Multinational Corporations: The New Colonisers in Africa

Before the end of colonialism African nations were properties of their colonial masters who did what they could to rape the continent of whatever resource they deem good for the development of their citizens in Europe. Out of nowhere and without any consultation with the people in the continent the Europeans met and divided the continent amongst themselves in what has been termed the scramble for Africa. Through the scramble France, Britain, Belgium, Spain, Portugal, Germany and Italy all went on a looting spree raping Africa of her resources without putting any of the proceeds back for the development of the continent.

When US President Franklin D. Roosevelt visited Gambia in the 1940s he was so appalled by the conditions of Gambians so much so that he made this lamentation,

“It's the most horrible thing I have ever seen in my life..... The natives are five thousand years back of us....The British have been there for two hundred years - for every dollar that the British have put into Gambia, they have taken out ten. It's just plain exploitation of those people”- US President Franklin D. Roosevelt 1943.

And the exploitation was not peculiar to only Gambia. Gold Coast (now Ghana), Nigeria, Ivory Coast, Zaire (now DRC), Namibia, South Africa, Congo and Angola all suffered from the same colonial exploitation and underinvestment.

For almost three hundred years the Europeans who were supposedly devout Christians and civilised, irresponsibly looted Africa’s resources and made slaves of the natives without developing the colonies. When the local population protested against the exploitation without a reciprocal investment they were brutally crashed as happened in Congo (now DRC) where King Leopold II of Belgium looted the resources, made slaves, and killed close to ten million of the Congolese.

In 1904 to 1907 the Germans led by Gen. Lotha Von Trotha also committed their first genocide of the 20th Century by killing the 90% of the Herero and the Namaqua people of South West Africa (Namibia) when the people protested against the exploitation of their resources. And the sad stories of South Africa, Zimbabwe, Algeria, Namibia, Kenya and Angola where people were denied access to land, citizenship and basic rights and had to take up arms before they were granted independence are in many history books. We know how Nelson Mandela (now a hero in Europe) and a number of freedom fighters had to endure long prison sentences, torture, exile and deaths in the hands of their devout Christians and civilised European colonisers. The idea was that through the scramble for Africa they had bought Africa and had power to do as they pleased hence the rape, torture, genocide and the mass killings.

While Europeans became richer Africans became poorer. For example with the loot of Congo’s resources, enslavement, amputations of hands and 10 million deaths, Brussels which now doubles as the capital of the European Union and Belgium was built.

Most of the people in the continent at the time of independence could not read and write and were living in abject poverty; their farm lands had been taken away from them; and were denied citizenship in their own land as witnessed in South Africa, Namibia, Zimbabwe and Kenya.

When they were given their ‘freedom’ the independent fathers inherited nothing more than empty treasuries. They realised that after more than 300 hundred years of colonial rule their colonial masters have left them nothing, no money and no infrastructure.

This bad situation and their eagerness to improve the lives of their peoples forced them to turn to the IMF and World Bank for assistance and when they went lo and behold the colonial masters were there waiting for them. The colonisers used their majority votes to dictate to the Bank and IMF on how these former colonies should be helped. (Of the 185 members that make up the IMF six colonial masters and their allies made up of the United States, Germany, Japan, United Kingdom, France, Italy control 42% of the votes).  The colonial masters dictated to the IMF and the Bank that for Africans to be helped, they must open their economies to allow European corporations to come in. This underscores the numerous conditionalities that are associated with loans from these institutions and the conditionalities are nothing more than a smokescreen designed to ensure that Europeans never loose their grip on the resources of the colonies. Some of the conditionalities include instituting secrets memorandums of agreement, subsidies to foreign corporations and massive tax concessions (such as income tax, usage fees, property tax) -the primary source of revenue for “export-oriented” developing countries

The sad thing is that Africans thought independence would give them respite to develop but this was never to be as the colonial masters used their corporations and intelligence services to deliver vengeance against the people: encouraging and financing civil wars; unashamedly polluting rivers, wells and the soil through their oil and mineral activities; understating their profits and falsifying profit documents; undervaluing their goods, smuggling and theft; false invoicing and non-payment of taxes; kickback to public officials and bribery; over pricing of projects; providing save havens for the looted funds; and promoting the sale of guns; overthrowing African leaders; supporting dictatorships; and assassinating those who disagree with them. We know the tragedy of Patrice Lumumba and the support the West gave Mobutu.

