NEPAD: The Programme of South African Capital

Oupa Lehulere* argues that NEPAD is an economic programme of South Africa’s globalising multinational corporations.

At the World Summit on Sustainable Development, held in Johannesburg in 2002, the heads of states from many countries of the world endorsed the New Partnership for Africa’s Development (NEPAD) as a development path for the African continent. This endorsement follows a series of meetings and forums in which heads of states, heads of the world corporations, and various multilateral institutions endorsed NEPAD. No plan coming out of the continent of Africa has received so much publicity, and has been endorsed by so many meetings and forums as has been the case with NEPAD.

Within African civil society organisations, on the other hand, there has also been a lot of activity – meetings, forums and demonstrations – against the adoption of NEPAD by the African heads of states. Various individuals, mass movements, and networks of African civil society organisations have criticised NEPAD and pointed out that while it is being presented as a development path for the continent, there has been little consultation with the people of the continent and their organisations. In addition, many of these organisations and movements have gone further in their criticism and have argued that NEPAD represents a reincarnation of the (economic) structural adjustment programmes that were imposed on the governments and peoples of the continent in the 1980s and 1990s.

Much has been written on the neoliberal economic strategy that lies at the heart of NEPAD. In this article I will focus mainly on whose agenda does NEPAD represent. In other words, I will provide some thoughts on the question: which socio-economic and political forces are best served by NEPAD? First, however, we need to look at the basic elements of NEPAD, and the critique that has been advanced against the approach adopted in the plan.

NEPAD – its background, aims and plan

NEPAD was adopted by the heads of African government in July 2001, and has since undergone a name-change from the New African Initiative.

In Abuja, October 2001, a few changes were made and name NEPAD finally adopted. The adoption of NEPAD came against the background of a number of developments in the African and the world economy. These developments are crucial in not only providing the context for the success or failure of NEPAD, but also for understanding the nature of the interests that are driving the NEPAD project. The most important of these developments are:

• Two and a half decades of global economic slowdown following the end of the post world war economic boom.

The end of the cold war and over a decade of United States and corporate inspired integration of the global economy Increase in poverty and inequality in Africa and the world

• Deterioration of Africa’s terms of trade, and Africa’s slide into a debt trap

The imposition of structural adjustment pro- grammes on African countries

The drift towards anti-democratic and authori- tarian practices, even as there is a growth of ‘multi-party electoral’ systems

A generalised social and ecological crisis in Africa

Against this background NEPAD has set itself a number of aims. These are:

To eradicate poverty and move Africa towards sustainable development

• To promote the role of women

• To prevent conflict and promote democracy and human rights

To ensure macro-economic stability, including appropriate fiscal and monetary targets, and stable financial markets

NEPAD’s strategy for lifting Africa out of poverty and marginalisation is made up of the standard package of prescriptions from the International Monetary Fund and the World Bank. These include:

• A commitment to the centrality of free (capitalist) global markets as engines for development

An accelerated integration of Africa into the present globalisation process and global economy Privatisation of the provision of infrastructure

Endorsement of the “multi-pronged poverty reduction programmes that are championed by a number of multilateral development agencies and donors” (NEPAD)

• Support for private enterprise and a commitment to develop a shared vision with business Market access to industrialised countries (no mention of non-reciprocal trade)

• Creating favourable conditions for capital flows

• Endorsement of the Highly Indebted Poor

Countries initiative (HIPC), and

• A market based approach to environmental renewal

In the service of multinational corporations

As I indicated, I will not focus on a critique of the approach adopted by NEPAD, except to agree with many civil society critiques that this neoliberal package will neither lift Africa out of poverty, nor reverse the marginalisation of the continent. Many critiques have noted that the approach adopted by NEPAD represents the adoption, by African governments, of the policies that have been championed by the IMF and the World Bank in the form of structural adjustment programmes. These two institutions and the World Trade Organisations (WTO), represent the interests of the United States and other OECD states and corporations. To this extent, NEPAD represents the continuation of the programmes and initiatives aimed at consolidating the interests of global corporations, and the various governments that promote and protect these interests. This explains why NEPAD has been received with acclaim by many governments and corporations based in the north.

