The scramble for Africa

the latter part of the nineteenth century. The scramble for Africa led to the division of the continent among a small number of imperialist powers. The colonial system established by Britain, France, Portugal, Belgium and Germany assured their control over sources of raw materials, markets and spheres of investment. European settlement in areas such as Algeria, Kenya, South Africa and Rhodesia, which and land suitable for agriculture, were rich in accelerated the process of imperialist penetration.

The extension of capitalist rule to Africa completed the formation of a division of labour on a world scale. The imperialist nations transformed the colonies to serve the needs of their domestic economies. The African countries were forced to play the role of producers of raw materials and foodstuffs. Later they became important as markets for the manufactured goods of the metropolitan countries. In the early days of imperialism local industry was actively discouraged by colonial powers determined to prevent the emergence of competition. European capital was channelled into mining and agriculture, and the development of the productive forces in Africa was subsequently concentrated this restricted economic base. The rest of the economy was condemned to stagnation.

The restricted character of capitalist development in Africa made it particularly vulnerable to recession in the world economy. The initial period of imperialist expansion was succeeded in the twentieth century by recurrent capitalist crises. Fluctuations in the prices of raw materials had a devastating impact on their producers, who made up over 90 per cent of the African population, In the crisis years of 1929-32, for example, the value of Africa's commerce fell by 42 per cent.! Those sectors of the economy which had developed along capitalist lines now became the victims of recession, large plantations and mining firms cut back production or shut down altogether.

The crisis forced the imperialist powers to strengthen their colonial links as a defence against their competitors.

Various protectionist measures were introduced in the 'thirties to safeguard the economic interests of the metropolitan countries. As a result France and Britain in particular were able to relieve the pressure on their balance of payments. However, these measures did little to overcome the stagnation in the development of the forces of production in Africa. In the ten years up to 1938 the only countries where commerce expanded beyond the 1929 level were South Africa, Northern and Southern Rhodesia, Kenya and Sierra Leone? In the case of Sierra Leone this was the result of increased production of iron ore and gold; the rest enjoyed the advantages of preferential access to British markets. With their rich natural resources and large numbers of European settlers cager to exploit them these countries became the growth points of capital accumulation in Africa.

South Africa, with the special advantage of gold production, had a particularly high rate of accumulation.

During the Second World War demand for African primary products soared. Industries were established to process food and raw materials to fuel the war efforts of the imperialist countries. In Latin America the political independence of the backward capitalist countries allowed them to take advantage of the war to increase significantly The scramble for Africa their rate of capital accumulation. By contrast, the development of the African countries was constrained by their colonial status. A series of war-time marketing controls ensured that the African colonies gained little in export earnings; they were mere appendages of the Allied war economy. According to bourgeois economists Africa underwent a period of economic expansion between 1945 and 19603 Compared with the previous phase of capitalist develop ment the tempo of accumulation did increase. The post-war reconstruction of Europe, followed by the Korean War, created a rising demand for raw materials and foodstuffs.

The resulting boom in commodity prices on the world market stimulated the African economies. The volume of exports from West Africa quadrupled between 1945 and 1955 and there was a sixfold increase in imports.4 These developments were accompanied by increasing state investment in the infrastructure necessary to stimulate the export trade. As the African market expanded British Table 1 Comparative rates of growth of industry 1938-605 Annual grown 19260 Area Africa 3.6 Mining 7.9 Total industry 6.0a Africa, excluding Southern Africa 5.1 Mining Total industry 8.6 7.4a World 3.4 4.8 Manufactu otal indust 4.6 Ministrial countries 3.3 Manufacture 4.8 Total industr 4.5 daup to 1957 only !!!!!!!!!| 1 I Forbes Munro, Africa and the international economy, I M Dent and Sons Ltd, London, 1976, p150. This phenomenon persists. According to the recent World Bank Report: 'Some of the poor countries in sub-Saharan Africa - where the difficulties in expanding manufactured exports are particularly great depend heavily on exports of cocoa, copper, or sisal, whose prices have been among the most volatile in recent years.'

World Bank, Annual report 1978, p13.

Forbes Munro, op cit, p164.

2 3 A G Hopkins, An economic history of West Africa, Longman, London, 1973, p267. 4 Ibid. 5 Sce L Y Thomas, 'Industrialisation and the transformation of Africa: an alternative strategy to MNC expansion, in C Widstrand, ed, Multinational firms in Africa, Upsala, 1975, p332. 5

Table 2 Sector Total Table 3 Area Developed countries Africa (total) North Africa West Africa East Africa Central Africa Southern Africa ular sectors and unevenly North Africa 20 Mining and quarrying 31 Agro allied industries 27 Light industries Heavy industries 22 100 Table 1 indicates a very high rate of industrial growtt in colonial Africa. But these high figures obscure the fac that these rapid growth rates are measured over a small base. In addition industry in Africa was virtually confined to the processing of primary commodities and the provision of consumer goods and services. Table 2 shows the structure industry. It illustrates that most industrial activity was in mining or in industry based on agriculture.

But even these figures give a distorted picture because they fail to take into account the limited role played by manufacturing industry in the economy as a whole; on average nanufacturing accounted for only 1l per cent of tota African Gross Domestic Product (GDP).'

Although global statistics on productivity are not available, comparisons of per capita income give indication of the limited character of capitalist development in Africa. Table 3 reveals the backwardness of the forces of production in both industry and agriculture. The low levels of per capita income demonstrate the subordinate position of the continent in the international division of labour. In Africa per capita income in industry was cent of that in the advanced Comparative per capita income in Africa and developed countries 1960 (U55j Agriculture Industry 120 480 41 25 48 22 8 41 12 31 37 28 52 166 Capitalism in Africa was inefficient, restricted to particforces of production was restricted to areas with European settlers, mineral wealth and fertile land. Elsewhere capital was confined to small export enclaves and the majority of the population existed as cash crop or subsistence farmers.

For imperialism South Africa became the main area of interest, its considerable natural wealth paving the way for industrialisation in the early post-war period. By the late "fifties South Africa's manufacturing output represented more than half of all output south of the Sahara.?

The ruse of At an industry 196063 West Central Africa Africa 33 36 28 41 18 8 100 100 Other All sectors sectors - 1200 600 51 117 132 62 25 74 29 72 38 103 271 489 Ill developed, Expansion of the 1950 Africa Total North Africa Africa 27 34 29 30 31 24 12 19 24 21 25 24 100 100 100 Table 4 Item and country group Gross Domestic Product Sum of country groups Developed market economies entrally planne conomie Developing countries Industrial production Sum of country group: Developed market Centrally planned Developing countries Agricultural productio Developed markeroup 6 West Central East Africa Africa Total 27 30 26 28 45 31 14 16 21 27 28 100 100 100 100 The post-war boom and decolonisation During the post-war boom the backward capitalist countries underwent a period of rapid growth. This expansion was the result of the high rate of accumulation in the advanced capitalist countries. The expansion of trade and new spheres of production together with increased export of capital stimulated industrialisation in the backward capitalist world. Table 4 shows the annual growth rates between 1961 and 1972. This development of capitalism was by no means universal. Capital was invested in countries such as Mexico and South Korea which had particular advantages ... oil, minerals or a developed infrastructure and industry. In addition assembly operations were established in low wage areas such as Hong Kong and Singapore. In most backward capitalist countries little changed; industry ticked over while agriculture remained stagnant.

Vorld production: annual growth rates, by countr proup, 1961-7211 Average annual rate of change 1961-70 1971 5.4 5.0 6.7 5.5 6.7 5.8 2.6 2.5 1963 27 29 21 23 Change from preceding year 1972 4.1 5.5 3.3 5.6 4.4 6.6 1.7 6.4 3.2 -0.8 5.7 0.7 0.8 - 1.6

The high growth rates indicated in Table 4 disguise the fact that in about a fifth of the backward capitalist countries total production lagged behind population growth.11 The countries which grew rapidly contained less than a quarter of the total population of the developing countries.

other developing countries growth in Africa was slow: incomes grew at only 1.5 per cent per year between 1961 and 1970, compared with an average for backward capitalist countries of 5.2 per cent.12 Black Africa experienced a very low rate of growth.13 The 'sixties are known as the era of African independence. Decolonisation was the response of the imperialist powers to the pressure of the African masses for national liberation. Anti-colonial unrest leading to sporadic armed insurrection showed that capitalism could no longer be maintained by direct oppression. The imperialist strategy guaranteed the maintenance of capitalist relations by handing over power to the African middle class. Selected bourgeois politicians were placed in control of newly constituted governments. Through this charade of independence social stability was maintained. One observer pointed to the divergent interests of the African people and their new leaders: "The goals of the leaders and the masses were never really the same - the leaders wished to Africanize the existing system, while the masses appeared to wish its destruction, 14 This concession of political independence modified but did not alter the nature of imperialist domination in Africa.