In addition to these, the corporations who were forced onto Africa by IMF the Bank, US and Europe have been implicated in a number of cases for corrupting African leaders and stealing trillions of dollars worth of resources. Global Financial Integrity says, “$900-billion is secreted each year from underdeveloped economies, with an estimated $11.5 trillion currently stashed in havens. More than one quarter of these hubs belong to the UK, while Switzerland washes one-third of global capital flight”. Out of this $900b that is secreted away yearly $150b comes from Africa.

“The idea that Switzerland has a clean economy is a joke; it is a dirt-driven economy,” says Richard Murphy, director of Tax Research LLP. The Swiss Bankers Association claims that four-fifths of the nation supports banking secrecy, which reveals a society deeply embedded in a culture of impunity and exploitation. The fact is that those who steal must find a way to hide their loot and Switzerland provide the ideal environment for such crimes to take place. And it is not Switzerland alone that does not have a clean economy. Britain, France, Germany, Luxembourg can all be described as vampires.

In an article by Khadija Sharife entitled Capital Flight: Gingerbread Havens, Cannibalised Economies she wrote: “The IMF and World Bank tax policies towards the developing world is very lethal especially where the poor are now caught in tax brackets, courtesy of the IMF and World Bank’s structural adjustment programmes (SAP), instituting policies ranging from tax holidays to the privatisation of state services, carving out huge slices of natural capital at corporate auctions. Africa has collectively lost more than $600-billion in capital flight, excluding other mechanisms of flight such as ecological debt (globally estimated at a potential $1.8-trillion per annum), the cost of liberalised trade (just under $300-billion)”. Source: www.greenleft.au. Thus with the support and collusion of IMF and the Bank these corporations are paying close to nothing for the resources they take from Africa.

Africa has been labelled the world’s most corrupt region because multinational internal mispricing makes up 60% of capital outflow, with corporations declaring profits in tax havens, as opposed to the country of performance. Corporations declare about 40% of their profits in African countries where they operate and siphon the rest into their save havens accounts in order to avoid paying tax which could be used to eradicate poverty. And this is not the end of the corruption and the day light robbery story.

We know how Elf operated as an arm of the French state supporting dictators, looting the resources and establishing flush fund which was used to bribe African leaders so they will look the other way why Elf loot Africa’s oil and gas.

Nicholas Shaxson, author of Poisoned Wells, wrote of the subject: “Magistrates discovered the money from Elf’s African operations supplied bribes to support French commercial, military and diplomatic goals around the world. In exchange, French troops protected compliant African dictators.”

This explains why there are so many corrupt dictators in French-Speaking Africa than anywhere in Africa. Omar Bongo, Eyadema, Mobutu, Lansana Conte, Felix Houphouet-Boigny, Blaise Campore, Sassou Nguesso and Iddriss Deby are some of the compliant leaders who were or have been protected by France. And what happened to the non-compliant African leaders? Your guess is mine. Please find time to read more about Bob Denard, a French who made a career as a mercenary overthrowing African leaders. French author Jean Guisner says: “Denard did nothing that was contrary to French interests - and he allegedly acted in close cooperation with French Intelligence Services”.

In the Elf corruption case Andre Tarallo the real boss of Elf-Afrique “told the court in June 2003 that annual cash transfers totalling about £10m were made to Omar Bongo, Gabon's president, while other huge sums were paid to leaders in Angola, Cameroon and Congo-Brazzaville. The multi-million dollar payments were partly paid to ensure the African leaders' continued allegiance to France. In return for protection and sweeteners from Elf's coffers, France used Gabon as a base for military and espionage activities in West Africa”. Source: Guardian, Nov. 2003.

