There are two major ways the World Bank generates funds to provide credit facilities to backward countries such as Liberia. The bank receives funding from the advanced countries among its 189 member states. The US, EU, and China are the highest contributors to the Bank. The Bank also raises funds through the issuance of annual bonds on the international financial market. Annually, the bank issues between 50—55 billion USD in bonds to fund “sustainable development projects and programs” (World Bank website) mostly in the least developed countries.
The contributions of member countries come from the taxes paid by the workers and corporations from the respective member states. Keep in mind that European, American, and now Chinese monopoly and finance capital own and dominate Africa and brutally exploit its wealth that is produced by the African working class, peasants and other lower strata of African society. According to a 2017 Honest Account Report, “in 2017, US$134billion entered the continent mainly in the form of loans, foreign investments, and aid. However, US$192billion was taken out mainly in profits made by foreign companies, tax dodging, and the cost of adapting to climate change. Africa suffered the net deficit of US$58billion.”
The report also highlighted that foreign corporations operating on the continent repatriate US$32billions in profits to their home countries each year. These corporations pay corporate income taxes to their home countries. The home government then gives part of such revenue to the World Bank, and the Bank uses the funds to provide credit facilities to African governments in the name of funding road, hydro, and bridge projects. According to the Honest Accounts, “in 2015, Africa received US$32.8billion in loans but paid US$18billion in debt interest and principal payments, with the overall debt rising rapidly.” In the final analysis, African governments have been borrowing a part of the enormous profits accumulated by foreign corporations from the exploitation and transfer of Africa’s wealth.
The bank’s bonds are purchased by top global investors. As a matter of fact, we are in the monopolistic stage of capitalism. Suffice this to mean that global wealth is concentrated in the hands of a global elite clique. These global elites are investors who have shares in most giant monopolies that are exploiting the human and material wealth of Africa and racketing billions of dollars in annual profits. According to the 2017 Honest Accounts Report, “A recent report for War on Want found that 101 companies listed on the London Stock Exchange control an identified US$1.05trillion worth of resources in Africa in just five commodities – oil, gold, diamonds, coal, and platinum. These 101 companies have mineral operations in 37 African countries and are mainly British, with 59 incorporated in the UK.”
These figures are conservative as the corporations have a way of hiding their wealth accumulated from Africa through bogus accounting. Also, the value of resources taken out of the continent by American, French, and Chinese corporations, when considered, one would get a clear understanding of how economic governance in Africa is still tied to foreign interest and imperial plunder. Investors that have shares in these multinationals earn dividends from the social surplus produced by African labor. Part of the dividends, if not invested in productive economic activities, is used to purchase financial bonds such as World Bank bonds on the international financial market with the expectation of making more profit from the yield which ranges from 2,3,4, to 5 percent.
Economic surpluses that should have been reallocated to expand the productive capacity of Africa are on the contrary the preserves of foreign investors. These investors use the same surplus profits produced by the brows of African workers and peasants to buy World Bank bonds. The funds generated by WB are loaned to African governments and must have it paid back through brutal austerity measures (which leads to the underfunding of healthcare, education, etc.), high taxation on the income of low-income families, etc. What a tragedy!
The Bank not only provide credit facilities, but it also joins its imperialist twin, the (IMF) to dictate the macroeconomic policies of these backward countries. The Bank does not consider an African country for credit except the latter signs up to the IMF prescriptions. The economic methods and theories of the IMF are underpinned by neoliberal capitalism which promotes privatization, deregulation, de-unionization, austerity, minimun state intervention and participation etc. These are all measures that are tailored towards keeping the African economy within the global neoliberal order to provide unhindered access to foreign corporations Africa’s mineral and oil wealth. These policies deprive the African people of the needed capital to fund capital-intensive projects in health, education, infrastructure, social housing, energy, etc. Thus, the need to borrow more from the IMF and World Bank to finance import and piecemeal development projects.
Africa’s revenue code, public finance law, investment code, and national development plans are all written by the World Bank and IMF experts. The Ministry of Finance and Development Planning in Liberia have IMF and World Bank experts who play major roles in crafting that West African country’s austerity-prone national budgets. Contrary to the lies purveyed by these institutions, the neoliberal capitalist imposition has no history of delivering economic salvation to any country in the global South but has rather had a disastrous impact on suffering humanity. It continues to create and recreate political and economic form of exploitations that generate a slew of crises.
The net effect of these have been to reduce countries in the global south to ruins and rubbles. This does not mean African political leadership is blameless. Instead, African governments are ruling allies of the imperialist behemoths. According to Neil Clarke, (a British journalist), “African leaders can be lauded, but only if they toe the politically correct line set by the men and women in suits in the west.” This comprador African elite is corrupt, insensitive, and bereft of faith in the cause of the African people. As the foreign corporations plunder the soil and subsoil of the continent, the political elites pillage the public treasury of their respective countries. According to Transparency International, Africa loses about US$50billion annually to illicit financial flows. This amount accounts for money gained illegally by officials of government in Africa.
Ngugi Wa Thiongo was right when he argued that imperialism and its comprador alliances can never develop Africa. Insofar this neoliberal capitalist framework remains in place, no matter who becomes President, lawmaker, minister, or director, the crises would remain unending. Every attempt to alter this exploitative social relation of production and exchange has been thwarted by imperialist intrigues. We again pay homage to Dr. Nkrumah, Lumumba, Sankara, Amilcar Cabral, Chris Hani, and other martyred comrades who fell victim to the imperialist counter-revolution. But the more the pains of capitalism have struck the African people, the closer they get to the conclusion that a bold struggle needs to be waged against imperialist capitalism and all its superstructures on the continent. The Pan African socialist revolution has not faltered. It continues to ignite the flames of struggle and resistance throughout the continent.
Capitalism in Africa is horror without end!
Fight comrades, fight!
Note: This is an excerpt of an article. Jointly written by Comrade Moses Uneh Yahmia and Comrade Alfred Bombo Kiadii