The advanced capitalist countries continued to exercise control through the operation of the world market. Commo- African economy, ratifying its inferior position in the international division of labour. The most important outcome of the end of direct colonialism was the erosion of French and British monopoly in Africa. The USA, West Germany and Japan were now able to penetrate former British and French spheres of influence. Although still modest in absolute terms, the total value of American direct investments | (excluding South Africa) increased from $ 147 million in 1950 to $2612 million in 1970.15 Similar movements can be traced for West German and Japanese capital.

The entry of this new foreign capital did not alter the structure of the African economy. Even as recently as 1967, 56.5 per cent of foreign investment went into raw material extraction 16 In the late 'sixties it was still the areas with valuable raw material deposits or thriving plantations that experienced higher growth rates - Nigeria (oil), Zambia and Zaire (copper), Ivory Coast and Kenya (valuable cash crops). Nigeria in particular attracted substantial foreign capital. Between 1967 and 1971, its stock of foreign investment almost doubled, making it the fifth most important investment area in the backward capitalist As a result of the world expansion of capital some industrialisation did take place around the export enclaves.

However, most of the manufacturing industry introduced in the 'sixties was engaged in processing minerals and agricultural products for export. Virtually no progress was made in the production of consumer durables and means of production 18 Table 5 shows the backward character of African industry in 1972, its concentration in the production of food and clothing and its small-scale character.

Capitalist development in agriculture was more retarded and uneven than in industry. A small cash crop existed alongside a massive subsistence sector. Cyclical fluctuations in commodity prices had a debilitating effect on cash cropping and low levels of productivity prevailed in the subsistence sector. Problems of soil erosion and pests were compounded by the obsolete social structure of the rural areas. The forces of production in agriculture contin- 7 The structure of African industry 9 Table 5 22 2 22 2 per estab Groups lishmen Food, beverages 25.8 and tobacco 24.3 38.1 75 28.8 32.8 Textile and clothing 19.0 90 11.3 7.0 4.1 49 Vood and furnitu aper, printing ar 7003 ublishin 4.4 ight industri 68.4 and plastis petroleum 6.1 10.5 135 13.4 Non-metallic mineral 6.2 0.4 asic metal industrie abricated met products, machinery 12.4 13.8 12.3 71 and equipment 31.6 28 3.2 0.7 ther manufactur 33.4 eavy industr 29.7 84 100.0 100.0 100.0 Total 79 ued to stagnate throughout the 'sixties. By 1973 food production could not keep up with the growth in population. Capitalism could not feed the rural population of Africa. To the superficial observer, the deepening recession of the 'seventies has had little impact on Africa. According to the International Monetary Fund (IMF), 'the average rate of growth in output has been relatively well sustained in the non-oil developing countries' 20 However, comparison of rates of growth in GDP in Africa and the advanced capitalist countries reveals little about the African economy. More significantly, United Nations statistics confirm the stagnation and decline in food production. During the years 1971 to 1976 food production in Africa increased by only 1.4 per 6 Ibid. 7 Ibid. 8 Ibid. Forbes Munro, op cit, p200.

10 United Nations (UN), World Economic Suney 1972, New York, 1973, p12. 11 Ibid, p78. 12 A B Spira, "The world economy, external debt and prospects for development financing', in World Development, lebruary 13 In this article black Africa refers to sub-Saharan Africa other than the Republic of South Africa.

14 H F Weiss, Political protest in the Congo, Princeton, 1967, Agodo, The determinants of US private manufacturing investments in Africa, Ph D thesis, Northwestern University, Illinois, 1946, pl. Figures on direct investments are of limited value as they include not only new capital flows but also H Hvem, "The extent and type of direct foreign investment in Africa', in Widstrand, op cit, p70.

R Bailey, Africa's industrial future, Westview Press, Boulder, From Economic Commission for Africa (ECA), Survey of economic conditions in Africa, 1972.

20 International Monetary Fund (IMI), Annual Report 1978, pl1.

According to this report rcal GDP in Africa grew by 2.2 per cent in 1977.

THE CRISIS AND IMPERIALISM

capitalist world. maintenance of brutally oppressive ist heartlands. The crisis has stimulated 1956 103.6 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 GR: Gross rate of return NR: Net rate of return cent annually. In 1977, it actually fell by 0.8 per cent.?- For the 80 per cent of the population of sub-Saharan Africa whose survival depends directly on agriculture the agrarian problem transcends all concern with growth in GDP.

Recurrent shortages of domestic supplies have led to increasing reliance on imported foods. The result has been a net trade deficit in major food products of almost $1300 million per year in the 'seventies22 This deficit, part of a mounting trade imbalance with the imperialist countries, has been financed through borrowing. A massive influx of private and state loans from the advanced capitalist world has had the effect of cushioning Africa from the full impact of the crisis. To explain why the imperialist nations have been prepared to lend vast amounts to Africa we have to look at the effects of the crisis on the world economy.

The present world recession has thrown into sharp relief the main features of the imperialist epoch.23 to overcome the crisis capitalists have tried to expand accumulation in the more profitable parts of the world, the borders of the imperialist countries. While investment has been stagnant in the OECD24 countries there has been a steady flow of capital to the backward Capital can secure higher profit rates in these countries because of the lower organic composition of capital: a given investinent can exploit more living labour in proportion to the machinery employed. The existence of a large pool of unemployed workers and the conditions also ensure lower wages than in the imperialcapitalist class of each nation has sought to solve its prob- Table 6 Rate of return in manufacturing 27 Canada GR NR GR 103.2 88.4 82.2 89,6 86.9 83.4 75.9 68.5 85.0 78.3 84.6 79.3 71.9 90.9 77.2 86.7 69.9 82.9 77.5 92.9 85.0 80.2 97.1 88.1 83.8 102.5 73.1 112.4 80.0 75.6 67.2 114.1 69.9 60.5 101.7 75.6 67.2 102.1 74.6 66.4 90.9 64.8 54.5 74.7 66.3 56.5 77.2 71.5 63.2 84.6 79.3 73.5 85.9 80.3 73.9 75.1 69.9 61.3 80.5 55.7 91.3 65.8 living and working economic nationalism. The United States NR GR 84.5 75.5 58.3 80.2 88.3 84.5 93.3 99.7 106.7 119.2 118.9 100.3 99.7 85.1 64.1 68.2 78.4 80.5 64.7 74.1 89.8 8 hopes to capture America, Asia and Africa.

into a slump. capitalist enterprises. by the 1974 oil crisis. Germany Japan NR GR 108.4 95.0 92.1 118.1 112.8 90.1 119.2 92.1 137.8 91.3 135.1 85.4 124.9 76.3 123.7 71.3 122.1 76.7 79.2 1139 115.8 70.8 125.5 70.4 80.4 132.2 130.0 78.3 120.7 71.3 109 5 64.2 57.9 100 5 86.6 56.7 81.5 55.8 82.9 48.8 52.9 36.7 lems at the expense of rival national capitals. Growing export markets and sources of raw materials. Each national bourgeoisie relies on the state to strengthen its competitive - to protect home markets, underwrite exports and finance foreign investment. Every imperialist power a larger share of the markets of Latin materials are essential in order to limit the rise in the organic composition of capital and hence modify the effects of the tendency of the rate of profit to fall25 This is why the imperialist nations are desperate to establish control over raw material sources. This year's Strategic Survey published by the International Institute for Strategic Studies noted that the most serious security challenge facing the West in the 'eighties is: 'How to ensure the supply, from an unstable Third World, of the raw materials on which its economic well-being, stability and political cohesion have come to depend'.26 This is only one of the reasons why the imperialist powers depend on the continued exploitation and oppression of the backward capitalist world. Another is that the export of capital has played a crucial role in delaying the descent Although the rate of profit was declining in the 'sixties, the mass of profits continued to rise. Thus the tendency of the rate of profit to fall was not apparent to individual during the period 1956 to 1976. But the massive increase in production during the 'sixties, which was stimulated by state intervention and the extension of credit, could only delay the full effects of the capitalist crisis. The drastic fall in profitability in the late 'sixties could no longer be offset by a further extension of credit. The full extent of the crisis of capitalism was brought to the surface Italy NR GR NR 91.6 94.5 86.5 89.8 85.2 84.2 85.2 90.6 82.6 93.8 75.2 93.0 64.3 85.9 75.8 58.5 63.7 65.6 65.6 71.1 79.7 56.3 56.3 79.7 68.5 80.5 66.6 82.0 58.5 79.7 50.2 68.8 43.1 70.3 41.5 40.8 32.2 fierce battle over Table 6 illustrates this tendency 1955=100 United Kingdom GR NR 91.9 88.8 91.2 85.2 89.7 81.6 85.7 94.1 100.7 92.3 89.0 77.5 81.6 68.4 85.3 71.9 89.0 76.5 86.8 73.5 77.9 63.8 76.5 62.2 76.5 62.2 59.2 74.3 64.7 49.0 63.2 47.4 63.2 47.4 54.4 38.8 41.2 24.5 33.1 14.8 32.4 14.3

Graph 1 110 100 90 80 70 United States 60 50 40 1969 71 '77 78 1969 73 '75 Est. A Index, 1963-73 trend = 100 *Trend values based on average 1963-73 capital formation growth rates: US 4.2%, Japan 13.4%, West Germany 4.5%, other West Europe 5.6%.

