A history of resource plunder

Since colonization, Africa has provided its best raw materials for the global North. Can countries finally break this pattern?

January 2014 near Djeno Cabinda, Angola. Image credit JB Dodane via Flickr CC BY-NC 2.0.

The struggle for control over Africa’s natural resources has raged since the colonization of the continent. It continues today as the forces that undermine Africa shift from the former colonizers to transnational corporations, and the ideology that underpins the global economic order morphs from blunt “flag” colonialism to the hegemony of neoliberalism. The effect is still the same: the underdevelopment of African economies and undermining of state capacity to meet peoples’ needs. The following unpacks the roots of this persisting problem and offers some lessons from the early post-independence era, when governments across Africa recognized these issues clearly and enacted revolutionary policies to confront them.

Prior to colonialism, the countries of Africa were economically, politically, and sociologically structured organically around their internal needs and demands, meeting internal material and social challenges. This is not to say these societies were devoid of internal contradictions, conflicts between them, or engagement with the wider world––indeed, trade routes certainly extended beyond the continent. But on the whole, the economic structures and relationships that developed were shaped by dynamics and demands within African societies.

This was forcefully upended with the onset of colonialism, as African economies were extroverted, destroyed, and fragmented. A new structure was put in place in which African economies were inserted in the global economic order as providers of raw materials for the development of other countries––basically for imperial Europe. This has relegated the vast majority of the continent to a political economy structure of primary commodity export dependence.

Within this structure, African countries became dependent on the export of a small basket of barely processed minerals, timber, and agricultural products (cocoa, coffee, bananas, etc.) as raw materials to feed the industries of the global North. In return, Africa became dependent for their consumption needs on the import of the goods manufactured in the North, most often made using African raw materials.

This enforced “unequal exchange” of unprocessed so-called “low-value” raw materials for “high-value” processed goods has become the basic mechanism of unequal economic relationships between Africa and the advanced industrial capitalist North, and the means of continued appropriation of the wealth created in Africa by the North. This undermines the accumulation of wealth in Africa and its reinvestment for renewing, upgrading, and expanding productive capabilities of the societies on the continent, and therefore of their ability to meet the changing needs of the people. On the contrary, African countries and opportunities for their people have become trapped in the vicissitudes of the global market for their commodities over which they have little control.

The colonial restructuring of Africa’s economies and their orientation to the external needs of European industrialization have devastating consequences for the internal dynamics of the economies and the societies, marked by two key features:

First, as products which were before used and processed for an internal economy came to serve merely as unprocessed raw materials for Europe, the internal usage of these products was subverted. Iron, which was processed into agricultural tools and other mechanical tools, was now mined only to be carted out in raw form. Agricultural products which before were processed in wide-ranging forms for food, clothes, shoes, were now only exported in their raw forms. As a result, the chain of processes, skills, and knowledge of these products and their uses through the domestic economy was broken. Instead of being maintained and upgraded over time, the capabilities and capacity have become degraded.

Second, the relationships that existed between different types of economic activity and “sectors” of the economy were fragmented. The chain of mining, smelting, and crafting iron to supply the technological need of agriculture, such as tools for farmers, was fragmented during the colonial economy. Agricultural supplies to iron crafters were also equally disrupted. This shifted the overall nature of African economies so that these sectors no longer met the needs of and reinforced one another, helped each other grow, or evolved according to African needs.

As different sectors of the economy were no longer “speaking to each other,” the range of internal exchanges became limited and the overall economy became more shallow and weaker. For instance, farmers who now only sold their products to an external (North) market didn’t necessarily have an internal market for their products so that they could also expand their production and opportunities for livelihood. This led to a common belief that African countries have small markets, erroneously attributed to small national populations, and that there is simply nothing that can be done about it. But contrast this with global North countries such as the Netherlands or Denmark: their populations are smaller than many African countries, but because of the coherence in their economies they are able to have a deeper domestic market which allows for expanded production. Their economies were not fragmented and reoriented in the same way.

Such internal fragmentation and consequent shallowness of the African economy is aggravated by the artificial borders inherited from colonialism. Before colonialism, what now constitutes the national border between Ghana and Togo was a common space of economic interaction among societies. By being forced to operate behind new artificial borders also limits the range of exchange and economic depth.

Historically, the mining sector has been the focal as well as entry point for the construction of the primary commodity export dependent political economy. From South Africa to Zimbabwe to Ghana, colonization was consolidated as a process of European companies, supported by their governments, exercising possession and ownership of Africa’s minerals and expropriating the locals. This was replicated as more minerals were discovered in addition to gold, diamond, coal, and oil, and every time a new mineral is demanded by the global North, this dynamic is asserted anew.

However, primary commodity export dependence is not simply a reduction to the specific mineral or agricultural or other natural resources involved. Rather, it is the totality of relationships and dynamics of the appropriation of wealth, the extroversion of the economic dynamics, and fragmentation of African economies. This allows us to see how these dynamics extend beyond natural resources to other economic sectors, such as tourism, telecommunications, and finance. In tourism, for example, it is widely known that the higher end of the value-chain is dominated by a handful of transnational operators, who then appropriate the overwhelming bulk of the wealth generated, leaving Africans little out of it.

In this neoliberal era, the problem of primary commodity export dependence has been ignored at best and celebrated at worst. Promoted first by neoliberal economists and North policy institutions, an insidious narrative has proliferated that African countries should rely on their “comparative advantage,” recommending that they make better and more efficient use of their export of primary commodities. The power of this narrative has ensured that the transformation of primary commodity export dependence and its attendant problems as outlined above has ceased to be a central aspect of African policy making in the neoliberal period.

