PRIVATE BUSINESS AND PEACE IN AFRICA

By Hannes Swoboda 


Again and again the question is raised, if and how economic development can create - or at least contribute to - peace. In particular, how can European private investments contribute to a peaceful environment? At a conference in Paris organized by the initiative "Croissance-Peace" the issue was specifically how private-to-private cooperation between African and European companies could contribute to a sound economic and social development and how this could enhance peace. 

Development brings people back from Europe to Africa

The conference was opened with an inspiring speech by the former Prime-minister of Guinea, Lansana Kouyate. One of his main messages in connection with complaints about strong migration to Europe was: "development brings people back"! That is certainly true if one does not mean only economic development. But for the moment his own country produces an increasing number of emigrants, especially to the former colonial power France. Ebola in connection with bad governance weakened the economy and contributed to a very high number of unemployed. Overall, Guinea has one of the highest number of people living in poverty, but also daily violence and corruption add to the economic push factors. Things are rather complicated in economic and social areas, but also health and environmental factors have created a downward spiral.  

One could argue that Guinea, as many other African countries, has mineral resources. But it is a question how much mineral resources benefit the citizens and not only the extracting companies and some officials and local tycoons. In connection with Guinea, a contribution in African Business April 2019 stated: "While the bauxite mining industry has boomed in recent years (Guinea was responsible for 40% of China's imports of 68 m tonnes in 2017) the impact on ordinary citizens has been nominal." Sometimes the effects on the citizens are even negative. In the case of Sudan it seems, that the recent demonstrations have also been enhanced by the disastrous effects of the activities of the extraction industries on the environment and agriculture in the neighborhood of the mines. 

This lack of a positive "trickle down effect" of many investments must be of great concern for African but also European leaders who deal with European-African relations. In the meantime, an initiative called "European Partnership for Responsible Minerals" has started to improve the social and economic conditions of workers and of the respective local communities. This cooperation between private investors and NGOs combined with public support could promote responsible business practices and the achievement of the Sustainable Development Goals. 

Extending African infrastructure

Successful promotion of private investment presupposes a viable infrastructure of roads, rail and ports, along with energy supply. In this respect, Chinese investments significantly help meet the urgent need for an efficient infrastructure. But there are three caveats. First, the infrastructure should really meet African needs and not only needs of Chinese ex - and importers. Secondly, the locals should not lose control of constructing and running these investments. Thirdly, national governments have to watch closely the development of the debt in connection with the repayment of the credits used for building the infrastructure. 

One advantage of latecomers in Africa is that they may skip traditional technologies. Typical examples are non-grid electricity supplies and mobile telephone payment systems. This kind of infrastructure can be built up - additionally or instead of fixed infrastructure - decentralized and with low costs. African inventors and investors can even be pioneers and sell such technologies to other countries. 

The different kinds of infrastructure - especially non-grid infrastructure - are particularly necessary and useful for the areas in the periphery. To transfer knowledge necessary for production and trade, this infrastructure is vital. To connect different peripheries with centers would also reduce tension and conflicts which arise because of neglect and discrimination of certain regions and their tribes. Such a neglect is not only typical for Africa, but it seems especially dangerous in fragile states with strong tribal structures.

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 The missing regulatory framework 

The discussions in Paris did not only deal with the economic relations according to the mantra "trade instead of aid" but also with investments and know-how transfer. They underlined the necessity of clear rules for any economic activity, rules which the states must decide upon. Private to private activities need rules, which often are non-existent. The more international investments and exports are important for economic development, the more these exchanges need rules and controls and if necessary sanctions. Weak governments are failing to set these rules and that is one of the problems in our neighbor continent. In addition, the lack of rules and controls lead to widespread corruption in cooperation between African and European/foreign actors. 

Another field where the public rules and controls are needed is in building the necessary infrastructure. As mentioned before, China has taken the opportunity to invest and set a strong foot on the African soil. Unfortunately, not all these investments show the quality needed. But it is up to national leaderships to demand from China this quality and if not delivered, to ask them for the repair of the failing infrastructure. Paul Kagame, the Rwandan President had the courage to do it. But often this courage is missing or overshadowed by corruption. 