** Less West Germany Since 1973, the tendency of capitalism to stagnate in the epoch of imperialism has become increasingly clear.

Facing a crisis of profitability, the capitalist class cannot becomes a decision of strategic importance for the survival of the individual firm. Despite the availability of moneycapital, the captains of industry have been reluctant to take credit - there are few areas of investment that are profitable. The resulting fall in the level of investment anti-crisis measures taken by the imperialist powers have failed to halt the tendency towards recession.

Attacks launched on the living standards of the Western working class have been insufficient to restore the conditions for capital accumulation. Attempts to reflate the American, West German and Japanese failed. Despite the US government pumping $ 70-80 billion into the economy little restructuring of industry has taken place. The limited nature of the upturn of 1975-78 can he seen in Table 7. During the years 1974-78 there has been a decline in the rate of productivity growth and an increase unemployment. By were predicting a deepening of the recession.

21 UN, World Economic Survey 1977, 1978, Tables 1 and 2.

22 Cited in New African, February 1979, p90.

23 Lenin summarised the five basic features of imperialism in this Investment in the developed world has plunged far below recent trends? 8 Gross fixed capital formation as a percent of trend value* Japan West Germany 77 78 1969 71 '71 '75 '73 73 Est. way: (1) the which 25 16 May 1979. 27 1979 most bourgeois observers 28 Graph Week, 24 July 1978, p70. 9 Western Europe** '75 '77'78 1969 '71 '73 '75 '77'78 Est. Est. concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this "finance capital", of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation international monopolist capitalist associations which share the world among themsclves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed: V I Lenin, 'Imperialism, the highest stage of capitalism', Collected Works (CW) 22, p266. All references are to V I Lenin, CW, Fourth Edition, Moscow, 1972.

24 Organisation for Economic Co-operation and Development, includes representatives of the advanced capitalist countries of Europe, North America, and the Far East.

The importance of the tendency of the rate of profit to fall in the genesis of the capitalist crisis is explored in 'The recession: capitalist offensive and the working class', Revolutionary Communist Papers, No 3, July 1978, pp8-10.

26 Citca in 'West's raw materials under threat, Financial Times, Table 6 taken from "The problem of industrial investment' The OECD Observer, No 97, March 1979, p18. The crisis of profitability in Britain is recognised by the Bank of England Quarterly Bulletin, Vol 19, No 2, June 1979. This report notes: •Pic and post-tax measures of the real rate of return changed little between 1977 and 1978; and, as in the case of the share of profits in net domestic income, they are still very depressed in comparison with the years before 1977', ibid, p183.

1 taken from 'New world economic order', Business

Table 7 UK US Germany France Japan Canada Italy Sweden *On common OECD definition Excluding North Sea oi n.a. not available Tabte 8 United States Japan Germany United Kingdom France Total countries Brazil, Mexico, Singapore and Taiwan.

number of loans. tendency The latest cycle 29

UNEMPLOYMENT*

1973 0.9 2.6 1.3 5.6 3.7 2.5 +Third quarter As a result of the interruption of capital investment i significant proportion of money-capital lay idle. Petrooil revenues deposited in the West by OPEC further increased the available quantity of money-capital. These funds were exported on a large scale.

There was a notable increase of direct investment in backward capitalist countries by the imperialist powers, particularly Japan and West Germany. These two relatively strong economies experienced the crisis of profitability later than their competitors: they only began to export capital in large amounts in the late 'sixties. In 1960 these countries accounted for only 10 per cent of the total foreign direct investment in backward countries - by 1976 this figure had risen to 24 per cent. This is shown in Table 8.

Growth of private direct foreign investment flows to developing countries, 1960 and 197630 1960 $million % of total 667 38 4 65 103 6 15 226 279 16 361 21 100 1741 The spectacular flow of investment has been directed towards countries with an existing manufacturing base and infrastructure, or to energy producing areas. The lion's share of foreign investment went to countries such as However, foreign direct investment only accounts fo around 35 per cent of the flow of capital to the backwar capitalist countries. Since 1974 there has been an increasing Loans, both public and private, have slowed down the towards stagnation. Change 1978 1973 to 1978 6.8 t4.0 5.9 +1.2 3.7 +2.8 5.8 +3.2 2.5 +1.2 8.4 +2.8 +3.7 7.4 +0.1 2.6 +GNP divided by employment - 1976 $million % of total 3119 41 1084 14 765 10 723 10 246 3 1656 22 100 7593 time when more 10 Average annual growth 1964 to 1973 3.27 1.8 4.7 4.5 8.9 2.4 5.4 n.a. Table 9 Direct investment" Export credits Bilateral financial flows Multilateral financial flows Other Total *includes flows to tax havens the increased need of developing acute after 1974 when tendency towards payments since deeper world recession' 35 understanding this process.

PRODUCTIVITY+

Average annual growth 1974 to 1978 0.87 0.1 3.2 3.0 3.4 0.6 1.1 n.a. 1925-75, capital to backward capitalist countries, $billion 5.6 2.8 1.8 25.6 money-capital was available, capitalists in the imperialist interested in borrowing.32 banks began to look for new outlets of loan capital. The surplus of money-capital in Western banks coincided with cover their balance of payments deficits. This need became sharply and raw material prices collapsed.

The increasing demand for loan capital was promptly met by the Western banks. They had a clear interest in lending large sums of money. Demand for domestic loans was stagnant and petrodollar holdings had to be profitably invested. The extension of credit also had a stimulating effect on exports 33 Both public and private loans increased substantially between 1973 and 1978. The Western capital markets alone lent $100 billion to developing countries.34 International loans enabled backward capitalist countries to cover their deficits and stimulated exports from imperialist nations. The extension of credit helped to temper the capitalist collapse. noted: 'Private commercial banks played an important role in recycling the OPEC surplus to developed and developing countries which incurred large deficits in the balance of This recovery, stimulated by the export of capital, reinforced the bond between different parts of the world economy. Lenin's category finance capital is valuable in Average annual decline in growth between periods -2.4‡ -1.7 - 1.5 -1.5 -5.5 -1.8 -4.3 n.a. % of total 35 25 22 100 demand for primary goods fell thereby prevented

Finance capital Table 10 companies38 Company Daimler-Benz Metallgeselischaft Hochtief Philipp Holzmann Deutsche Babcock Preussag Sacher & Berger Orenstein & Koppel Suedzucker DUB Schultheiss Dlag Bergmann Elektrizitaetswerke Nixdorf Nordsee Heidelberger Zemont Eternit Wayss & Freytag Karstadt Kaufhof Andreas-Noris-Zahn Hapag-Lloyd other banks. For Lenin the development of finance capital was one of the distinguishing features of the imperialist epoch. Finance capital cannot be understood in its conventional usage of money or banking capital. Lenin wrote: "The concentration of production; the monopolies arising therefrom; the merging or coalescence of the banks with industry - such is the history of the rise of finance capital and such is the content of that concept'.36 The tendencies outlined by - the increasing concentration and centralisation of capital and the coalescence of banks with industry have been considerably reinforced in the post-war period.

Banks play a more active role in production and are often major shareholders in industry.37 Table 10 shows the extent to which finance capital has developed in West Germany.

Main bank holdings in West Germany's 350 largest Bank shareholding Deutsche Bank Dresdner Bank BHF Bank West LB Dresdner Bant Commerzban BHF Bank Deutsche Bank )resdner Ban Sayernhypo Ban BHF Bank Berliner Bank Bayerische Vereinsbank Deutsche Bank Dresdner Bank Dresdner Bank Allgemeine Bank Dresdner Bank Commerzbank Deutsche Bank Commerzbank Dresdner Bankr Bayerische Vereinsbank Deutsche Bank Dresner Bank ote: The banks participation in the top 350 companies is, in fac ery much larger. It takes the form, however, of participations i holding companies which own the shares. Ownership of the holding companies is split with other interests, although these are often Participation (per cent) 28 over 25 over 10 over 25 50 25.01 25 over 25 over 25 over 25 3.96 1.3 over 25 25 over 25 over 25 19.6 about 37 over 25 over 25 over 25 over 25 over 25 over 25 over 25 be tied to US sources of supply, 39 29 30 2, February 1979, p104. out of circulation: obscure the see 37 Times, 21 and 29 May 1979.

