from Monthly Review
by Michael Watts

[Michael Watts directs the Center for African Studies, University of California, Berkeley.]

Blood may be thicker than water, but oil is thicker than both.
—Perry Anderson, “Scurrying Towards Bethlehem,” New Left Review, July–August 2001

In his 2006 State of the Union address, George Bush finally put into words what all previous presidents could not bring themselves to utter in public: addiction. The United States, he conceded, is “addicted” to oil—which is to say addicted to the car—and as a consequence unhealthily dependent upon Middle Eastern suppliers. What he neglected to mention was that the post–Second World War U.S. global oil acquisition strategy—a central plank of U.S. foreign policy since President Roosevelt met King Saud of Saudi Arabia and cobbled together their “special relationship” aboard the USS Quincy in February 1945—is in a total shambles. The pillars of that policy—Iran, Saudi Arabia, the Gulf oil states, and Venezuela—are hardly supplicant sheep within the U.S. imperial fold.

With surplus capacity in OPEC at an all-time low and speculation running rampant in the commodity exchanges, Big Oil is awash with money. Corporate profits are historically unprecedented. Chevron netted a cool $14 billion in 2005, and first quarter earnings in 2006 are 50 percent higher than the previous year, a historic high obscene enough to have Congress muttering about a windfall profits tax. So-called supply risks in Iran, Venezuela, and Nigeria coupled with the speculative impulses of the oil traders have driven up the price of oil to around $70 a barrel, and a former oilman (surrounded by a posse of former oilmen) stalks the halls of the White House. As if that were not enough, the New York Times (March 27, 2006) reported that through a “vague law” the U.S. government will waive, for the oil supermajors, about $7 billion in state royalties over the next seven years. All of this takes us back to the 1973 oil embargo and President Nixon’s Project Independence, designed to achieve U.S. self-sufficiency by 1980. The policy failed miserably (U.S. dependency upon imported oil in the late 1960s was 20 percent and is expected to be about 66 percent by 2025) and Nixon resorted to maximizing domestic supply and turning to reliable foreign suppliers at minimal cost—just as George Bush intends to do.

It is no surprise, then, that alternative sources of oil should be very much on the Bush radar screen (since conservation strategies or increased gas taxes are conspicuously absent). Cheney’s National Energy Strategy Report in 2001 bemoaned the U.S. oil habit—“a dependency on foreign powers that do not have America’s interests at heart”—long before the State of the Union address. A recent report in the Financial Times (March 1, 2006) makes the new agenda crystal clear. Although Africa is not as well endowed in hydrocarbons (both oil and gas) as the Gulf states, the continent “is all set to balance power,” and as a consequence it is “the subject of fierce competition by energy companies.” IHS Energy—one of the oil industry’s major consulting companies—expects African oil production, especially along the Atlantic littoral, to attract “huge exploration investment” contributing over 30 percent of world liquid hydrocarbon production by 2010. Over the last five years when new oilfield discoveries were scarce, one in every four barrels of new petroleum discovered outside of Northern America was found in Africa. A new scramble is in the making. The battleground consists of the rich African oilfields (see map).

Energy security is the name of the game. No surprise, then, that the Council on Foreign Relations’s call for a different U.S. approach to Africa in its new report, More than Humanitarianism (2005), turns on Africa’s “growing strategic importance” for U.S. policy. It is the West African Gulf of Guinea, encompassing the rich on- and offshore fields stretching from Nigeria to Angola, that represents a key plank in Bush’s alternative to the increasingly volatile and unpredictable oil-states of the Persian Gulf. Nigeria and Angola alone account for nearly four million barrels per day (almost half of Africa’s output) and U.S. oil companies alone have invested more than $40 billion in the region over the last decade (with another $30 billion expected between 2005 and 2010). Oil investment now represents over 50 percent of all foreign direct investment (FDI) in the continent (and over 60 percent of all FDI in the top four FDI recipient countries), and almost 90 percent of all cross-border mergers and acquisition activity since 2003 has been in the mining and petroleum sector. The strategic interests of the United States certainly include not only access to cheap and reliable low-sulphur oil imports, but also keeping the Chinese (for example in Sudan) and South Koreans (for example in Nigeria)—aggressive new actors in the African oil business—and Islamic terror at bay. Africa is, according to the intelligence community, the “new frontier” in the fight against revolutionary Islam. Energy security, it turns out, is a terrifying hybrid of the old and the new: primitive accumulation and American militarism coupled to the war on terror.

