practice it, it means power without responsibility, and for those who suffer it, it is exploitation without redress”. However, predominantly, neo colonialism has no definite definition, it has western, Asian and African versions of the definitions. In Encyclopedia Britannica, the worldwide-accepted knowledge book, neocolonialism was defined as the “control of less developed countries by developed countries through indirect means”.


Neo colonialism, like colonialism, is an attempt to export the social conflicts of the capitalists’ countries. The temporary success of the policy can be seen in the ever-widening gap between the richer and poorer nations of the world. For example, in an extreme case the troops of the imperial power may garrison the territory of the neo-colonial State and control the government of it. More often, however, neo-colonialist control is exercised through economic or monetary means.

The result of neo colonialism is that foreign capital is used for the exploitation rather than for the development of the less developed parts of the world, investment under neo colonialism increases, rather than decreases the gap between the rich and the poor countries of the world.



  1. Neo colonialism in Anglophone countries



“To toy with the lives of millions of people, the millions of children who will be deprived on education and health facilities, the millions of people who have been out of jobs- who will accept responsibility for that? And yet we continue to experiment. Why should we turn Africa into a laboratory? Why don’t we agree that the African problem is one of fundamental restructuring? It is not wholly economic, it is partly political, partly social.”- Adebayo Ayodeji


The World Bank and the IMF, jointly known as the Bretton Woods institutions, were created in 1944 with an aim to rebuild the economies that had been affected during the Second World War. The original plans included an international trade organization, however it was not until 1995 that the world trade organization (WTO) was formed. The IMF was created to establish a stable climate for international trade by harmonizing its member’s monetary policies and maintaining exchange stability. It would also help to provide temporary financial assistance to countries encountering difficulties with their balance of payments. The World Bank on the other hand, serves to improve the capacity of countries to trade by lending money to war ravaged and impoverished countries for reconstruction and development projects. It is key to note that in 1944 none of the colonized African countries had attained independence, hence, were never intended beneficiaries of this “grand plan”.


Contemporarily, the World Bank is the largest public development institution in the world, lending around $25 billion a year to developing countries for the financing of development projects and economic reforms. It consists of 183 member countries, including 47 in sub Saharan Africa. A board of directors whose voting powers are based on their financial contributions governs the bank. In essence the higher your financial contribution, the greater say in the Banks decision-making process. The USA holds 20 percent of the vote and is represented by a single executive director, whilst the 47 sub Saharan African countries in contrast, have 2 executive directors and only hold 7 percent of the votes between them. It is evident from the onset that the board’s decisions are not likely to favor the poorest members, which are in Africa.


Most African countries were in debt as soon as they gained independence. Currently, except for North Africa, the rest of the African countries combined owe more than they make. African debt is the biggest hindrance to any possible solution to the overall economic crisis. This is ironic because the purposes of these loans are to help alleviate economic hardships in the receiving countries. African countries spend most of their annual revenue servicing the loans, money that could go quite a distance in developing their economies.


Structural Adjustment Programs (SAPs) were prescribed for Africa in the 1980s when it became apparent that there was an economic crisis looming over Africa. They were introduced to enable African countries to repay their debts and improve their economic structures; the IMF and World Bank imposed SAPs.


SAPs are modeled on neo-liberal ideology that the optimal economic system is achieved by giving free reign to market participants, privatization, free trade and the reduction of government intervention in the economy. Structural Adjustment Programs became preconditions to new loans from the World Bank and renegotiations of current debts. However, these policies over the years have not alleviated the huge debts of African countries, nor improved their economies. If anything, “poverty in African countries has increased as a direct result of these policies”.

What are some of these policies?