38 39 Max Miles, 11 The growing coalescence of banks and industry has production. In relation to the backward capitalist world the growth of export credits, export insurance and what is called 'foreign aid' are important. The imperialist nation state provides credit for potential buyers of its exports.

Weaker imperialist nations are especially dependent on low interest government credit to encourage export business.

Export credits now form 25 per cent of the capital flow to backward countries. 'Foreign aid' and 'developmental assistance' are euphemisms for low interest loans. The imperialist country lends money, which is then used as payment for the commodities it sells. An American government report described how this system operates: 'United States exports to both Zaire and Zambia will be helped by the considerable increase in US developmental assistance to both countries in 1979. Zaire is stated to receive at least 832 million in bilateral assistance this fiscal year, almost all of which will With the intensification of the crisis the proportion of private bank loans has increased relative to public loans.

The recent United Nations World Economic Survey noted 'While external borrowing has played a major and effective role in ... helping to cushion the economies of many deficit Table 7 taken from Financial Times, 22 February 1979.

Cited in H Hughes, 'Debt and development: the role of foreign capital in economic growth', in World Development, Vol 7, No According to Mandel there was a 12 per cent decline in the volume of credit in real terms taken up by American capitalists between September 1975 and September 1977. See E Mandel, The second slump, New Left Books, 1978, p95.

"The export of capital thus becomes a means of encouraging the export of commodities. ' V I Lenin, op cit, p244 Here it is worth noting that the extension of credit to the backward capitalist areas was paralleled by a similar flow of funds to Eastern Europe and the Soviet Union. These non-capitalist areas were able to raise $50 billion on western capital markets during the years 1973-78. Hughes, op cit, p106.

C Hardy, 'Commercial bank lending to developing countries: supply constraints*, World Development, Vol 7, No 2, February V I Lenin, op cit, p226. For a vulgar finance capital see D Yaffe, 'Imperialism, national oppression and the new petit bourgeoisie', in Revolutionary Communist, No 9, July 1979. In this journal the Revolutionary Communist Group (RCG) attempts to reduce finance capital to banking capital. The flow of capital is explained as a phenomenon rising "British banks have not grown nothing. They both foster and feed off the financial helplessness of the oppressed nations', ibid, p3. The flow of money capital which is an indication of the weakness of British imperialism is depicted as a sign of its strength. After noting the tremendous export of British capital, the RCG asks, 'can anyone now doubt the growing strength of British banking, and hence of British imperialism?', ibid. p2. The aim of this revisionist article is to fundamental antagonism capital in South Africa and to replace it with the populist antifinance rhetoric of Stalinism. For a critique of this standpoint "Revisionism, imperialism and the state', Revolutionary Communist Papers, No 4, February 1979.

For a useful summary of the growing diversity of the activity of banks see 'Survey of world banking', Parts 1 and 2, Financial Table 10 taken from Financial Times, 9 April 1979.

'Sub-Saharan African markets', Overseas Business Reports, OBR-79-06, US Department of Commerce, March 1979, p3.

the growth of state investment in between labour and offer regions receptive

its recent sharp growth has become a cause for concern.

countries, This has been aggravated Ly the rapid increase in the proportion of borrowing from private sources. '40 Since 1974 loans from private US banks to backward capitalist countries have increased by about 30 per cent each year. During the period 1970-75, profit from interaccounted for 95 per cent of the increase in the total earnings of the 13 largest US banks. These banks now derive about half their total earnings from overseas lending41 The same trend can be discerned among French banks. For example, during the last two years, foreign operations accounted for well over 50 per cent of the profits of the Banque de Paris et des Pays Bas.42 But this large-scale expansion in loans has also caused considerable concern to the banks. Their fear that debtors might default has increased since their recent experiences in Zaire, Peru and Turkey. To avoid precipitating a banking crash which would further destabilise the world monetary re-scheduled payments. Most 1978 credits to non-oil producing underdeveloped no more than refinancing operations.43 countries were No wonder that more and more bankers are asking international institutions, such as the IME, to guarantee 'bad Despite the risks, bank loans continue to even to the poorer backward capitalist countries. In the past five years these countries have received some $120 billion from international banks.44 The strengthening of imperialist rivalries has forced banks to continue to extend these loans, since none can afford to lose its share of the profits from overseas operations. As the head of the international department of a major bank put it, 'We are too competitive to forego profits in the interests of the health To many observers the main force behind the accelerating expansion of loans is the internal dynamic of the banking system. In the view of radical economist Ernest Mandel, 'inflation feeds the relative abundance of moneycapital which the banks are able to provide. The scope of banking operations thus expands at an accelerated rate' 46 It is true that an expansion in the volume of moneycapital means more money for the banks to invest, just as it is true that banking capital strives to maximise its share of total surplus-value. However, the rapid expansion of credit in recent years cannot be explained by reference to the nature of the banking system. In the epoch of finance capital banks do not act merely as lenders of money-capital.

Their fortunes are closely bound up in financing expansion in industries within which they have invested.

At a time of growing imperialist rivalry credit becomes an important means of concentrating the social power of one national capital against its competitors. In particular, credit is important in financing exports. Recently the Financial Times noted the role of export finance in opening up the Chinese market: 'For exporters everywhere the main event over the past year has been the opening up of a huge new markct scramble to sign the first credit lines with China illustrated all too clearly how vital export finance is to the exporter trying to win new At the same time it has confirmed how much internationăl competition still exists on credit-terms despite the efforts to eliminate this self-defeating competition. 47 "self-defeating competition' to provide credit at low interest rates is a process which capital cannot control. On the contrary this battle is a necessary response to the crisis. The survival of one capitalist depends on the destruction of others. Today the intensity of the competitive struggle has forced even American capital to advance credit at low interest rates to boost its exports. Until recently American refused to offer export credit on the same competitors. Indeed, it sharply attractive terms as its criticised its fellow imperialists for virtually all this has changed. Having tailed to obtain a gentleman's agreement governing export credit Export-Import Bank, said in May 1979: take off the gloves, and we have done so 48 During the past six months the U S A has begun to offer export credit below its usual 7.25-8.25 per cent scale of interest rates The main effect of this expansion of finance capital has been to deepen the involvement of the imperialist powers in the economies of the backward capitalist count- This involvement is fundamental to the continued expansion of capital. At a time when a further fall in exports would have disastrous consequences, credits to the backward capitalist countries serve as indirect subsidies the exporters of the imperialist powers.49 rates fall the backward capitalist countries are vital outlets for profitable investment (see figure 1 for statistics on Rates of return on US investment abroad, 197750 Figure 1 0 % 10 20 30 40 50 T Petroleum 127.5 Finance & insurance Developed economies Manufacturing Developing countries of which - Asia All industries Many investments in backward capitalist countries are highly profitable. In many cases repatriated earnings exceed the export of new capital. Recent figures for Asia are given in figure 2. Figure 2 Imperialist domination of Asia51 direct investment inflow...