The Road to Serfdom

The backdrop to the new scramble is the calamity of African poverty—in the language of Our Common Interest: The Report of The Commission on Africa (2005), assembled by Tony Blair and Gordon Brown, “the greatest tragedy of our time.” They dubbed 2005 the “Year of Africa.” In June of that year the Live 8 concerts drew a global audience of two billion, and a week later the G8 pledged to double aid to Africa ($25 billion by 2010) and forgive the debts of fourteen African states. African poverty had forced itself into the international limelight aided and abetted by a motley crew of humanitarians from Bono to Jeffrey Sachs to the Pope. The milestones in the growing international visibility of the African crisis include the United Nations Millennium Declaration in 2000; the Millennium Challenge Account; the President’s Emergency Plan for AIDS Relief (PEPFAR); and the African Growth And Opportunity Act, all launched by President Bush; and now, the new World Bank African Action Plan. Collectively these palliatives were belated responses to the unacceptable face over two decades of globalization, reform, and the search for the Holy Grail of good governance. On the continent itself, the New Economic Partnership for African Development [NEPAD] (2001) and the revamped African Union (formerly the Organization for African Unity) offered the prospect that poor leadership (the pathologies of the African postcolonial state variously described as patrimonialism, prebendalism, predation, quasi-statehood, the postcolony, and politics of the belly) were to be taken seriously by an African political class that purportedly represented a new sort of democratic dispensation unleashed by a raft of the political transitions during the 1990s.

To see the African crisis, however, as a moral or ethical failure on the part of the “international community” (not least in its failure to meet the pledges promised by the Millennium Development Goals of reducing poverty by half by 2015) is only a partial truth. The real crisis of Africa is that after twenty-five years of brutal neoliberal reform, and savage World Bank structural adjustment and IMF stabilization, African development has failed catastrophically.

William Easterly, former high-ranking World Bank apparatchik, in his new lacerating demolition of structural adjustment—“a quarter century of economic failure and political chaos”—boldly states that the entire unaccountable enterprise of planned reform is “absurd” (http://www.nyu.edu/fas/institute/dri/Easterly/). It was Africa after all that was the testing ground for the Hayekian counter-revolution that swept through development economics in the 1970s. It began with the publication of Accelerated Development in Sub-Saharan Africa: An Agenda for Action (known as the “Berg Report”), the first in a series of World Bank reports that focus on the development problems of sub-Saharan Africa. This was the first systematic attempt to take the Chicago Boys experience in post-Allende Chile and impose it on an entire continent. The ideas of Elliot Berg and his fellow travelers marked the triumph of a long march by the likes of Peter Bauer, H. G. Johnson, and Deepak Lal (ably supported by the monetarist think tanks such as the Institute of Economic Affairs and the Mont Pelerin Society, and the astonishing rise to power from the early presence of Leo Strauss and Fredrich Hayek of the “Chicago School”) through the development institutions like the World Bank. Long before shock therapy in Eastern Europe or even the debt-driven “adjustments” in Latin America, it was sub-Saharan Africa that was the playground for neoliberalism’s assault. According to the United Nations, twenty-six of thirty-two sub-Saharan states had a “liberal” economic regime by 1998. Almost all had experienced some sort of structural adjustment program in the wake of the Berg report.

If the 1980s were Africa’s Lost Decade with collapsing commodity prices, deteriorating terms of trade, and the first crashing waves of IMF austerity—then how might one characterize the last fifteen years, in which the benefits of reform were to be finally felt, but in which life expectancy across sub-Saharan Africa steadily fell and per capita income has at best stagnated? And all of this during a period in which net official overseas development aid fell by 40 percent (from $18.7 to $10 billion).

In Africa, the court of neoliberalism has been concluded, and the verdict is in. The picture is not pretty. Over the last thirty years there has been no growth in income for the average African. Life expectancy is forty-six years. Twenty-three of forty-seven sub-Saharan states have currently a GDP of less than $3 billion (ExxonMobil’s net profit in the first quarter of 2006 was $8 billion). By 2005, thirty-eight of the top fifty-nine priority countries that failed to make headway toward the Millennium Goals were sub-Saharan states, and according to the Chronic Poverty Report 2004–05, all sixteen of the most “desperately deprived” countries are located in sub-Saharan Africa. Over 300 million people live on less than $2 per day—and this is expected to rise to 400 million by 2015. One-third of the population of the continent is undernourished; stunting rates run at almost 40 percent. According to a United Nations Food and Agriculture Organization assessment in January 2006, twenty-seven countries are in need of emergency food relief. As I write, the famine in Somalia is of the order of the catastrophic food crisis that devastated the region in the mid-1980s; the nightmare in Darfur has spread to Chad with the prospects of hundreds of thousands of refugees being pushed and shoved across the greater Chad basin in a way all too familiar to the central African crisis a decade earlier.