The real deal is that Elf, Shell BP and their counterparts in Europe and America pay bribes to African leaders to induce them to look the other way why they plunder the resources. Ask any Gabonese or Congolese whether they have benefited from the oil and diamonds and the answer will be a big no.  What is so tragic is that the people know they have oil, diamonds and see these companies processing them everyday yet do not know where it goes, who buys them and where the proceeds go.

In UK former Prime Minister Tony Blair was accused of selling a device with an ageing technology to Tanzania. “The UK sold a useless air traffic control system to Tanzania in 2001 in a scandalous and squalid deal, the House of Commons was told.” Clare Short an MP said, “The deal was useless and hostile to the interests of Tanzania”. She said, “Barclays Bank had colluded with the government by loaning Tanzania the money, but lying to the World Bank about the type and size of the loan.” Ms Short said “Tanzania could have paid much less for the same equipment which cost them £28m”. Shadow international development secretary Andrew Mitchell said “BAE had used ageing technology and said the system was not adequate and too expensive.” Source: BBCNEWS, Wednesday, 31 January 2007.

And it all happened after they had bought Tanzania officials to look the other way while a device with an ageing technology was being sold to the country. BAE colluded with Tony Blair and Barclays Bank to sell a useless commodity at exorbitant price to Tanzania. This is nothing but a continuation of the contempt and impunity in which Europeans have treated Africa before, during and after colonialism. BAE is indirectly saying that Africans do not deserve the latest technology even if they pay cat throat price. It is also a message to Africans that they must develop their own technology and not rely on the generosity of others.

It is no secrete that Shell Oil Company colluded with the corrupt Abacha regime to steal oil, pollute the rivers, wells, creeks and soil and render millions of famers and fishermen in the Niger Delta jobless. Shell “admitted that it inadvertently fed conflict, poverty and corruption through its oil activities in the country. Nigeria contributes to about 10% of Shell's global production and is home to some of its most promising reserves, yet the country is steeped in poverty and conflict”. Source: bbcnews 18 June 2004. So Shell in addition to stealing Nigeria’s oil and polluting rivers, wells, soils also promote corruption, poverty and conflict.   

In DRC about five million people have died in a war whose motive is to satisfy the West insatiable appetite for high quality but low price cell phones, laptop computers, play-stations, jewels, diamond and coltan. And who cares for five million deaths in Paris, London, Brussels, Berlin, New York or Washington anyway? Why has the DRC war not ended? Who supply the rebels their arms and for what and who buys the minerals they mine illegally? Why have Uganda and Rwanda forces crossed several times into DRC? And whose agenda are they pursuing? A report by the UN says it all.

The panel calls for financial restrictions to be levied on 54 individuals and 29 companies it said are involved in the plunder, including four Belgian diamond companies and the Belgian company George Forrest, which is partnered with the U.S.-based OM Group.  The individuals named include Rwandan army Chief of Staff James Kabarebe, Congolese Minister of the Presidency Augustin Katumba Mwanke, Ugandan army Chief of Staff James Kazini and Zimbabwean Parliament Speaker Emmerson Mnangagwa, BBC Online reports (Oct. 21, 2002). The report also accused 85 South African, European and U.S. multinational corporations – including Anglo American, Barclays Bank, Bayer, De Beers and Cabot Corporation of violating the Organization for Economic Cooperation and Development's ethical guidelines on conflict zones.