Regulation must also take care of the natural environment. African countries need a strategy for sustainable(!) development. As a contribution in African Business from March 2019 stated: "Extractive activities such as mining are causing profound ecological and social damage in Africa. Governments must ensure that nature is protected when trade and the economy expand." It seems obvious, but not many countries have accepted that attitude as a general approach.

Security and destruction of traditional forces and ideologies

An important element for economic and social development is security. Without security investments and trade are hampered. This is the reason, why many African countries cooperate closely with European security forces. However, very often, insecurity arises because of inequality and economic and social deprivation. In addition, these inequalities and discriminations are regionally or tribally determined and enhanced. These frictions are the most fertile ground for Islamist groups. The latter are not only active as religious groups but also as social movements. They reach across and beyond tribal borders and differences and attack the state authorities as inefficient and as heritage of colonial powers: only the caliphates can care for the needed and guarantee justice. Here we find a clearly expressed ideology. Even if many rebels who join the Islamists do not adhere to this philosophy, it gives a guideline in difficult and chaotic times. 

As other ideologies as nationalism, strong anti-colonialism, communism etc. broke down, a new ideology is on the rise, even if it is a cruel and destructive one. As there are many people who are excluded from the benefits of economic development and social care, these forces get support and can recruit followers in spite of their deadly ideology. 

The rise of such reactionary and partly terrorist movements is a global phenomenon, as the breakdown and disappearance of peaceful ideologies made the room free for rather destructive forces. Globally, we have seen the development of a crude Financial- or Turbo-capitalism, unregulated globalization and extreme individualism. These kinds of destructive economic forces generate repressive "ideologies" as answers and of course vice-versa. There exists mutual dependence between destruction by extreme capitalist forces on the one hand and by religious and political right-wing forces on the other hand. One answer to the extreme capitalist forces, which are also destroying traditional political ideologies is another destructive force, the extreme and populist right, which can be seen flourishing around the globe. But none of these forces and movements is keen to see Africa developing and flourishing. 

These global developments must not lead to a plea for the return of old ideologies. But we need policies which strengthen the social cohesion and offer answers to the concern of citizens, especially those on the fringe of society. And in all continents and states such a redefinition of politics which would promote a sound economic development, equality and social balance is necessary.

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Terrorism and migration 

Back to the terrorist movements in Africa. These movements earn money by trafficking goods, especially drugs and arms, along with asking for ransoms for their captives. Part of the weapons they trade is used to threaten people, kill "enemies" and apostates and take hostages. To prevent these activities, it needs soldiers to fight against. A colonel of the French gendarmerie described at the conference in Paris, the extensive cooperation with African, especially West African authorities. 

But the French colonel "forgot" to mention, that very often the armed approach to terrorism creates new insecurities and incentives for new rebels to join terrorist groups. This is true, especially if military and police actions are organized by the former colonial power. At least it would be necessary - in addition to the use of security forces - to design and implement a comprehensive policy, which is addressing the major grievances and concerns of the citizens. The state must deliver more security and economic and social benefits than the terrorists. 

The Islamist groups are also engaged in trafficking of people who want to reach European soil. And they earn a lot of money by doing that. The EU started already a while ago to cooperate with African countries against illegal and uncontrolled migration. One of these countries is Niger, where the city of Agadez became one of the main hubs for irregular migration. But by stopping emigration and pushing people back to that city and other communities of Niger, new problems were created. The authorities of Niger now have to prevent smugglers doing their job and have to care for returnees mainly from Libya. All these security and defensive measures do not help, if there is no viable basis for a sound economic and social development.

We have even seen, that the French/British intervention with the help of the US forces in Libya was and still is responsible for a surge of refugees and migrants trying to reach the European soil. Military interventions, especially badly conceived and equally poorly implemented ones, are not helpful. Quite on the contrary. They aggravate the situation and start a cycle of ever more military actions and growing numbers of refugees and internally displaced persons. Recent fighting in Libya itself proves this deadly cycle of events. 