...and income payments 1.5 1.0 0.5 $bn 0.5 1.0 T T 1967 1971 1972 1973 1974 1975 na

Table 11 Developing countries in general and Africa: balance of payments summary53 * The balance of services and private transfers is computed as the difference between the trade balance and the current account d Net capital inflow is computed residually as the difference between the balance financed by transaction in reserve assets and the current account balance. It includes government transfers, reported capital movement and errors and omissions Africa's growing debt Country group Developing countries 1974 1975 1976 1977 Africa 1974 1975 1976 1977 a Data for 1977 are pretiminary.

balance. deficit on its trade and services account.

international lending by

THE IMPACT OF THE CRISIS ON AFRICA

he flow of loan capital to the backward capitalis ountries has been the major factor in the maintenanc I their financial solvency. In 1978 the flow was sufficier › cover the $25 billion balance of payments deficit of th Balance of 55.4 12.4 36.9 35.8 -1.9 -7.4 -5.7 4.2 b Exports, f.o.b. minus imparts, c.i.f.

world's poorer countries and, in addition, allowed them to their hard currency reserves by $13 billion.52 Even Africa, the poorest among the backward capitalist regions, managed to obtain sufficient funds to cover the However, as the economic position of the backward capitalist countries continues to deteriorate, their ability these vast debts becomes increasingly questionable. The recent rise in oil prices will add another $5 billion to the annual fuel bill of the non-oil producing developing countries. As The Economist recently noted: 'The last rise in oil prices has increased the risk of losses in existing borrowers.... Poor countries have been running to stand still. Their export earnings have roughly trebled over five years, but so has their external debt. While rates have pushed up the cost of servicing that debt. '54 The debt problem of these countries demands that an of the surplus-value produced there be paid out as interest. The IMF estimates that in 1977 debt service payments were as much as 11.5 per cent of the total revenue of the non-oil The debt servicing problem of the African nations is even more severe. In Ghana, for example, it is anticipated that 42 per cent of 1979 export earnings will either be repatriated as dividends or used to service the national Zaire, the most extreme African case, has been 1974-77 $billion Balance of ervices ant traprivate - 16.3 -15.9 -21.7 -2.0 -0.6 -1.2 undermining the credit worthiness of the past interest rising producing developing 13 Balance on current account 37.9 -3.5 15.2 ... -3.9 -8.0 -6.9 .•. C Hardy, op cit, p190 42 43 45 46 E Mandel, op cit, p69. 47 other's credit terms'. 48 49 from industrialised countries 50 1979, p19. 51 Ibid. 52 53 54 55 56 57 IMF, Annual Report 1978, p12.

forced to default on its debt repayments on a number of occasions. By 1977 the financial problems of 20 of the African nations had become so acute that the IMF forced them to introduce harsh austerity measures.57 The indebtedness of the African nations should not be seen as the result of a purely financial transaction reinforcing their inferior position in the world economy. The export of capital allows imperialism to influence the direction of the African economies and exercise an important measure of control over their wealth. While imperialism Net capital flow d -2.9 11.5 4.1 ... 7.3 41 CHardyid Beonomic Survey 1977, pp 1-3.

Se Sion on act, sintria Times Tra Development Vol 7, No 2, February 1979, p93.

44 See 'Home truths from Basle", The Economist, 16 June 1979, See 'Export finance, the nations compete', Financial Times, 29 May 1979. The article continued: 'So intense is international credit competition that - with the exception until now of the US - exporters whatever their country of origin (despite their claims to the contrary) have generally been able to match each 'US get tough on export credits', Financial Times, 26 June 1979.

An estimated 28 per cent of total manufactured goods exports World Bank, Annual Report 1978, p15.

"Survey of foreign investment in Asia, The Economist, 23 June See The Economist, 16 June 1979, p87.

UN, World Economic Survey 1977, op cit, pp 1-47, 1-48.

The Economist, 16 June 1979, p83.

See Table S in A B Seira, 'The world economy, external debt and prospects for development financing', World Development, Vol 7, No 2, February 1979, p130 'Report on Ghana', New African, June 1979, p85.

Change reserves 35.0 8.0 19.3 21.5 0.3 -0.3 0.4 0.8 go to developed countries. See

Table 12 Region Developing countries Real rate of growth: Total GNP Agricuitural production Manufacturing production Population GNP per capita Gross investment Share in GNP: Gross investment Gross national saving Africa South of the Sahara Real rate of growth: Total GNP Agricultura roductior Manufacturing production Population GNP per capita Gross investment Share in GNP: Gross investment Gross national saving extracts large profits from the export of capital, very little of these are used to develop the African economies: a considerable proportion is repatriated, while most of the the state on the import of foreign technology. Public sector investment, based largely borrowed capital, accounted for a large share of African industrial investment in the 'seventies. However, most of this investment was in the infrastructure and the raw materials sector and thus did little to stimulate manufacof capital to Africa encouraged imports but not capitalist development. Whereas the export of capital to the more developed backward capitalist countries in Latin America and Asia led to a considerable growth in the forces of production, African industry has stagnated.

Light industry has been the only manufacturing sector to experience growth. According to the United Nations 'Africa's growing output of food, beverages and tobacco (11.6 per cent) was the main springboard for the growth recorded by light manufacturing' 58 The output of heavy industry in Africa has in fact declined - in 1977 production of basic metals, machinery and equipment was cut back; the chemical industry was stagnant.

Selected economic indicators for developing and industrialised countries - regional summary 59 61.65 66-73 74 6.6 5.9 5.5 3.0 2.7 3.8 9.5 6.9 8.8 2.4 2.4 2.4 3.0 3.4 4.1 8.2 17.0 8.0 23.9 19.9 21.4 26.1 18.3 20.4 8.6 3.8 4.5 3.0 0.9 6.9 9.4 8.5 8.6 2.5 2.6 2.7 5.7 1.3 1.9 6.3 6.1 18.9 15.9 17.1 19.0 11.1 12.6 22.3 Until 1974 manufacturing output had been growing at around 9 per cent each year. In 1975, however, manufacturing production declined; the following year it increased by a mere 2.9 per cent. Gross National Product (GNP) per capita, on the other hand, had rarely grown at more 76 '77(P) 75 6.4 5.0 5.4 5.2 3.2 1.5 8.4 2.5 - 2.3 2.4 2.4 2.5 3.1 3.9 3.4 5.5 - 24.6 24.6 23.7 25.5 - 3.0 5.2 3.0 1.0 2.0 3.2 -0.1 2.9 - 2.7 2.7 2.7 2.4 0.3 0.2 10.5 12.9 - - 23.0 24.0 17.4 22.8 ill! 14 grew scarcely at raw materials. Foreign investment in Africa importance for African economy. Although only small-scale sector. The plunder of raw materials 'Africa's and agricultural supplies A frica imports.' (Cyrus Vance) 65 Republic, Sudan), manganese (Gabon, inum and vanadium. tion by than 2 per cent per year; in 1975 and again in 1977 it even worse. output and productivity are both declining This has serious implications for the African economy a whole because revenue from cash crops accounts for 60 per cent of Africa's total income, and much of African industry is engaged in the processing of locally produced Because it receives a relatively small proportion of total foreign investment, Africa seems at first sight to be of little imperialism. Although the quantity of direct investment in Africa has increased, its share of the capital exported to developing regions has decreased from 19 per cent in 1967 to 13 per cent in 1976.61 With the exception of oil-rich Nigeria, black Africa has not experienced the rapid accumulation of capital characteristic of Brazil, Mexico, South Korea and the Philippines.

However, foreign investment has been crucial for the exports go to manufacturing industry this has been sufficient to ensure that the imperialist powers retain the leading position in industry 62 This is not simply due to the and backward character industry. Foreign investment is concentrated in the most dynamic and profitable sectors; its control of the production process is guaranteed by the provision of share capital by the African states. For example, in the Ivory Coast, French imperialism owns 53 per cent of capital in commercial sector but only 30 per cent in the industrial Nevertheless, this is adequate for French firms to control 45 per cent of business turnover and to secure 81 per cent of all profits 63 The profitability of French capital is underwritten by huge state investments. During the years 1976-78, 80 per cent of all investment in the Ivory Coast was carried out by public corporations 64 potential is tied to our wealth already provides of our own imports of such commodities as copper, cobalt, and manganese for our industrics, and cocoa and coffee for our homes.

38 per cent of our Africa's rich deposits of strategic minerals are crucial for the survival of imperialism. The imperialist powers depend on Africa for obtaining minerals such as chrome (Malagasy cobalt (Zambia, Ghana, Morocco, columbite (Mozambique, Nigeria, Rwanda, Zaire), tungsten (Rwanda, Zaire), and vanadium (Namibia). The importance of South Africa alone can be gauged by the fact that this country has rich deposits of chromium, manganese, plat- Recently competition between the imperialist powers for access to these vital raw materials has intensified. In 33 African countries international consortia are searching for fresh deposits of oil 66 The huge investments required for such exploration demand the participation of industrial and banking capital from a number of countries. A holding company, usually with majority or near majority participathe African states, is established to undertake The condition of agricuture is • as profitable sectors of the 20 per cent of capital of most African the Africa's mineral owIl... a substantial portion crude petroleum Zaire, Morocco), Zaire), tantalum/

the venture. The imperialist countries are thus able to obtain a large proportion of the capital they require from local sources. example, the development of Niger's mine was initiated by Japan's uranium reserves at Akoula (a combine of over 30 Japanese firms), the government of Niger and the French Atomic Energy Commission.

wise, a consortium of Japanese, German and French capital is hunting for uranium deposits.