  1. Privatization of government enterprises and decreased government spending

  2. Liberalization of trade and lifting of import and export restrictions

  3. Increased interest rates

  4. Devaluation of currencies


Privatization of government enterprises is understood to curb huge government budgets and deficits, essentially freeing up money for African repayment of loans. However, privatizing government enterprises cannot be done on large scales “swoop” as prescribed by the IMF/World Bank. There are many hindering factors such as the lack of local private capital and entrepreneurs to take over huge corporations. This opens the gates to foreign investors who ultimately prioritize profits over reinvesting locally to promote growth, resulting in massive layoffs and pay cuts. More importantly, reduced government expenditure robs the citizens of social welfare services like health and education. Social services, such as health and education cannot be run with profit as the aim. It must be noted that unproductive sectors like the military sector rarely undergo budget cuts.


Liberalization of trade is aimed to create market based pricing, enabling exporters to get better prices for their products and make available more affordable alternatives from abroad. Nevertheless, it mostly leads to dumping of cheap products. This further undermines the local industries that produce or those that would have started to produce these products. New start-ups usually need nurturing and protection at early stages, i.e. a new fabric manufacturing plant in Ghana will not be expected to be as efficient as an established manufacturer in China, hence, cannot compete equally. Hence, African infant industries fail to take off under extensive trade liberalization.


Increased interest rates are meant to encourage savings and investment in the capital market. However, this makes capital inaccessible to local and small businesses, which are fundamental in growing economies.


Lastly, devaluation of currencies is assumed to increase self-sufficiency by making imported products more expensive and exports cheaper. In essence, exporters get more money for their products, whilst external buyers are more able to afford African exports. Nonetheless, local industries still rely on imports like fuel and machinery thus, their production costs increase accordingly and commodities become more expensive locally. In addition, developed countries set quotas on how much can be imported or have fixed prices on foreign currencies to shelter their own producers from foreign competition. It should be noted that the same protectionist practices being abolished by SAPs are practiced by the USA and European Union. Examining Nigeria, the West Africans currency has been devalued twice since March 2020, with another devaluation in talks as the World Bank withholds $1.5 billion until the government implements “currency reforms to attract business”. It is also pertinent to note that this same World Bank declared in June 2020 that Nigeria is undergoing the worst recession in four decades; ironically corresponding with the time SAPs were prescribed by the World Bank.


None of the countries, even those that implemented SAPs religiously have improved their economic situation till date. In 1994, the World Bank admitted that out of the 29 countries that it had provided more than $20 billion in funding to sponsor Adjustment Programs during the ten-year period, 1981-1991, only 6 had performed successfully, subsequently this number shrank to only 2 countries. By 1995, Ghana, the World Banks’s poster child for SAP, was on the list of heavily indebted poor countries. In 1998, the World Bank identified four new countries, Guinea, Lesotho, Eritrea and Uganda as the new success stories for the success of SAPs. In less than 2 years, this number had shrunk leaving Uganda as the only success story. As it turned out, accolades were premature. Uganda’s rate of economic progress is unsustainable. About 55% of its budget is aid financed. Different African countries have had different scenarios but the same story played over and over from one century to the next. After structural adjustments all countries in Africa became worse off than when they had started.





Case Study of SAP in Nigeria

The civilian administration headed by Shehu Shagari first introduced SAP into Nigeria. Thus whilst the country earned over N43 billion from the sale of crude oil alone between 1979 and 1983, its foreign debt rose from N1.5 billion to 10.2 billion in this same period. The Babaginda administration removed the last bottlenecks and fully implemented SAP in Nigeria. This included the devaluation of the naira, trade liberalization, privatization etc. This was done despite the anti IMF sentiment in the country due to the conditionality on these loans.


Devaluation in Nigeria has led to the steep rise in costs of debts servicing by companies, this in relation with huge additional debts from banks and rising interest rates, has crippled many firms, leading to mass closures and cutback of workers. Through privatization and debt equity conversion, the government has been handing over the economy almost wholesale to foreign interest. The vast majority of Nigerians do not have the money to buy shares in these companies; hence foreign firms and their local allies have been the main buyers. Trade liberation has led to the dumping of cheap and highly subsidized foreign goods on the Nigerian market leading to mass closures of factories and further sacking of workers.


