Why are Africans still averse to foreign investment?

By Joël Té-Léssia Assoko
Posted on Monday, 24 January 2022 13:57

Visit to the Dakar TER station construction site on 2 February 2018. © Presidency of Senegal/Lionel Mandeix/Flickr/DR

African actors’ ambivalence towards foreign investment - encouraged and welcomed with great fanfare, but observed with a touch of aversion - is not necessarily unfounded.

The Atlantic brings pirates in the same way that rum brings confessions. Those who cannot cope should stay away from the coast and its temptations.

Picture a 40-something European who, on a December morning on the Santa Maria beach, has just downed his fifth drink and is babbling in four languages (French, English, Flemish and Russian) about his grandiose, obscure and unverifiable plans to invest in Cabo Verde’s hotel sector. How is he any different to the buccaneers who fought to secure strongholds for London, Madrid and Lisbon on this dusty, wind-battered but crucial islands on the route to the Caribbean?

Some four and a half centuries of capitalism have passed since Sir Francis Drake’s attack on Ribeira Grande (now Cidade Velha, one of the “Seven Wonders of the World” of Portuguese origin). The modern privateer would no doubt lean on a solid armada of lawyers and the legal framework provided by the trade and investment treaties that Cabo Verde has signed.

Incidentally, what does he have in common with this young French tech investor who placidly says: “My girlfriend and I said to ourselves that we had missed the wave of exponential growth in Asia. We have to do everything in our power to make sure we don’t miss out on the one coming to Africa.”?

Accusation of predation

Some will no doubt take offence – and rightly so – at the ‘monstrous confusion’ between historical theft on the one hand, and investments that create jobs and local wealth on the other. Promoting foreign investment appears to be a ‘constitutional achievement’ on the continent.

Policy-makers are deeply concerned about the decline in foreign direct investment, which went from 2.65% of gross domestic product in 2015 to 1.75% in 2019 (before the effects of Covid-19 were felt), in sub-Saharan Africa.

Whenever foreign behemoths acquire African start-ups worth hundreds of millions of dollars, this is seen as a cause for celebration – perhaps with good reason. The Italian giant Eni’s $11bn investment, aimed at developing the potential of the Baleine field in Côte d’Ivoire, is attracting a lot of interest.

“If conquering and plundering were enough to be considered developed, then humanity would have been bathing in opulence for the the past two thousand years,” said the essayist Jean-François Revel in his preface to Carlos Rangel’s L’Occident et le Tiers-Monde (The West and the Third World) (1982).

Burnt-out people and battered children

Perhaps the continent (and it is not alone) still has a deep-rooted anxiety when it comes to foreign investments because it still tends to associate them with a burnt-out man in front of a fire-eater and battered children being hit with a belt – sometimes even with a wedding belt. Many African business leaders have had reservations about depending on foreign capital, from Aliko Dangote to Jean Kacou Diagou and Othman Benjelloun.

It is encouraged, expected and welcomed with fanfare, but also observed with a hint of aversion that often accompanies an admission of helplessness.

This double anxiety is perfectly described by the Greek poet Constantine Cavafy in En attendant Les Barbares (Waiting for the Barbarians) (1904), in which the fever and ambivalence of expectation turns into panic when a disappointment is made clear. “But then, what will become of us without the Barbarians? These people were, in short, a solution,” says the poem.

That is where the problem lies.

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