The imperialist powers have been able to secure control Although the nationalisation of the copper participation. 1969 gave the Zambian government a 51 per cent financial holding, Anglo American was able to retain control over production through a management contract which left technology and marketing firmly its hands. Indeed, nationalisation relieved Anglo-American burden of raising its own working continues to be a highly profitable venture. Increasingly, mining companies are looking to the African provide substantial investments before they own capital. In many cases the African state must turn to Western capital markets to raise the necessary finance Once this is secured, the Western companies set up joint ventures with a public corporation. A recent example involved a syndicated loan to the Zambian government for the purchase of mining equipment. This was arranged by five of the world's largest banks: Standard Chartered, Barclays International and Grindlays International67 The purpose of capital exports, whether in the form of banking capital or direct investment, is to ensure greater control over industry and raw materials for the imperialsector investments subsidise foreign capital and leave the black African countries deeper in

IMPERIALIST RIVALRY IN AFRICA

The world crisis of capitalism has undermined the equilibthe imperialist powers which, Second World War, has existed under the hegemony of the USA. The decline of US imperialism has unleashed a struggle for a new redivision of the world. Recently the imperialist powers have redoubled their efforts to secure new spheres of influence in Africa. Imperialist expansion does not simply take the form of foreign direct investment. The indigenous state raises capital on the international money markets as a prelude to its collaboration with foreign capitalists. The co-operation of the local bourgeoisie in the exploitation of the working class reduces the need for imperialism to resort to political coercion. African capitalism's dependence on the export of raw materials ensures that the subordination of the local bourgeoisie to imperialism takes place largely through the movement of capital on the world market.

The African bourgeoisie cannot its own even use currency to purchase imports. It is forced to purchase the hard currencies of the imperialist powers over whose exchange rates it has no control. One observer noted that 'African economies have been known to incur foreign exchange losses running into millions in just one day's fluctuations on the international currency markets, with no recourse to compensation of any sort'68 In the past imperialism has been able to enforce its policies through international agencies like the IMF. The terms of loans granted by such bodies require African countries not only to repay 15 their debts but to carry out policies prescribed by foreign bankers. However, as imperialist rivalries intensify this form of pressure is not always sufficient to safeguard imperialist interests. The resuscitation of colonial methods of political control is increasingly required The tendency towards the re-imposition of direct political control has been particularly evident in the imper ialist conflict over raw materials. Although mining companies form international consortia to spread the risk often involved in their investments, imperialist powers are nevertheless becoming extremely concerned about losing their sources of raw materials to competitors. This explains the trend towards military intervention in Africa. The return to gun-boat diplomacy was made clear recently when former American Energy Secretary Schlesinger warned that the USA would be prepared to intervene militarily if its Middle East oil supplies were disrupted 69 Markets for imperialist exports As inter-imperialist rivalries intensify, even a relatively small export market such as Africa becomes important. In fact, Africa has increased its role as an export market during the last five years of recession through staie borrowing on the world money markets. The value of exports of commodities to black Africa increased from $38.3 billion in 1975 to $49.9 billion in 1977.70 In the struggle for the African export market Britain, one of the most rapidly declining imperialist powers, has lost out to its more dynamic competitors. Although traditionally Britain was the main supplier of exports to Africa, by 1972 its market share had dropped to 14 per cent. Since then Britain has lost further ground to Japan, France and West Germany. By 1977 it supplied barely 10 per cent of the market, in third place behind France and West Germany?

In recent years Japanese exports to Africa have average risen at the high annual rate of eight per cent. In 58 UN, World Economic Survey 1977, on cit.

59 World Bank, Annual Report 1978, pl18.

60 Ibid. 61 'A survey of forcign investment in Asia', The liconomist, 23 June 1979, p6 62 Foreign ownership of industry is more important in Africa than in any other continent. See, for example, L Rood, 'Foreign investment in African development', Journal of African Studies, Vol 5, No 1, 1978, p20. 63 estimates werc made by the Banque Ivorienne des Donnees Financieres, sce African Business, May 1979, p27.

64 Economist Intelligence Unit (HU), Quarterly economic review of Ivory Coast, Togo, Benin, Niger, Upper Volta, second quarter 1979, pp7-8. This massive state spending was financed through borrowing on the Western capital markets. In January this year it was reported that the Ivory Coast was saddied with a debt of over $4000 million, Financial Times, 23 January 1979 65 Quoted in T Shaw and M Grieve, 'The political economy of resources: Africa's future in the global environment, in The Journal of Modern African Studies, Vol 16, No 1, 1978, no.

66 Marches Tropicaux, 6 October 1978, pp2640-41. This survey shows that virtually every oil company is involved in this search. 67 Standard Chartered Review, January 1979, p7.

68 "The dollar crisis continues', Africa, June 1979, p95.

69 The Economist, 3 March 1979 UN. World Economic Survey 1977, op cit, table 8, p45.

70 71 'Changing trends in Britain's trade, Standard Chartered Revien: op cit, pp5-6.

1977 8.3 per cent of Japanese exports went to Africa, representing a trade surplus of $4.5 billion? Much of this Japan's success in breaking into the African is due to market for consumer durables and machinery. Japan's share of the automobile market, for instance, rose trom three to "seventies?3 The growth of eight per cent during the US exports to Africa has been less spectacular. In 1977 commodities worth $2.2 billion were exported to black Africa and $1.5 billion to South Africa?4 The most dynamic imperialist exporter to Africa has been West Germany. It has established a dominant position in South Africa as well as showing every sign of increasing its share of exports to black Africa.

exports have been increasing While West German dramatically, the leading imperialist exporter to Africa is France. It owes this position to the strong links it has former colonies. Despite formal maintained with its independence in the French-speaking African nations, France has obtained highly advantageous trading arrangements. Many former French colonies are members of the franc zone; their currencies are readily convertible into French money. As a result the two-way trade between and Africa had reached $10 billion by 197875 This explains why France is the most interventionist of all the imperialist powers in Africa. 13 000 French troops are spread across the continent to defend its imperialist South Africa: the new imperialist state Imperialist domination in black Africa can only be fully understood by examining the role which South Africa plays for world capitalism. Apartheid, the brutal form of capitalist rule in South Africa, has created a haven for profitable investment. South Africa's importance originally derived from its immense natural wealth. But it is not merely a source of raw materials or a sphere for investment. Massive capital inflows in the post-war period created the conditions for the development of a modern industrial sector: South Africa has become an imperialist nation in its own right. The ruthless oppression of the African population gives South Africa the appearance of an oppressed nation.

These oppressive featuresshould not obscure the fundamental character of South African capitalism. South Africa itself plays an important role in enforcing imperialist domination in southern and central Africa. For this reason imperialism will take every step necessary to guarantee security in this important region. Despite its decline as an imperialist power, Britain continues to increase its investments in South Africa. It owns nearly 60 per cent of all foreign investment - assets worth an estimated £5 billion. Net earnings of British companies in South Africa rose by 202 per cent between 1972 and 197676 This compares with increased earnings of 170 per cent in Western Europe and 129 per cent in North America. Other imperialist powers are also increasing their South African investments. By 1977 West German investment totalled 609 million deutschmarks (DM),77 while US amounted to $1.7 billion. A recent survey shows that US corporations plan to increase their investments in South Africa by about 20 per cent in 197978 Foreign direct investments are only a small portion of the capital exported to South Africa. Bank loans and portfolio investments have also flooded in. As in other parts of Africa, British banks play a key role in providing funds for local industry. In June 1978 net UK bank loans to South Africa amounted to £1.2 billion?° US banks have also stepped up their loans - in 1978 US private banks loaned more than $2.5 billion to South Africa 80 The IMF also consistently lends capital to the South African state. In 1976-77 it lent $450 million in recognition of its military role in Angola. Many of these loans are used by state corporations to import technology and raw materials. In addition, West German loans in the form of guarantees for commodity exports to South Africa rose almost fivefold between June 1976 and May 1978.81 Since 1976 West German bank loans to the South African state-run Strategic Oil Fund have amounted to DM221 million 82 These loans demonstrate world imperialism's support for South Africa's drive to become self-sufficient in oil.

Over the past decade the leading role of British capitalism in South Africa has been undermined by the intensification of imperialist rivalries. In particular, West German capital exports have risen faster than those of Britain, allowing West Germany to increase its commodity exports at a faster rate. West Germany has become South Africa's biggest supplier of imports and has been able to capture a of Britain's market for industrial plant and machinery 83 The dominant position of West Germany as a supplier of manufactured goods owes much to a DMS billion investment made by 400 West German firms in South Africa.84 The declining position of British imperialism can also be seen in the tendering for contracts to supply the extension of the Sasol oil-from-coal projects. This scheme, the largest industrial construction project ever undertaken in South Africa, is designed to provide a buffer against any future oil sanctions. The major contracts were won by French and West German and, to a lesser extent, by Japanese capital.