The Manufacturers Association of Nigeria (MAN) has since recognized the failings of SAP. Initially one of strongest defenders for SAP, they carried out a survey of industrial performance in the first half of 1987 and stated the tight fiscal policies that SAP embody is stifling industries, and has led to the contraction of the domestic market and given rise to low sales, with unsold goods overflowing in warehouses. As the poor carry the burden, the rich, made of foreign companies and their Nigerian representatives, reap the benefits. The truth is western powers still control African nations whose leaders are either ‘willing puppets or involuntary subordinates of these western gimmicks”. SAP has been shown to be a class project designed primarily to serve the interests of the international bourgeoisie and their local allies. The burden of SAP has been borne majorly by the Nigerian working class and their dependents.


These conditions in Nigeria have been protested against. In March 1989 with the pains of SAP, coupled with the oppressive policies of the Aba local government, there were many anti government protests in Aba. Government properties were destroyed and burnt, including tax offices and the residences of the chairman of the local government. Two months later this protest, involving students, workers, market women and the unemployed, spread to most parts of the country. Properties belonging to the government and transnational corporations were burnt. In Benin, the protestors burned the prisons and freed over 6,000 prisoners. However, the state used extreme violence against its citizens to contain these protests. It is important here to note the similar conditions between the 1989 protests and #ENDSARS protests in 2020. The government closed down several universities and other institutions of higher learning in the southern parts of the country, to intimidate the students and academics. Those termed extremists were stopped from participating in politics and were “dealt with''. Top government officials that showed any sign or dissent were removed.


Andrew C. Okolie in 1991 predicting contemporary Nigeria today and #ENDSARS


“What we see, therefore is that the anticipated third republic will be very unstable, the obligation to service the nation's debts will weigh down too heavily on the government; the marginalization of the vast majority of the people will likely continue as they are called upon to make more sacrifices; official corruption will likely be on the increase; ethnic rivalries and frustration will intensify”

“ The government has ceased to have any positive meaning for most people. They see the state as an irrelevant, oppressive and highly alienating agent of the rich and powerful few. These alienated and marginalized people will likely seize any opportunity to subvert the state”



2. Neo colonialism in Francophone countries


Of all the former colonial powers in Africa, France has retained the most intense, political, social, economic and cultural ties after independence. On 20th January 2019, the Italian deputy Prime Minister, Luigi di Maio, called the European Union to impose sanctions on France for its policies in Africa. He went on to state that without Africa, France would not rank in the top 6 among world economies, asserting, “France is one of those countries that by printing money for 14 African states prevents their economic development”.


This section aims to present a critical analysis of the Communautės Financières d’Afrique Franc (CFA) zone, aiming to show how the CFA currency is a politico-economic tool of French neo colonial policy in Africa, maintained with the active participation of francophone elites on the continent. Whilst defenders of the CFA usually refer to the stability of the currency, credibility provided by the French treasury and low inflation rate as benefits of the CFA currency, this section aims to prove that it is the most blatant example of functioning neocolonialism in Africa today, deepening dependency and underdevelopment on large parts of the continent.


The genesis of the CFA is colonial, after Paris ratified the Bretton Woods Agreement in late 1945; the French franc was devalued so as to put a fixed exchange rate with the American dollar in place. Thus, new currencies were established in French territories overseas to both protect them from the devaluation, and crucially to facilitate exports to France to help Paris rebuild after the war; essentially using institutional arrangements to maintain their right to African natural resources.


Africa is important to France, given that nuclear power accounts for 80% of French electricity production and uranium sourced from Niger is crucial. In addition French industries depend on the CFA countries for imports of manganese, phosphates and other minerals essential for French aeronautics and weaponry production. The main goal of the CFA arrangement was to construct a post colonial structure to establish continued French influence and protect Paris economic interest in terms of access to natural materials, as well as safeguards markets for French manufactured goods. The results being that CFA franc has enabled member countries maintain their dependent position as relatively low priced sources of raw materials. CFA currencies are and continue to be set at an unreasonable high level, limiting the price competitiveness on the global market; except of course exports are going to the French market.


