Tax Justice Network ■ Africa’s Path towards Resilience and Sovereignty: the Real Wakanda is within Reach
Colonialism stripped Africa of agency and confidence as well as material resources. In this article from Tax Justice Focus, Fadhel Kaboub* sets out a path towards independence and prosperity. He calls for a thorough-going rejection of the policy prescriptions offered by the former colonial powers, a renewed faith in the energy and creativity of Africa’s peoples, and a step-by-step programme to build sovereignty through the expansion of domestic production in energy, food and value added goods.
Africa was not colonised because it was poor, but rather precisely because it was and continues to be a very rich continent. Colonialism was fundamentally about extracting natural resources and labour power, but most importantly it was about establishing an economic, political, legal, educational and cultural ecosystem to institutionalise an abusive power structure, to affirm it as the unescapable model of economic development, and to acclimate the natives into embracing and reproducing its roots long after the end of colonial presence. Colonial institutions were not just administrative, bureaucratic, organisational, and legal codes, but they were also habits of thoughts and routines of behaviour that were deeply embedded within the social fabric.
So how can African nations undo these colonial and neocolonial shackles and mobilise their resources to achieve higher quality of life, prosperity, equity, and justice for their people? First, we need to undertake a detective-like forensic analysis to reveal the roots of these neocolonial shackles. Second, we must acknowledge that we need a coherent long-term vision for a comprehensive, multipronged, and sustained policy framework that cannot be interrupted by short-time political calculations. Third, we need to establish a rigorous financing mechanism that is transparent, just, and sustainable. In what follows I argue that a real-life Wakanda is actually within reach and that we have a realistic policy framework to achieve it.
Root Causes and Quagmires
Most African economies suffer from three structural deficiencies: the lack of food sovereignty, lack of energy sovereignty, and the low value-added content of exports relative to imports. These are typically the key pressure points that produce large trade deficits, which subsequently put downward pressure on the exchange rates of African currencies relative to major currencies like the US dollar and the euro. A weak exchange rate means that imports of basic necessities such as food, fuel, and medicine will be more expensive. This type of inflation often leads to social and political instability, which governments typically avoid by subsidising the price of basic necessities, and by artificially keeping their exchange rate strong via the accumulation of debt denominated in foreign currencies. This external debt accumulation is believed to be a solution when it’s in fact a quagmire. Prioritising debt payments often means reducing budget allocations for education, health, and critical infrastructure investments. Furthermore, the policies that are designed to increase foreign currency earnings to pay off the debt end up being entrapment strategies that deepen the quagmire.
For instance, policies that encourage tourism end up increasing food and fuel imports to feed, transport, house, and entertain millions of tourists. Policies that encourage exports end up leading to more imports of fuel, capital equipment, and intermediate inputs. Policies that promote foreign direct investment (FDI) end up increasing imports of fuel for energy production and transportation. Policies that encourage outbound immigration in order to increase remittances of foreign currencies end up promoting brain drain. Policies that promote the liberalisation of financial services end up hurting domestic investors and inviting speculative attacks from abroad. All of these policies masquerade as solutions when they are in fact structural traps. These traps are further amplified with a global race to the bottom forcing most developing countries into lower labour and environmental standards, more regulatory and fiscal concessions to foreign investors, and ever more dependence on the Global North.
This analysis suggest that the only way out of this trap is to invest in sustainable agriculture and renewable energy, and to invest in education, vocational and technical training, research and development, and basic infrastructure in order to accomplish higher degrees of food and energy sovereignty as well as an industrial basis focused on higher value-added content.
A United African Vision: A Real-Life Wakanda
If Africa doesn’t have a coherent and unified long-term vision for itself, it is certainly going to continue being part of someone else’s vision (i.e. Europe, the U.S., and China). A real-life Wakanda is not going to be imported from or delivered by the Global North; it will be built by Africans, for Africans. That requires a collective vision and commitment to sustained efforts over the next 3 to 5 decades focused on three core pillars: food, energy, and high value-added manufacturing.
African economic sovereignty implies resilience to external shocks that often lead to counterproductive policy priorities such as agricultural policies that are aimed for increasing export revenues to favour export crops while undermining domestic food security. Allocating the most precious water resources and the most fertile land to the production of export crops like strawberries is the most inefficient and unsustainable use of resources.