The neoliberal tsunami broke with a dreadful ferocity on African cities, and the African slum world in particular. Reform—the privatization of public utilities creating massive corporate profits and a decline in service provision, the slashing of urban services, the immiseration of many sectors of the public workforce, the collapse of manufactures and real wages, and often the disappearance of the middle class—was remorselessly anti-urban in its effects, as Mike Davis documents in Planet of Slums (Verso, 2005). As a consequence, African cities confronted the horrifying realities of an economic contraction of 2–5 percent per year combined with sustained population growth of up to 10 percent per annum (Zimbabwe’s urban labor market grew by 300,000 per year in the 1990s while urban employment grew by just 3 percent of that figure). In Dar es Salaam public service expenditures per capita fell by 10 percent a year in the 1980s; in Khartoum adjustment created one million “new poor”; and urban poverty in Nigeria almost tripled between 1980 and the mid 1990s. No wonder that 85 percent of urban growth in Nairobi, Kinshasha, and Nouakchott in the 1980s and 1990s was accommodated in the slums barracks of sprawling and ungovernable cities. Everyone’s worst urban nightmare—Lagos—grew from 300,000 to 13 million in over fifty years and is expected to become part of a vast Gulf of Guinea slum of 60 million poor along a littoral corridor 600 kilometers stretching from Benin City to Accra by 2020. Black Africa will contain 332 million slum dwellers by 2015, a figure expected to double every fifteen years. The pillaging and privatization of the state—whatever its African “pathologies”—and the African commons is the most extraordinary spectacle of accumulation by dispossession, all made in the name of foreign assistance. The involution of the African city, notes Davis, has as its corollary not an insurgent lumpenproletariat but rather a vast political universe of Islamism and Pentecostalism. It is this occult world of invisible powers—whether populist Islam in Kano or witchcraft in Soweto—that represents the most compelling ideological legacy of neoliberal utopianism in Africa.

As if to confirm the catastrophism of commentators like Robert Kaplan, the calamity that is African development ran straight into another: the HIV/AIDS epidemic. While new epidemiological data suggests that the prevalence rates and possible demographic and socio-economic impacts for much of western and northeastern Africa may have been exaggerated (Guardian, April 21, 2006), the pall that the disease has imposed on some regions is incontestable. The impact of HIV/AIDS—with an 8 percent adult prevalence and 28 million infected, Africa accounts for 2.3 million AIDS deaths per year—has transformed life expectancy in southern and eastern Africa. Twenty years ago, a male child could reasonably expect to live to sixty in Botswana; currently it is about thirty. By 2010 there will be more than 50 million orphans in Africa.

Of course, there are those within the development business for whom the failure of secular nationalist development is a result not of too much neoliberalism, but not enough. The complaint here, typically from those within the free-market establishment, is that adjustment and stabilization has never really been implemented (a right-wing version of the left-wing claim that adjustment was asking African ruling classes to commit political suicide). There is, of course, some truth to this (but the cry of any failure will always be “we were defeated by not going far enough”). Despite the radically uneven geographical patterns of neoliberal governance and rule, the overall tendency has been to increase social inequality and expose the poor to austerity and marginalization. And the reality is that in Africa World Bank reforms, and the pressures imposed by the WTO from the mid 1990s onwards, did have drastic consequences for trade and investment—the litmus test of neoliberal development—seen in the widespread dismantling of state marketing boards and of trade protections. And here the picture is devastating. In absolute terms African exports grew quite rapidly from 1963–2000, but at a much slower rate than world trade generally. Africa’s share of world exports fell from almost 6 percent in 1962 to 2 percent in 2000. In non-oil products (food and manufactures) growth rates of exports between 1980 and 1998 were miserable. It has been argued that given African conditions (income, geography, and socioeconomic conditions), the performance is “average.” Yet it is incontestable that African exports are characterized overall by a “disintegration from Northern markets” and “isolation from more dynamic developments in the composition of international trade” (Peter Gibbon & Stefano Ponte, Trading Down [Temple University Press, 2005], 44). UNCTAD showed that of the exports from twenty-six African states, the average concentration on primary exports has remained basically unchanged (roughly 85 percent) since 1980. In all categories, sub-Saharan Africa has failed to move up the value-added chain away from primary commodities.

What is especially striking is that the fear that Africa was largely marginal to the circuits of capitalist accumulation and global resource flows during the 1980s and might be marginalized further, in some respects, proved to be a massive understatement. It is almost shocking to think that in the 1970s, Africa accounted for 25 percent of FDI to the third world. By 2000 it had crashed to 3.8 percent (Africa’s share of world FDI is currently less than 1 percent). Over the period 1981–85, FDI inflow into Africa was running at $1.7 billion per annum; by 1991–95 it had grown to $3.8 billion. Yet as a percentage of all developing country FDI inflow, the figure represented a secular decline from 9 percent to less than 5 percent (all-in-all miniscule compared to South and East Asia and Latin America). Between 1995 and 2001, FDI inflow amounted to $7 billion per year but almost two-thirds of the portfolio was destined for three countries (Angola, Nigeria, and South Africa, in which oil FDI accounted for 90 percent of all FDI inflow, see figure 3). Half of Africa’s states had effectively none. Two-thirds of FDI was derived from the same three countries (United Kingdom, Germany, and the United States) that had dominated FDI supply in 1980. According to the World Investment Report (2005), FDI into Africa is currently $18 billion; four countries account for 50 percent, and the top ten almost three-quarters. To put the matter starkly, the vast bulk of private transnational investment—the hallmark of success for the neoliberal project—was monopolized by a quartet of mining-energy economies. The remainder of the continent was essentially insignificant. From the vantage point of the Year of Africa, investment flows into the continent have been a grave disappointment.