The guidelines they were accused of violating relate to arming Rwanda, Uganda and Congolese rebels and profiting from their illegal looting of Congo’s minerals as the following excerpt shows:

“Despite the recent withdrawal of most foreign forces, the exploitation of Congo's resources continues, the report says, with elite networks and criminal groups tied to the military forces of Rwanda, Uganda and Zimbabwe benefiting from micro-conflicts in the D.R.C.”"The elite networks derive financial benefit through a variety of criminal activities, including theft, embezzlement, diversion of public funds, undervaluation of goods, smuggling, false invoicing, non-payment of taxes, kickback to public officials and bribery," and added that such pillaging is responsible for much of the death and malnutrition in eastern D.R.C.” Source: www.unwire.org. And so while millions die in Africa with the complicity of the corporations, Europe and North American citizens with all their hypocrisy live to enjoy lavish holidays. And when Africans try to reach Europe the citizens say rain in on them Europe is full no more immigrants. Where do the queens and kings in Europe get the diamonds and gold that they use to show off? Is it not from the blood diamonds from Congo, Sierra Leone and conflict zones in Africa that are smuggled out and sold in Brussels, Zurich, London and New York?

And this is not their only crime. We know how Halliburton established $180m flush fund and bought Nigeria officials to secure a $10b oil contract. We know Acre International of Canada paid $260,000 to secure $8b dam contract in Lesotho. We know Swiss, British, German and French economies and banking institutions have made fortunes by providing save havens for funds looted by Sani Abacha, Mobutu, Omar Bongo, Lansana Conte, Arap Moi and the rest of the dictators in Africa. And it is no secrete Belgium is angry with DRC government for inviting China into the country because they are privy to and beneficiary of all the day light robberies going on in the resource rich but economically impoverished country.

Africans know that these corporations are making fortunes but see no benefits from these fortunes. Ghanaians know gold and diamond are being mined at Obuasi and Akwatia but they do not know where it goes, who buys them and where the proceeds go and the same is true of the oil in Nigeria, Gabon, Cameroon, Algeria, Angola and Equatorial Guinea and as for DRC a nation with one-third of world’s natural resources the little I say the better. This corruption and day light robbery is what has been dressed up as globalisation which Europe, America, IMF and the Bank want Africa and the third world to join. My question is whose globalisation? Is it the globalisation that only those with blue eyes enjoy or what? If the answer is no then the IMF and the Bank should explain why the world is divided between the “whites haves and the coloured have-nots”.

 Dr. Susan Hawley says it all: “Multinational corporations’ corrupt practices affect the South (i.e. Africa, Asia and Latin America) in many ways. They undermine development and exacerbate inequality and poverty. They disadvantage smaller domestic firms and transfer money that could be put towards poverty eradication into the hands of the rich. They distort decision-making in favour of projects that benefit the few rather than the many. They also increase debt that benefit the company, not the country; bypass local democratic processes; damage the environment; circumvent legislation; and promote weapons sales. Bribes put up the prices of projects. When these projects are paid for with money borrowed internationally, bribery adds to a country's external debt. Ordinary people end up paying this back through cuts in spending on health, education and public services. Often they also have to pay by shouldering the long-term burdens of projects that do not benefit them and which they never requested”. Source: The Corner House, June 2000.

And in all these, the Western media have kept silence and have not raise a voice against what their governments, intelligence services, corporations and businessmen are doing to Africans. They prefer instead to criticise China for courting the same African leaders Euro-Americans have been protecting for decades. A clear hypocrisy isn’t it? These are the same criticisms King Leopold II levelled against the Arabs who were competing with him for resources and slaves in Congo and we know what Leopold, the 19^th century Hitler did in DRC in the name of Christianity and civilisation.

The meaning of their criticism is that with China as a fierce competitor, Africans now have a choice not to go to the World Bank and IMF for conditional loans. They also have a choice to either give their resources to Chinese companies or European and American cartels. It may be the beginning of the end of colonialism, slavery, instabilities, dictatorships, corruption and all the ills that Europeans and Americans have been promoting in Africa.

It may be the beginning where Africa’s resources will be bought and payment made to the people and a new chapter that will usher in Africa’s development and close the poverty gap from five thousand years to perhaps one-hundred as observed by Franklin D. Roosevelt.

By Lord Aikins Adusei

Political Activist and Anti-Corruption Campaigner.

 He blogs at www.iloveafrica2.blogspot.com