A New Scramble for Africa?

By Hayden Siratt

Africa is quickly industrialising and has become the fastest urbanising region of the world. Africa’s population is set to double by 2050, more than 100 cities in Africa will contain over a million people by 2025, and the IMF predicts that Africa is on its way to becoming a $5 trillion economy. This expanding market has attracted the attention of multinational corporations, such as Google and Facebook, as well as nations looking to expand their influence, such as China. We are witnessing the beginnings of a new ‘scramble for Africa.’

During the nineteenth century, the European empires divided up Africa among themselves, a period in history dubbed as the scramble for Africa. This had an influential impact on African politics across the following century. Even after African nations won their independence in the latter half of the twentieth century, the negative effects – corruption, lack of infrastructure, and little governance –  from the scramble for Africa still resonate in African politics. However, what is happening today is different than what occurred in the nineteenth century, with a different set of players, different objectives, and a possibility that Africa can emerge on top.

There are major differences between the first scramble for Africa and the scramble going on today. The players in the first era were the great European powers with the objective of exploiting the natural resources of the African continent. Whilst today, the players are multinational corporations and nations with the objectives not to exploit natural resources, but to gain influence and find new economic opportunities in expanding markets.

Take China, for example. China has filled the void which was left by the European powers after they left Africa in the latter half of the twentieth century. Over 10,000 Chinese firms now operate in Africa, and China has announced a $1 billion Belt and Road Africa infrastructure development fund on top of a $60 billion African aid package. China is now Africa’s biggest trading partner generating over $200 billion per year, and the country is highly interested in the continent’s long-term economic and political stability in order to keep access to its valuable natural resources such as carbonatites, cobalt, and cotton.

Interestingly, Beijing does not back most of these projects directly. Rather, Chinese state-owned enterprises (SEOs) operate with the goal of profit in mind. Although it is true that it is difficult to separate the Chinese government’s interests from their commercial ventures as their goals are often overlapping, it is important to note that these projects often do not have the direct backing of the Chinese government. This highlights an important difference between the first scramble of Africa and what is going on now with private companies and firms operating without the explicit backing of their governments.

Looking at what Western corporations are doing further solidifies this point. With Western governments’ continued disinterest in Africa and African affairs, private corporations are filling the gap to find new business opportunities in the expanding market. Facebook and Google are investing billions of dollars to bring free internet to even the most rural parts of Africa. These companies have tried many projects to bring internet to Africa, such as gigantic drones to provide high-altitude connectivity and even helium balloons in the stratosphere. Though these projects have not seen much success, Facebook and Google are still working on expanding internet recently announcing over a $1 billion plan to build sub-sea cables to connect Europe to the Middle East and to Africa. The reasons for doing this are simple: to tap into the rapidly growing African market which can generate billions of dollars. However, the data collected from these new users are sitting in California at the headquarters of Google and Facebook which makes the data, necessary to assist in research and development projects headed by African companies or nations, difficult to utilise, as well as raising concerns of personal data privacy.

In addition to governments and private corporations’ investment in Africa, international institutions are investing heavily in Africa especially in big data, data generated through our increasing use of digital devices and web-supported tools and platforms in our daily lives and the analyses that goes with that data. The reasoning behind this is to allow African nations and companies to utilise big data to find more opportunities for research, development, and healthcare. The UN Economic Commission for Africa (UNECA) has invested in Africa’s first big data hub in Rwanda which became fully operational at the beginning of 2020.

The benefits of big data directly in Africa are massive. Big data was instrumental in tackling the Ebola virus where data scientists tapped into phone data to visualise population movements of Ebola patients and forecast how the disease could spread. This allowed healthcare providers to set up treatment centres in the best places, and limit travel in certain areas to control the disease. Scientists at the University of Cape Town collaborated with the big data centre at Griffith University in Australia to find a breakthrough in malaria medicine. On the economic side, data on mobile money transfers in the aftermath of the 2008 earthquake in Rwanda revealed that wealthier individuals were more likely to have support from others and did not need government support, and this helped inform policymaking.

            Big data can also be used to track inflation and further assist in making policy decisions, which have the potential to boost a countries GDP (Gross Domestic Product) overnight. If African nations build more of these big data hubs, they can have access to data directly without relying on foreign data centres but also expand their potential to collaborate on equal footing with foreign data centres.

All these projects from multinational corporations, foreign governments, and international institutions provide many benefits to Africa. The improvement of physical infrastructure allows for more sustainable natural resource extraction, economic stability, and boost in trade; the advancement of digital infrastructure allows for the African people to become more connected with information and international collaborative opportunities; the investment in big data centres allows for more informed policymaking, healthcare research, and increased economic opportunities. These benefits increase the power of African governments as well as the African people; however, with power comes the inevitability of corruption and evil.

One of the biggest problems in African politics is corruption, with African leaders infamously looking after their own interests over that of their people. Facebook and Google in their quest to bring free internet to Africa have faced set-back after set-back with African governments frequently shutting off social media or the internet outright for periods of time. Facebook and Google who lack substantial political power in the region are forced to comply with government restrictions which results in African people being restricted from platforms and thus not having freedom of the internet.

While big data has enormous benefits, it can also be used as a means of control. With data privacy rights essentially non-existent in Africa, governments can utilise massive amounts of data to keep a close watch on their people and stamp out any threat to their power. In the private sector, it has been demonstrated time and time again that private companies are notoriously bad at protecting the data of their users allowing for easier opportunities for propaganda and the potential to sway elections. This was exemplified by the Cambridge Analytica scandal where a private data company utilised military grade technology to influence elections in most notably the US but also in developing countries in Africa. Cambridge Analytica worked on political campaigns in Nigeria and Kenya.

Though physical infrastructure is necessary and provides many economic benefits and quick investment seems attractive as it generates very quick economic growth, the long-term ramifications are monumental. A country is put at risk of ‘debt-entrapped’ when it is under a tremendous amount of debt to another country. This makes a nation effectively bound to another which decreases its sovereignty on the international stage. While this has yet to be fully realised, it is starting to become a more apparent risk.

In Djibouti, where around 77% of its debt is owed to Chinese finance, allows for China to pursue geo-strategic goals, such as China utilising Djibouti’s major port as a de-facto military base forcing the firms that operate there to provide support to the Chinese navy when needed. In addition, Djibouti’s debt overhang, debt so large that a country cannot take on any more debt to finance future projects, has caused economic development to massively slow down. Though it is true that there are not many cases in which debt diplomacy has played a role in Chinese investment, cases like Djibouti’s cannot be overlooked as it questions the true motives behind Chinese investment.

This time Africans themselves can come out on top in this new scramble for Africa. However, African governments and foreign investors must act with the betterment of the African people in mind. This can happen but relies on many big changes. Data privacy must be enshrined in law but can only be done if the government chooses to enact it. The role of international institutions will soon become crucial in deciding how this new scramble for Africa will play out if it is to avoid a repeat of the first one. International institutions may need to compel governments, through threat of sanction and loss of investment, to enforce privacy laws, and keep foreign investors in check to ensure that they are not pursuing new economic opportunities with only their self-interest in mind and eliminate risks of debt-entrapment. This relies on the backing of the whole international community.

The African continent has already seen great benefits from these foreign investments, such as in healthcare, expanded economic opportunities, and better connection to the rest of the world. However, it begs the question, are these benefits a cloak for the more sinister motives of the foreign investors who are just looking to exploit the expanding African market?

The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s