Sustainable development 

Close in connection with economic and social development one has to see the ecological transformation of Africa. Partly it is a return to or at least preservation of existing structures. Certainly, different natural reserves must not be victims of economic development - as mentioned above. But Africans start also to think more about preserving different scarce natural resources. Water is among the most precious ones. Technically, it is always possible to get clean and healthy water, but often there is a lack of willingness and sometimes of finances to care for it. But as one of the participants at the conference said, Africa is a very rich continent but with many poor people.

More and more Africans think also about creating "closed" cycles of agricultural activities. A young lady from Congo presented a project of using liquid manure of the pig farms not only as fertilizer but also to extract bio-gas out of it. Interestingly, women were also the main presenters concerning the fisheries activities. They complained about growing overfishing which is reducing the stock of many fishes and seafood. Destruction of precious communities and their social fabric goes hand in hand with these unhealthy fishing practices. As a consequence the local fishing community and their families have big difficulties to earn a living from their traditional activities. More and more big ships are coming and reducing - by their overfishing - the valuable stock. According to the African participants, corruption is another consequence because of the lack of controls and public measures against these violations by fishing companies. 

Fishing agreements with the EU have already questionable effects, but big boats coming from Russia and China strongly violate the basic rules of sustainable fishing. A representative of fishermen from Bretagne showed how sometimes hurting rules from the EU for the EU waters have benefited the fishermen in the long run: the stocks of fishes, langoustines etc., are considerably rising again. The Bretagne fishermen are already helping the fishermen in Senegal by transferring their know-how. This is a particularly good example of private to private cooperation. 

African countries need clear rules, observation and controls to induce/force foreign fishing companies to stick to the rules and if necessary, they have to use sanctions which bite. Certainly, the EU that developed a sustainable fishing policy inside the Union could help its African neighbors more to preserve the stock of fish thereby preserving the employment and income for fishermen and their families. 

Ethnic fights and the Rwanda genocide 

The meeting in Paris took place just when Rwanda commemorated 25 years since the genocide which killed so many people. It is still unclear who started the genocide. The fact is, that it started after the killing of the Rwandan president, a Hutu, when he flew back to Kigali after he agreed to a compromise with Tutsi rebels. But was he killed by some Tutsi rebels or by extremist Hutus who could not accept the readiness of the President to compromise? Still unclear is also the role of the French army and French politicians. It seems that military interventions to stop the killing were accompanied by arms deliveries, done at the same time. 

The current President Kagame is certainly a politician who cannot be easily categorized. He is democratically elected but also very autocratic. But he has achieved a widespread and peaceful reconciliation process and also modernized and strengthened the economy. In that respect he is truly an outstanding figure. He showed how to overcome tribal differences even after cruel killings during a genocide. 

The drawing of national borders by the old colonial powers and the use of tribal differences to strengthen the domination by the colonial powers was and still is a strong contribution to tribal conflicts, atrocities and wars. Phillip Roessler makes that very clear in his "Ethnic Politics and State Power in Africa“: "In postcolonial Africa, the patron - client networks have often been organized along ethnic lines, or based on shared descent - and social identities. A legacy of the slave trade, colonialism's use of tribalism to organize and control the indigenous majority, and ethnicity's sociological attributes of dense, durable social connections and strong norms of reciprocity, ethnicity has tended to crowd out other potential institutional sources of collective mobilization, such as class, party, nation or ideology". 

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But Roessler also underlines: "The outbreak of large-scale political violence is not an inevitable byproduct of structural weakness but a strategic choice, that rulers make in a highly uncertain environment."

In Rwanda that was very obvious, where the Belgian colonial power introduced ethnic denomination into official personal documents. But ethnic differences were taken up and enforced by post-colonial rulers, which imitated these dividing lines and mechanisms to capture the state. Out of these ethnic state captures new conflicts were born. 

Warlords rose in many African countries. When conflicts could be solved - one way or the other - these warlords had to be transformed into "warlord democrats". Business connections were sometimes helpful in that transformation process. But sometimes they were fostering corruption. Still today, tribal differences and in consequence corruption may endanger economic and social progress. And they form a disincentive for investors.