The African accumulation crisis, and the dynamics of capital and trade flows, are in practice complex and uneven. In addition to oil (and the very few cases of manufacturing growth in places like Mauritius which are little more than national export-processing platforms), the other source of economic dynamism is the (uneven) emergence of global value chains. This can be seen especially in relation to high-value agricultures (fresh fruits and vegetables) in South Africa, flowers in Kenya, green beans in Senegal. Such forms of contract production, typically buyer-driven commodity chains in which retailers exert enormous power, have created islands of agrarian capitalism that contribute to and deepen patterns of existing inequality across Africa and further the interests of business elites, which are often not African. The deepening of commodification in the countryside in tandem with demographic pressures (caused as much by civil war and displacement as high fertility regimes) has made land struggles a vivid part of the new landscape of African development.

It is no surprise that against this backdrop the development establishment flails around wildly. On the one side stands former World Bank economist William Easterly for whom all aid (“planning”) has been a total (and unaccountable) failure. The solution is not to plan at all. Rather than planners—in his view the IMF/IBRD stenographers are really Stalinists in neoliberal garb—and the likes of Bono and Tony Blair, we need to find a raft of “searchers” like microcredit guru Mohammed Yunus. On the other stands the one-man industry otherwise known as Jeffrey Sachs who seeks to expand foreign aid—$30 billion a year for Africa—and to initiate a Global Compact by which “the rich will help save the poor,” who are as much hampered by poor physical geography as governance failure.

In reality what is on offer is an even bleaker world of military neoliberalism. At one pole are enclaves of often militarily fortified accumulation (of which the oil complex is the paradigmatic case) and the violent, sometimes chaotic, markets so graphically depicted in the documentary film Darwin’s Nightmare. At the other pole are the black holes of recession, withdrawal, and uneven commodification. These complex trajectories of accumulation are dominated at this moment by the centrality of extraction and a return to primary commodity production.

Petropolitics and the New African ‘Gulf States’

Currently Africa is the center of a major oil boom, an index of the centrality of the primary commodities sector as the most important source of capitalist accumulation on the continent. The continent accounts for roughly 10 percent of world oil output and 9.3 percent of known reserves. Though oil fields in Africa are generally smaller and deeper than the Middle East—and production costs are accordingly 3–4 times higher—African crude is generally low in sulfur and attractive to U.S. importers. As a commercial producer of petroleum, Africa arrived, however, rather late to the hydrocarbon age. Oil production in Africa began in Egypt in 1910 and only in earnest in Libya and Algeria (under French and Italian auspices) in the 1930s and 1940s. Now there are twelve major oil producers in Africa—members of the African Petroleum Producers Association—dominated, in rank order of output, by Nigeria, Algeria, Libya, and Angola which collectively account for 85 percent of African output. All of the major African oil producers are highly oil-dependent. Among the top six African oil states, petroleum accounts for 75–95 percent of all oil export revenues, 30–40 percent of GDP, and 50–80 percent of all government revenues. Up until the 1970s North Africa dominated production of oil and gas on the continent, but in the last three decades it has moved decisively to the Gulf of Guinea encompassing the rich on and offshore fields stretching from Nigeria to Angola. The Gulf—constituted by the so-called West African Gulf States—has emerged as the predominant African supplier to an increasingly tight and volatile world oil market. The Washington D.C. think tanks and the phalanxes of oil lobbyists are deeply concerned with Gulf of Guinea security, U.S. interests, and U.S. engagement there.

Gabon and Equatorial Guinea are the only African oil producers with high oil per capita (so-called petroleum endowments), comparable to the oil rich and sparsely populated states such as Kuwait and Qatar. Only Nigeria ranks within the world’s top fifteen oil producers. Nigeria, Algeria, and Libya are respectively the world’s eighth, tenth, and twelfth largest oil exporters. These three states and Gabon FULL ARTICLE

Appeal from Monthly Review:

Dear Reader,

We place these articles at no charge on our website to serve all the people who cannot afford Monthly Review, or who cannot get access to it where they live. Many of our most devoted readers are outside of the United States. If you read our articles online and you can afford a subscription to our print edition, we would very much appreciate it if you would consider taking one. Please click here to subscribe. Thank you very much.

John Bellamy Foster