Africa is the poorest continent. It’s got the lowest GDP per capita, the lowest life expectancy, and highest child mortality death. If we go by the way the news frames the issue, we see several explanations for Africa’s underdevelopment. Greedy, corrupt African politicians that don’t represent their countries’ best interests. The failure of democracy to take hold of African politics. The tensions that exist between the many different ethnicities on the continent. And let’s not forget the violence, be it civil conflict or electoral violence.
The answer to the question may seem overly simplistic at best, and highly idealistic and naive at worst. But it might in fact be the most comprehensive and informative explanation: Africa is the poorest continent because of capitalism.
Allow me to elaborate.
Africa only became the poorest continent after 1975. It was during this period that there was a major change in the world economy, and Africa was the Third World country that could not adapt to it quickly enough. This failure to adapt was due to structural differences between Third World countries. Let’s explore Africa’s structure before examining what happened next.
Setting the Scene: Events that Structurally Weakened Africa
Capitalism is the free search for profit. The African continent was introduced to capitalism during the periods of slave trade and colonialism. These events led not only to a structural labour shortage, but were also an obstacle to the development of entrepreneurial spirit: for example, enterprises would be in the hands of foreigners during colonisation.
In the period before colonialism, political control was earned through fostering loyalty (by giving your tribe patronage) and the use of violence. During the colonial era, these practices were institutionalised in exploitative political organisations. Colonial powers also structurally favoured some ethnic groups over others. A potent precedent to set.
The heritage: predatory political institutions. This legacy is what causes the current problems:
- The state has little capacity, because state resources are used as private resources to give supporters patronage. Money is not spent on development of opportunities for the whole country.
- International donors made their donations conditional on democratic reforms during the 1990s. African political elites made the minimal amount of concessions so as to stay in power but also receive money: the allowance of elections and political opposition. No real institutional reforms.
- Politicians mobilise voters along ethnic lines. When one ethnic group is in power, other groups will not have as many opportunities as the group in power. Elections are therefore literally about who will get food and jobs. This, in combination with historically systematic inequity between groups, creates tensions and violence.
The Catalyst that made Africa the Poorest Third World Continent
Back to capitalism. During the 1960s and 1970s, the American economy was stagnating. Global competition between businesses and industrial firms increased after the trade expansion a decade before. The US chose to adapt and compete aggressively for capital worldwide: it deflated investment in other parts of the world and increased interest rates. A gap in the market opened: the US now needed imported industrial products.
What happened to Third World countries?
Africa was already heavily reliant on foreign investment that suddenly got withdrawn. Structural labour and entrepreneurship shortages meant that African countries could not rise to the challenge and produce the things the US wanted. South and East Asia, in contrast, had large, flexible and low-cost labour supplies. Asia also received aid and export privileges from the US.
A clear example of winners vs. losers in capitalism: South and East Asia had a strong advantage in the competition for a share in US demand for cheap industrial products. Africa did not and had to compete directly with the US.
Was it… “bad luck”?
The above shows that the root cause of African underdevelopment is the global search for profit and capital. The structural disadvantage that African countries were in after the colonial era made them the most vulnerable and least adaptable to the change in US economic policy during the 1970s. The structural disadvantage stemmed from profit-seeking ventures like the slave trade and colonialism. The change in American economic policy had as the objective to maximise profit and capital worldwide.
All the characteristics of African states that we frequently hold up as the explanation for why Africa is poor — corrupt leaders, “failed” democracy, the tensions between the many ethnic groups on the continent, and violence — are the result of structures that were set in place because of the search for profit.
Some have called it bad luck. Would you?