The principal management contract was won by Fluor British participation in this Corporation of the sought-after project is restricted to the provision of fire heaters and pumps 85 South Africa has become an active imperialist power on the African continent. Its growing economic stake in black Africa recently led it to intervene militarily in Angola.

South Africa plays a critical role in the internal economic life of Namibia, Botswana, Lesotho, Swaziland and Zimbabwe. In particular Lesotho serves South Africa as a base for penetrating other African markets and the EEC. As the South African Financial Mail noted: 'Lesotho is holding out some juicy carrots to investors...

[including) preferential access to many lucrative foreign markets.

Thanks to trade pacts, such as the Lome Convention, Lesotho exports are entitled to lower customs duties than those from South The growing strength of South African capitalism is demonstrated in Malawi where it has overtaken Britain as the major supplier of imported goods.87 In 1978 South African exports to 25 black African countries were estimated at 8521 million 88 Despite the growing challenge of South Africa to the interests of other imperialist powers in black Africa, its role as a supplier of raw materials and as a sphere for extremely profitable investment gives it great importance for world imperialism. The imperialist powers have no qualms about supporting the apartheid regime. The hypocritical resolutions concerning human rights, statesmen, give way before the quest for profits. As Cecil Minister of State for Trade, told the British House of Commons: 'Our bilateral trade with South Africa is not something that is peripheral to our economy, it is of central importance 89 The USA is likewise concerned to apartheid regime. One American observer of the consequences of a successful struggle against apartheid, not only for the world economy, but also for the 'fabric of race relations' in the USA 16

'But one American interest overrides all others - the avoidance of a violent racial confrontation confrontation would not only polarize the African continent and dangerously exacerbate our relations with the Soviet Union. It could also put a major strain on the delicate fabric of race relations within the US.'90 Imperialism looks upon South Africa as an embarrassing but very profitable sphere for investment and an essential source of raw materials. It also recognises South Africa as a useful guarantor of capital relations throughout Southern Africa. The imperialist powers would prefer South Africa to adopt a more acceptable public image but not at the expense of the highly profitable exploitation of the South African working class. Even these minor forgotten in the face of the threat posed by the anti-imperialist movement.

How the imperialists line up undermining of French and British imperialism's dominance in Africa has been particularly noticeable in the banking sector. American banks have bought into two of the three largest British banks that once dominated Englishspeaking Africa; Citicorp now owns 49 per cent of National Grindlays, and Chase Manhattan has purchased 15 per cent of the shares of the Standard Bank. French banks have also seen their influence decline. Forty per cent of the shares of the Banque de l'Afrique Occidentale, one of the two big banks in West Africa during the colonial era, are now owned by Citicorp 91 Japanese imperialism has not been slow to take advantage of the favourable conditions in Africa. While its investments are still relatively small they tripled between 1974 and 1976. At $501 million they represent 3.1 per cent of its worldwide investments.92 One of Japan's primary concerns has been to secure a steady supply of raw materials and minerals. This has been achieved both through direct investment and bank loans. A recently concluded contract means that in return for a $50 million long-term loan to the Zambian copper industry Mitsui and Mitsubishi are able to buy around 120 000 tons of copper a year.93 As already indicated, West German involvement in Africa, both in terms of the export of commodities and of capital, has increased steadily throughout the 'seventies.

One of the most important recent developments has been the establishment of a new division of labour between West Germany and South Africa. West Germany provides sophisticated technology for South Africa - notably in the field of uranium enrichment - and in exchange receives essential raw materials. West Germany has also made major inroads into its competitors" markets.

France, and to a greater extent Britain, have both lost ground to the other imperialist powers since the onset of the crisis. Nevertheless, Africa continues to be crucial for these two nations. Britain remains South Africa's primary export market, taking a quarter of its exports. Massive investments in South Africa guarantee a continuous supply of strategic minerals. The table below illustrates the importance of black Africa and South Africa for many leading British companies. (See Table 13) As for France, its interests have been challenged particularly by West Germany. In Senegal, French holdings have dropped from 85 per cent of foreign investment in 1959 to around 55 per cent today 94 However, French imperialism remains extremely dependent on Africa and has fought hard to defend its privileged position. Recently has begun to expand its extremely profitable investments in black Africa. An indication of the profit- 17 ability of such ventures can be gained from the fact that on the Ivory Coast French companies retrieve the full value of their investments in as little as five years.95 The relative importance of Africa to France's competitive position accounts for its increasingly interventionist approach. During the 'seventies France has emerged as the gendarme of imperialism in Africa. In the past three years French troops have fought in Chad, Mauritania and Zaire France's military presence is not restricted to the 13 000 troops stationed in five African bases; it also has 2000 military instructors throughout the continent, and a special intervention force stationed in south west France.96 At a conference of the 22 French-speaking African nations in Rwanda President Giscard d'Estaing indicated the direction of French involvement with his proposal for new 'collective security' arrangements?7 While France is not the only imperialist power with troops in Africa, it is more interventionist that its rivals. Its aggressive raid into Zaire, at the expense of Belgian capital, shows just how dependent France is on the outcome of the struggle for France retains considerable influence over its former colonies and controls a number of them through puppet regimes. The most glaring manifestation of this occurs in the Central African Empire (CAE). The brutal Bokassa regime is maintained through direct French assistance.

France has encouraged Bokassa to run the CAE as his personal fiefdom, providing finance for his grotesque and lavish coronation ceremony. Although Emperor Bokassa has 72 Japan External Trade Organization, White paper on international trade, Japan, 1978, p221.

"Japan's growing African interest, New African 73 S. Plummer, Development, August 1977, p851.

74 "A sharper focus for US policy in Africa', Fortune, 14 August 1978, p134 75 Business Week, 26 June 1978, p55.

76 'British business at stake in Africa, Investors Chronicle, 3 November 1978, p348 'Le commerce germano-africain en 1977', Marches Tropicaux, 77 30 June 1978, p1790. 78 African Business, February 1979, p16.

79 Investors Chronicle, op cit, p349.

'Vorster banks on continuing dollar support from Carter', New 80 African, May 1978, p143 81 'Oiling apartheid", New African, June 1978, p88.

82 Ibid. 83 "Trade with Germany: leaders of the pack', Financial Mail, Johannesburg, 2 March 1979, p677.

84 Der Spiegel, No 9, 1979 85 'French, Germans in Sasol deals, Financial Times, 10 July 1979. 86 Investments in Lesotho, South Africans come hither', Financial Mail, Johannesburg, 4 May 1979.

87 African Research Bulletin, Economic, financial and technical series, Vol 16, No 2, 31 March 1979, p5017.

88 International Herald Tribune, 2 April 1979.

89 Financial Times, 26 May 1979.

90 Fortune, op cit, p136. 91 A Seidman, Journal of Southern African Affairs, Vol 2, No 4, October 1977, p407. 92 D Morris, 'Economy recovers and investment starts to flow', New African Development, August 1979, p852 93 S Plummer, op cit. 94 Business Week, 26 June 1978, p55.

95 Ibid. 96 | Hollick, 'French intervention in Africa in 1978', The World 97 Today, February 1979. Le Monde, 20-21 May 1979.

98 See Alan Harding's article in this issue of Revolutionary Communist Papers.

Table 13 The British stake in Africa 99 1 total profit Lonrho 96 Eastern Produce 89 Mitchell Cotts 88 Osborn (Samuel) 88 Paterson Zochonis 71 Marshall's Universal 69 67 Finlay (James) Low & Bonar 51 Blackwood Hodge 45 Stocktake Hidgs 44 Warren Plantns 44 Berec Group 43 39 Bridon British Commonwealth Shipping 37 Assd. Brit Foods 36 Haden Carrier 31 Bestobell 29 Hall Engineering 26 Delta Metal 24 24 Coates Bros. Brit. Elec. Trac. 22 Reckitt & Colman 18 17 Blue Circle Inds. 16 BOC International 16 Chloride Smith & Nephew 16 Chubb 14 the CAE's imports the CAE, which differences in a gentlemanly Companies earning a large part of total profit in Africa % of Amount Remarks Em 3.47 Kenya, Malawi, Zambia.

not consolidated. 5.86 Safmarine, etc. 28.0 Premier Milling, etc.) 0.44 Nigeria, S. Africa 1.6 1.16 South Africa 8.63 S. Africa, Kenya 2.27 15.0 S. Africa, Zambia 10.4 10.3 16.7 S. Africa, etc. 4.72 S. Africa, etc. 1.90 S. Africa "ruled' the CAE since December 1965 he has drafted no financial or economic policy in that period 100 The IMF eased to report on the CAE's foreign exchange reserves early in 1978 and it is not clear whether they still exist.10.

