Global capitalism’s exploitation of Africa has made a rare appearance in the dominant media. The glimpse of reality came about thanks to former U.N. Secretary-General Kofi Annan and the Africa Progress Panel, which he chairs. In its 2013 report, the panel revealed startling facts about the effects capitalism and neocolonialism continue to have on the continent.
Tax evasion, secret mining deals and illegal financial transfers drain Africa’s resources and rob it of enormous revenues, according to the report. It found, for instance, that Africa loses $36 billion each year to corporate tax loopholes alone. Meanwhile, oil and mining sectors in many countries remain insulated from the national economies in ways that block balanced growth. Corrupt and shortsighted policies sacrifice local jobs and production, the basis for meaningful progress.
Annan warns that in many African countries “natural resource revenues are widening the gap between rich and poor.” Though foreign investment in African gas, oil and mineral resources has led to impressive economic growth, it “has not brought comparable improvements in health, education and nutrition,” he says. In several countries, the gap between international wealth ranking and the Human Development Index indicators for wellbeing (such as life expectancy) have grown. In four countries the report analyzed, the richest 10 percent received almost all of the benefits of economic growth.
‘Secret deals and transfers’
For instance, secret deals and transfers cost the Democratic Republic of Congo $1.3 billion in mineral rights revenue between 2010 and 2012. DR Congo spent nearly the same amount on health and education over those two years. In other words, multinational corporations and profiteers benefit wildly from Africa’s resources, while millions of people’s basic needs suffer. Nigeria and Angola have similarly lost great amounts of revenue in the last few years.
“Africa loses twice as much in illicit financial outflows as it receives in international aid,” writes Annan in the report’s foreword. “It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximize their profits, while millions of Africans go without adequate nutrition, health and education.”
The report urges both African governments and “the international community” to promote transparency, fair contracts, and equitable tax regimes in the region. These reforms are necessary, according to the report, in order to reverse widening inequality, and to promote investments in people (“human capital”) and infrastructure required for long-term progress in Africa.
The report brings welcome awareness and analysis to the plight of Africa, long the victim of imperialist plunder. Its “recommendations for immediate action,” if implemented, would doubtless lead to greater transparency, economic development and equality. However, even if civil society organizations and policy reformers organize around these recommendations, their impact is likely to be minimal. Corporations, banks and governments under capitalism do not care about the report’s ostensible underlying priority: the common good. They will oppose any reforms that threaten to reduce profits.
Socialists support reforms but emphasize that only solidarity and mass struggle promise real change. Exploitation of Africa will not end at the recommendation of the Africa Progress Panel, a capitalist nonprofit foundation. But the panel’s 2013 findings give us an occasion to recall the inhumanity of capitalism and observe neocolonialism in action. Such appalling devastation demands revolutionary change.