The interests of these corporations and governments have been and are being promoted by a number of multilateral institutions. In a few cases, northern governments and corporations relate to African government on a multilateral basis. In most instances, however, each African government has to face its ‘masters’ on its own. Up to now African governments have been unable to face the ‘north’ as a bloc. In the cases when this was attempted, like with the Lagos Plan (1980) and other similar initiatives, these have failed under the pressure of opposition from the ‘north’. While the ‘north’ has welcomed NEPAD, the contradictions that exist among the different governments within the ‘northern alliance’ of dominant economic powers will not necessarily be served by treating, and relating to Africa as a single bloc of countries as is proposed by NEPAD. To understand this contradictory process of, on the one hand, promoting the interests of Northern economic interest, and on the other, creating or supporting institutional frameworks (NEPAD) that will militate against aspects of these interest, we need to look at the role of the South African state in the NEPAD process. In other words, we need to ask: what is ‘new’ in the ‘old’ context of neoliberal policies and structural adjustment programmes on the continent?

South Africa’s globalising multinationals

The South African economy is probably the largest, and most certainly the most sophisticated on the African continent. It has a highly developed physical infrastructure, financial markets, business legal systems and so on. What is more important about the South African economy is the existence of large and well-resourced multinational corporations that are ‘home-grown’, that are based in South Africa. In various industries these corporations are serious competitors against some of the largest multinational corporations around the world. Some of the industries in which South African multinational corporations are serious players are mining, energy, defence and, to a lesser extent, in financial services and certain consumer products (like beer, for example). In the context of the African, continent South African companies are dominant in just about all the economic sectors one can think of. Over the last few years there has been a rapid penetration of various African markets by these groups and corporation. This penetration has been most pronounced in energy (Eskom), in banking and financial services (all four of the large banking groups), mining and infrastructure, and also retail.

The export of capital from South Africa to the rest of Africa has been supported and facilitated by the South African state, especially since the democratic transition in 1994. These corporations, however, have not only been involved in the export of capital to Africa, but have also engaged in the export of capital to the metropolis of the north. Witness the spate of foreign listings in the world’s biggest stock exchanges by these groups (with the blessing of the ANC-led government) in the last few years. We have, therefore, in South Africa a large and well-resourced capitalist class with serious intentions to become global players. This ‘globalising’ capital is the key social force behind an entire set of changes in South African internal and external economic relations.

From the Gear to Doha

As with many neoliberal programmes of its kind, the ANC government’s Growth, Employment and Redistribution strategy focused on three key areas: the liberalisation of financial markets (in particular the exchange rate regime), the liberalisation of trade, and the reorganisation of the state and its role in the economy (privatisation being a key element). These three major initiatives combined to produce a massive export of capital from South Africa over the last few years, the SA-EU trade agreements with its emphasis on free trade, and the recent debacle at the WTO meeting in Doha where South Africa split ranks with many G77 countries and supported the USA and the EU in pushing for a new round in the world trade negotiations.

Within South Africa, we have seen the acceleration of the privatisation programme and fiscal austerity leading to cuts in social services. The biggest beneficiaries of these policy orientations have been the large South African and international multinationals, who posted record profits even in the context of quite sluggish economic growth in the country. For example, against a backdrop of around 3% growth in GDP, year on year profits in 2000 were around 17%!

NEPAD is an agenda of SA multinationals

While NEPAD presents itself as a programme for the continent, it is clear that it is framed in a way that can only benefit South African multinationals. The emphasis on integration into the globalisation process, free markets, and free movement of capital, were precisely the measures that were resisted by countries like Nigeria when the split in Doha took place. Only the South Africans remained consistent to the spirit of unfettered markets that was being promoted by the rich north. NEPAD provides a codification of the spirit of Doha, of the (temporarily) defeated Multilateral Agreement on Investment, and the entire programme of the IMF and the World Bank.

Given their origins in the apartheid era, these multinationals were unable to impose their hegemony on the continent because of the political marginalisation of South Africa during those years. Now that this obstacle has been removed, and now that they have a state and a political party (ANC) that is willing to spearhead the recolonisation of the continent, South African capital is taking over just about every industry there is to take in Africa, and NEPAD is its title deed.

In the context of the new empire headed by the United States, however, South Africa’s corporations are junior partners. Through NEPAD, the South African state and multinationals are positioning themselves as the official intermediaries between the headquarters of empire – Washington – and the rest of the continent. Thus, to paraphrase NEPAD, South Africa’s developed “entrepreneurial, managerial and technical capacities” mean that South Africa – its state and its corporations – will be the ‘brokers of choice’ when the further penetration of Africa by global multinationals in undertaken.

Over the many months since NEPAD has been launched, the emphasis has been on the attempt by its promoters to raise foreign aid to kickstart NEPAD. This is a much less important and subsidiary issue in the context of NEPAD. The real implementation of NEPAD has been underway at least since the early 1990s, and definitely since the post 1994 elections: it is the rapid penetration of the African economy by South African capital.

* Oupa Lehulere works at Khanya College and is active in the social movements. He is also a member of the editorial collective.