The administration is run on French subsidies. It comes as no surprise therefore that France supplies 55 per cent of and receives 64 per exports.102 But more ruthless measures are often required to maintain social stability. The rioting in Bangui, capital of was sparked off by the massacre of hundreds of school children who refused to purchase school uniforms from Bokassa's shop, was only quelled by the intervention of 300 Zairean troops at the behest of France.

France's colonial adventures are only the most bloody expression of imperialist domination in Africa. Whether it is the IMF running the Ministry of Finance in Zaire or Britain running the Kenyan intelligence service, imperialism retains vast power over black Africa. To date imperialist rivalries have taken the relatively mild and indirect forms of supporting and arming different sides in the Nigerian civil war, or of competing over markets, raw materials and spheres of influence. The imperialist powers still try to resolve their imperialist powers will be minimised so long as they face a common enemy - the anti-imperialist movement in Africa.

This common threat to imperialist interests in South E30.6m East and Central; €20.4 West; £15.1 Southern "Southern Africa'" £9.4m; "Eastern & Central Africa" Kenya, Nigeria, Zambia, S. Africa, Ghana, Nigeria, etc 1.15 British Rhodesian Steel: results Kenya £4.73m; Nigeria £0.09m After tax; equity interest in "South Africa" (52% hldg in "South and Central Africa" S. Africa, E. Africa, Zambia S. Africa, Kenya, Rhodesia South, West, East Africa 3.28 Africa & Middle East: S. Africa manner. Rivalries between 2 Lonrho Ascd. British Foods BAT Industries Rio Tinto Zinc BOC International Brit. Elec. Traction Mitchell Cotts Blackwood Hodge Berec Group 'aterson Zochon leckitt & Colma 3 Cohen (A) Metal Box Williamson Tea Amal. Power Engng Fenner (J.H.) Ascd Engineering Babcock & Wilcox Anderson Strathclyde

BTR

throughout Africa. 18 Companies earning big money in Africa Ament Ltaf Remarks profit 66.1 96 59.0 11 36 28.0 21.0 4 18.8 16.7 16 15.0 22 88 45 43 10.5 71 10.4 18 Companies ranked by turnover in Africa % of Amount Remarks total of turnturn- over in over Africa Em 41 18.1 18 142.8 Kenya, Tanzania 22 5.94 S. Africa 19 10.4 " 16 11.6 13 36.6 12 80.0 12 5.53 £81.1m 10% Africa Africa, Zimbabwe and Namibia is the main consideration behind imperialist strategy in Africa.

powers should not be allowed to obscure either the intensification of imperialist rivalries or the re-emergence of a tendency towards direct intervention. If imperialism has its way the new redivision of Africa is about to begin.

The crisis and class struggle in Africa The end of the colonial era in the early 'sixties did not end the imperialist domination of Africa. The distortions imposed on the African economies and the balkanisation of the continent during the colonial period mean that African capitalism has a very restricted basis for accumulation. As a result the African bourgeoisie is very weak and vulnerable to external pressure. It can only maintain its position through compromising with its ex-colonial masters and, ultimately, in uniting with imperialism against the African masses. This is why vicious anti-working class regimes prevail For its part imperialism has encouraged such regimes and has taken a leading role in crushing progressive tendencies See Table 1 For Anglo/Dutch group See Table 1 Various S. Africa See Table 1 » "1 " ... S. Africa, Rhodesia S. Africa, Nigeria, Kenya, etc.

Shareholders' funds: total and in agreement between the Western

Even the more independent-minded African regimes have been attacked, and sometimes overimperialism. Attempts were made to destroy regime in Guinea, while Nkrumah in Ghana and Lumumba in Zaire were both ousted with the aid of imperialism. Throughout Africa trade union rights are curbed and all forms of union opposition face the combined force of imperialism and its local allies.

The African bourgeoisie can only play a reactionary role. Its ability to rule rests on its control of state revenues and its access to state investments, contracts and resources. The weakness of African capitalism necessitates close ties between the local bourgeoisie and the state. This is confirmed by the prominent role of public corporations as opposed to private capitalist enterprises. The survival of the local bourgeoisie is based on wealth obtained through the state, commerce and land; with the exception OPEC-member Nigeria, there is no African capitalist class capable of playing an active role in production.

The African bourgeoisie has attempted to legitimise its class rule under the banner of 'African socialism'. This vague ideology, which is used as a cover to justify a mixed economy, is often advanced with populist, or even antiimperialist rhetoric. The propagation of some form of distinct nationalist strategy has always been important for the masses behind bourgeois rule. This mass was particularly necessary during the phase of 'decolonisation'. In this period the nationalist leaders used mass pressure as a lever to gain important concessions from their retiring colonial masters. Once independence had been achieved the bourgeoisie always sought to crush this movement which posed mass of a threat than more imperialism. Thus the anti-colonial Mau Mau revolt was used by the Kenyan nationalist leaders to win important concessions from the British administration. Once the British had left, one of the first measures taken by the Kenyatta regime was to crush the mass land seizure movement and jail leading freedom fighters.

The road to 'African socialism' has always meant defeats for African workers and peasants. Even when the bourgeoisie has tried to oppose imperialism it has been forced to abandon its objective because of its weakness as a class. Quite simply, as long as capitalist relations prevail Africa will be subject to external pressure. A good example is provided by the Sikou Toure regime in Guinea which from its inception came into fierce conflict with French imperialism. Isolated by imperialism, Guinea adopted a system and sought support from the Soviet Union. However, it could not survive as a mixed economy.

During the past year Guinea has asked French imperialism to return and has taken the appropriate economic liberalisation measures. 103 Not surprisingly relations Soviet Union have deteriorated, with Guinea denying access for military purposes. The same trends can be seen in Angola and Mozambique.

After a heroic against imperialism the newly installed regimes have sought to come to terms with world capitalism. The first measure necessitated by this compro mise was the destruction of working class organisation and of progressive sections liberation movement. Unable to overcome its subservience to the world economy, Angola has gone out of its way to capital has a role to play' 104 The deterioration of the economy has forced the ruling class in Mozambique to seek closer ties with South Africa. The Financial Times noted this shift in policy with satisfaction: illustrates Mozambique's plight than President Samora Machel's willingness to bury his political pride by seeking closer commercial links with $105 South Africa. 19 The weakness of the African working class, due to its small social weight, has allowed the interests of imperialism to prevail throughout the continent. Because of the slow development of capitalist production, direct producers expelled from the land did not always become wage labourers. The landless masses formed a pool of migrant workers and a reserve army of labour. However, during the past fifteen years the working class has become a larger and more coherent social force. In conjunction with migrant workers, agricultural labourers and the unemployed, the proletariat is a growing menace to imperialism.

The working class in South Africa, like that in other parts of Africa, is hindered by the limited development of the proletarian movement. Whereas in the oppressor nations the central obstacle to the struggle for communism is the strength of reformism in the labour movement, in Africa the most immediate problem is to win the petit-bourgeois dominated mass movement to working class politics.

working class is the only force that can wage a consistent struggle against imperialism. African revolutionaries must ensure that the proletariat is organised as a class - not as radical appendage to the nationalist movement. In drawing a clear class demarcation it will be possible to mobilise the masses around proletarian politics.

For too long the European labour movement has allowed imperialism to plunder and oppress Africa. Solidarity with the African people has come to mean little more than empty gestures of support. The role of the left in Britain has been particularly scandalous in this respect. Solidarity with the national liberation struggle is virtually non-existent.

Boycotts of South African oranges and Barclay's Bank, accompanied by liberal moralising, are the bread and butter of the British anti-apartheid movement. Genuine solidarity with the African people requires other methods; it requires a fight against British imperialism. It means fighting imper ialism at home in order to cripple the capacity of British imperialism to carry out its oppression of Africa.

Real solidarity with the African people will not be won through classless sermons about the excesses of apartheid.

Revolutionaries must win the workers' movement to an all-out opposition to imperialist expansion.

argue that the defeat of imperialism in Africa will undermine the class enemy of the proletariat in Britain. This task of with the African people is an urgent one.

hour is fast approaching. The new battle for Africa is about Frank Richards 99 'British business at stake in Africa', Investors Chronicle, op cit, 100 Le Monde, 24 January 1979.

101 EIU, Quarterly Economic Review of Gabon, Congo, Cameroon, CAE, Chad, second quarter 1979, p17.

102 Ibid, first quarter 1979, p.20.

103 EIU, Quarterly Economic Review of Senegal, Mali, Mauritania, Guinea, second quarter 1979, pp 28-32.

104 EIU, Quarterly Economic Review of Angola, Guinea Bissau Cape Verde, Sao Tome and Principe, annual supplement 1979, 105 Financial Times. 2 Mav 1979.