But even when corruption is combated by the leadership, ethnic rivalries can endanger the transformation into democratic societies. In Ethiopia, for example, we find a very forward looking new prime-minister, but he is very much under pressure from different tribes. His own tribe is complaining that he is not doing enough for them and the others are complaining about continuous discrimination against them. To establish ethnic power-sharing is not easy in countries, where power was often based on dividing ethnic groups, ethnic belonging was underlined and where no ideology or philosophy across ethnic borders is in place. But economic growth benefiting all (!) ethic groups and promoted irrespective of ethnic boundaries may certainly help. 

The issue of political leadership 

Both peace and economic development need responsible leadership. In Africa, but not only there, we find all too weak states with autocratic leaders. That is the worst one can have in the task of preserving peace and promoting economic progress. We need rather strong and efficient states, as well as responsible and democratically elected leaders, who care for peaceful transition of power.

Many citizens are too patient with their leaders and perhaps even fascinated by them, especially if they are from their own tribe. However, again and again, especially the young and women start to protest and thereby can also achieve changes. Recently in Algeria and in Sudan the leaders and their whole political system came under attack. The leaders had to resign. Now we have to wait to see if the political system will be changed fundamentally and democratized or if only the faces on top would be changed and the old guards are just reshuffling their power system like this was the case in Egypt. Whatever the "international community" could do, they should support radical changes and give new democratic groups a chance to change the old plutocratic and corrupt systems. 

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 Conclusion 

Not only these two countries - Algeria and Sudan - but whole Africa needs responsible leaders who would promote a useful and non-bureaucratic regulatory framework for investments. Furthermore, they would have to combat corruption which is a waste of finances and personal resources. In addition, investments and their gains should not be restricted to one tribe or community but be spread across tribal/community borders. Economic cooperation between different social and ethnic groups enhances social cohesion and economic efficiency.

A major aspect of a balanced growth policy is to avoid one-sided orientation on exports. Many foreign countries want the African continent as a supplier of raw materials, from agricultural products to minerals, and as an important importer for their products. They are keen to get the basic products in order to preserve their "monopoly" on industrial processing. And then they would export these goods to Africa. But it is the African countries which have to increase their activities in the global value chain and who should build up consumer markets for domestically(!) produced goods especially in the food industry. 

In a recent report by Brookings Institution with the title "Africa's emerging economies to take the lead in consumer market growth" one can read: "Africa's emerging economies present exciting opportunities to global business for expansion in retail and distribution......The rising income levels among all socioeconomic groups and increasing demand for goods and services should encourage business to explore introducing their products to the continent." The major concentration is on retailing and distributing of the companies' products. Only second to these activities, production in Africa is mentioned as a possibility of doing business. 

African countries had not the chance to industrialize in times the European could do it. European colonial powers could do it not least because of colonial exploitation. Toby Green in his Book "A Fistful of stalls" states: "West and West-Central Africa were by the early nineteenth century very much disadvantaged in their access to the capital needed to finance investments and economic growth." One has to add, also today more capital is exported from Africa than imported to Africa. This has to be turned around. 

In addition, Africans have to watch carefully the “scramble for Africa” organized by the big Tech-companies like Google, Facebook, Amazon etc. They may help to integrate the markets and societies and they may bring enormous benefits to remote areas. But some speak already of “digital colonialization” by the dominating big digital companies. African leaders have to care for digital instruments and processes which are adapted to the needs of African countries. 

Sound democratic leadership and common African initiatives are basic pre-conditions for a sustainable economic and social change. Leaders must also extend their national markets into regional common markets or even one big and powerful African Common Market. These common markets optimize the division of labor between the countries and are an incentive for foreign direct investments. Many initiatives in that direction have been undertaken in the last years. But much more must be done. Such common markets would also strengthen the negotiation power of Africa vis-a-vis the EU, USA, Russia, and China. And that is a vital point: Africa's leaders must stand up against all form of neo-colonialism and not substitute one with another.

Africa's rulers must ask for a strong and efficient global climate policy. As recent disastrous catastrophes like that in Mozambique demonstrated, poor countries are particularly affected by such developments. All the income out of newly found minerals, oil and gas does not result in economic and social progress, if countries have to use these incomes for repairing damages inflicted by the events related to climate change. And lost lives cannot be brought back, anyway.