Ensuring food sovereignty begins with sustainable agricultural strategies to restore soil health and to reallocate land and water use to enhance food security. These policies should be supplemented by localised investments in aquaponics farming which produces 100% organic leafy greens and high quality proteins, while using 90% less water compared to traditional agricultural techniques, no fertile soil, and no chemical fertilisers.
We cannot have a prosperous economy without adequate energy production capabilities. Africa has tremendous potential for renewable energy production including solar, wind, tidal, and geothermal energy. The goal is to build a resilient and carbon-free electric grid to power the entire continent via a network of national and regional grids, supplemented by microgrids, and energy storage capabilities. The manufacturing, installation, and maintenance of this critical infrastructure will create millions of well-paid jobs and will improve access to electricity, reduce pollution, improve health outcomes, and boost overall quality of life across the continent.
Africa’s industrial strategy cannot prioritise the needs of the Global North by continuing to serve as the source of cheap raw materials and assembly line for workers. The obsessive focus on economic growth for its own sake, the myth of “catching up” with the developed world, and competing in the global economy are some of the most destructive strategies used in the Global South. The alternative is a South-South regional trade and cooperation industrial strategy that promotes competition among equals, complementary and strategic collaboration in heavy industry, and resilience-focused industries such as energy, health, broadband internet, and transportation. The South-South trade model leverages complementary resources from multiple countries, allows for specialisation, shared responsibility, research and development, job creation, and access to a larger consumer base in the entire region, which allows for economies of scale to kick in and makes industrialisation profitable.
The guiding principles of this vision cannot be the traditional metrics of economic growth and export revenues, but rather a broad dashboard of environmental, social, and economic indicators focused on quality of life and resilience.
How to Pay for it?
The Global South is a net-creditor to the Global North at the tune of $2 trillion annually. Even if Africa’s debt is cancelled today, the financial neocolonial extractive mechanisms will quickly build up more external debt. This financial extraction is compounded by the usual extraction of natural resources and brain power. A real-life Wakanda cannot be built unless these extractive practices are reversed. The main pillars suggested above are necessary but they may not be sufficient to restore an economic, social, and ecological balance quickly enough.
In order to accelerate the transition to a real-life Wakanda, there is a case to be made for a substantial transfer of financial and technological sources from the Global North to the Global South. This is not a plea for help or charity. This is a call for climate, colonial, and neocolonial reparations. The Global North is responsible for the vast majority of CO2 emissions since the industrial revolution; that is a climate debt. The existing economic deficiencies in the Global South can be directly traced back to extractive colonial and neocolonial policies. There is a case to be made for decades worth of colonial and post-colonial debts to compensate Africans for abuse, violence, genocide, cultural appropriation, and biopiracy.
Debt cancellation and reparations (both financial and in-kind technology transfers) are the first step in an economic, social, and ecological restorative justice process. This is the pre-requisite for restoring a higher degree of monetary sovereignty to African nations, which can then be leveraged to build productive capacity, invest in research and development, indigenous technologies, eco-housing, eco-tourism, cultural heritage preservation, and adequate care for people and nature. Once we settle climate, colonial, and neocolonial debts and unshackle African nations from those grips, African government will be able to mobilise their own resources to promote full employment and price stability by building the adequate level of productive capacity needed for a real-life Wakanda. The reality of an economically sovereign, resilient, prosperous, just, and equitable African continent is within reach, and it begins by educating, organizing, and mobilising millions of Africans to decolonise their economies, their educational systems, and every aspect of post-colonial institutions.
Fadhel Kaboub is an associate professor of economics at Denison University, and the president of the Global Institute for Sustainable Prosperity. He has held research affiliations with the Levy Economics Institute, and the John F. Kennedy School of Government at Harvard University. He is an expert on Modern Monetary Theory, the Green New Deal, and the Job Guarantee. His work focuses on public policies to enhance monetary and economic sovereignty in the Global South, build resilience, and promote equitable and sustainable prosperity. You can follow him on Twitter @FadhelKaboub and @GISP_Tweets