Intrinsic to the CFA arrangement is that CFA members are expected to deposit a minimum of 65% of their international reserves into an Operations Account located in Paris at the French treasury, (this figure has been modified to 50%). The operations account is one of the biggest controversies about the CFA. By depositing a huge percentage of their reserves, member states are essentially handing over control over their monetary policies to France. It is key to note that regarding this common account; no African country is able to say which part of the capital belongs to it. French policy also disallows the disclosure of information regarding the investment of this capital by the French treasury. In essence, they are unaware of where these funds are invested. Only France has the privilege to access this information.


In 2014, $20 billion of African money was held in trust by the French government in the Operations Account. Much of what France purports to provide as aid, are actually funds originating from the recipients themselves, gotten from the Operations account. In addition, the bulk of this aid also comes in the form of loans, which have to be paid back, with interest! Additionally, French representatives sit on the boards of the CFA central banks and a de facto French veto exists with regard to setting interest rates and monetary policy. This power cannot be exercised by CFA member states. Members hence are dependent on Paris to administer and control their own currencies, falling short of a sovereign state.



Further lack of autonomy of French CFA member states was illustrated in 1994 when there was a sharp devaluation of the CFA franc, to promote exports from the CFA zone. This devaluation was unilaterally done without French consultation with African leaders. This step greatly aggravated economic instability in the CFA countries. It reduced the purchasing power of the population, particularly the lower class, intensifying poverty as prices went as high as about 30%. That the African leaders were not consulted about the devaluation of their own currency, speaks volumes. The status of African member countries is clear; they are subject to the “monetary whims” of the colonizer hence their sovereignty and autonomy are severely limited.

The CFA franc is an immense obstacle to the development of African countries. The operating mechanisms of the franc zone and the monetary policies imposed on those countries are largely responsible for the failure of the CFA franc to be an instrument of development. Almost all of the member state countries are ranked as least developed countries or they are heavily indebted. The true value of the CFA franc goes beyond economics however, it is also political. The CFA member states have no national monetary policy of their own, this right remains with France. An examination of the CFA shows it serves as an instrument to suck capital and economic surplus out of former French colonies to France.


It is also very important to acknowledge African agency in the CFA story. Francophone leaders are well known for their attachment to Paris, manipulating relations for the sake of their own regimes survival in policies that fit Frances concept of extraversion. The governing elites have actively continued the continent's dependent position within the global system. In essence, whilst dependency could not be more evidence in the usage of the CFA currency, this situation has been preserved by the consent of the ruling elites in the francophone countries.



CONCLUSION

The crisis facing Africa, as the foregoing has elucidated, is not just an economic one. It is also profoundly political. In reality, it is difficult to consider a separation between political aspirations and economic manifestations. Paraphrasing this Foucauldian perspective, politics is inseparable from economic aspirations. African political economy is shaped externally and control of the neo-colonial state is done through economic and monetary means.


Africa’s underdevelopment is intentional; it is the final stage of imperialism. Here, the consciousness of the colonized people is so high that old colonial forms no longer remain intact. Hence, a new form of colonialism has evolved, one that has disillusioned people into thinking that their state has gained independence, that it has attained political sovereignty and that the means and power to control their economics and politics systems rest with them. The colonial master has merely feigned withdrawal and continues to run the society behind the screen. The colonial powers have transformed the rich poor conflict from the national level, inside their countries and exploited it to a conflict at the International level. It is important that we have this in mind when having conversations comparing the West’s advancement and Africa’s underdevelopment. This is to avoid placing the West on a high pedestal, internalizing their views of us as intrinsically backwards and underdeveloped.


This essay is part of a series exploring the impact of colonialism on our continent, hoping to explore and critique western Eurocentric ideologies. These essays aim to challenge imbibed Western knowledge about our continents history, culture, politics and economics. By doing this, I hope movements and protests across the continent, like the ones we saw in 2020 will fully contextualize instances of mal-governance with external colonial powers. It is only then, we can ask for more radical change and address the root of our continent's problem. This call is to all Africans, like Nkrumah understood, if parts of the continent are infected with neo- colonialism, then all the countries and vast majority of the continent would be adversely impacted.



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