Echoing the neoliberal suppression of policies aimed at dismantling primary commodity export dependence, at the onset of neoliberalism the World Bank told African governments to abandon any notion to use mineral resources to serve social priorities or developmental priorities, and give up their running and management of minerals and mineral wealth to transnational companies. As the Bank stated:

The recovery of the mining sector in Africa will require a shift in government objectives towards a primary objective of maximizing tax revenues from mining over the long term, rather than pursuing other economic or political objectives such as control of resources or enhancement of employment. This objective will be best achieved by a new policy emphasis whereby governments focus on industry regulation and promotion and private companies take the lead in operating, managing and owning mineral enterprises.

Paradoxically, even the revenue from the export of primary commodities has been undercut through World Bank-promoted programs of lowering corporate taxes and royalties, and giving many concessions and incentives to transnational mining companies in the name of attracting foreign investment.

Many of the best tools to fight against dependency, such as development planning and import-substitution-industrialization, have either been actively repressed by programs like structural adjustment, or pushed into the margins by the dominance of neoliberal thought and “free market” policymaking practices. These tools were widely deployed by early post-independence governments to assert sovereignty over natural resources, before they were truncated by neoliberalism, which has reasserted extractive colonial dynamics.

In the early post-independence period, after formal decolonization, there was wide recognition from governments, across Africa and across ideologies, that the key task for development was to confront primary commodity dependence and its binding economic constraints. Kwame Nkrumah recognized the problem clearly in stating: “Africa is a paradox which illustrates and highlights neo-colonialism. Her earth is rich, yet the products that come from above and below the soil continue to enrich, not Africans predominantly, but groups and individuals who operate to Africa’s impoverishment.” This recognition across the continent and the global South reverberated into mainstream policy institutions established in this era, such as the UN Conference on Trade and Development Planning or the African Institute for Development Planning. A key lesson from this era is the critical importance of restoring this recognition of the structure of African economies as a starting point for policy and activism.

Early post-independence governments worked to ensure that their economies accumulated for themselves by taking over the commanding heights of the economy strategically. This required asserting sovereignty, and therefore control, over their natural resources. The key mechanism for this was vesting the mineral wealth of their economies in the state. In Ghana, for instance, laws were implemented to declare that the mineral wealth or the wealth under the soil is vested in the Republic of Ghana and, it is the president who has custodianship.

Crucially, this nationalization extended beyond minerals to the mines themselves, even those already constructed. Taxation and royalties were also implemented to fund development and social programs, and the transfer of skills and technology was carefully facilitated.

Early post-independence leaders also saw beyond the hard economics of natural resource sovereignty to recognize its social dimensions. For instance, Kwame Nkrumah bought British mineral mines, which the UK had wanted to close as they did not make any profit. It came as a surprise to many that Nkrumah would purchase unprofitable mines, but his goal was not simple profit, but to create jobs as a social act to expand employment opportunities for the people.

This understanding of the social dimensions of dependency is key for the Post-Colonialisms Today project, as feminist politics is a central pillar. The basic recognition of dependency and its social dimensions, and the need to assert African agency over resources, provides a stronger basis to ensure power and agency for African women. At the same time, post-independence leaders must be critiqued for their patriarchal policies and tendency to sideline African women after independence despite their prominent role in anti-colonial struggles.

The early post-independence era also offers lessons on confronting the fragmentation of African economies. Their approach centered on industrialization: building African capacity to meet Africa’s needs rather than rely on the North to import high-value products.The key challenge many governments faced was generating the resources to support industrialization. Profits from exports from producing primary commodities were leveraged to support building factories, establishing institutional mechanisms, and funding social policies. The widespread use of tools such as the taxation of transnational corporations, protective tariffs, and royalties also generated resources.

However, a deeper problem often remained even as important efforts towards transformation were funded and planned: restoring internal linkages to African economies and making different sectors “speak” to each other once again. This challenge is particularly difficult and one many post-independence governments did not tackle sufficiently. As Post-Colonialisms Today researcher Akua Britum details, post-independence governments had to explore methods for funding development beyond taxation, such as reinforcing social programs to meet workers’ needs without reliance on large cash incomes.

Some countries paid particular attention to restoring these linkages. Post-independence Botswana, for instance, enacted policies to ensure the processing of minerals mined in the country must take place, at least in part, domestically. They also insisted that the procurement of inputs for mining must be sourced in Botswana. This meant that while the economy was temporarily reliant on producing minerals, they could still build up their industrial capacity and promote structural transformation.

There are limitations and layers of complexity to approaches in the post-independence era though: as Post-Colonialisms Today researchers Kareem Megahed and Omar Ghannam point out, post-independence land distribution in Egypt from landowning elite to the peasant class was reversed as peasants only received flimsy usufruct ownership. Under Kenneth Kaunda, Zambia nationalized their mines but still remained deeply controlled by international mineral value chains, meaning that even though they owned the copper mines outright, transnational copper companies managed to undermine their capacity.

Both the strengths and limitations of early post-independence policies offer a wealth of lessons for today’s struggles for control over Africa’s resources. Critically, the clarity in that period around the importance of African state control over natural resources offers a path forward for contemporary efforts––it must be wrestled away from transnational corporations today just as it was wrestled from colonial forces. With basic policies such as nationalization being halted outright, as seen recently in Zambia, this task remains as urgent as ever.

Listen to Tetteh’s analysis on African policy response to COVID-19, drawing on lessons from the decolonization era:

About the Author

Tetteh Hormeku-Ajei is Head of Programs at Third World Network-Africa and on the Post-Colonialisms Today Working Group.

Camden Goetz is a Coordinator at Regions Refocus and part of the Post-Colonialisms Today secretariat.

Further Reading