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6. Going Continental, Going Global: Africa’s Corporate “Giants”

Scott D. Taylor Indiana University Press ePub

6

GOING CONTINENTAL, GOING GLOBAL

Africa’s Corporate “Giants”

INTRODUCTION

The champions of the view that Africa is “open for business” display an almost unbridled enthusiasm for Africa’s private sector development prospects. Even those who insist that business in Africa is an exercise in intrepidity, such as the producers of the preposterously titled 2009 CNBC series “Dollars and Danger: Africa, the Final Investing Frontier,” wish to convey that there are great opportunities for entrepreneurship in Africa.1 Notwithstanding the enthusiasm of this crowd for business on the continent, their interest is mainly in the potential of small- and medium-scale enterprises, which tends to be the focus of most policy initiatives as well as academic research. Indeed, the principal target of private sector development programs, as described in chapter 3, is expansion of SMEs. Likewise, though their aim is analytical rather than promotional, Ramachandran, Gelb and Shah similarly focus on medium-sized firms, analyzing the constraints faced by entities of this size.

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1. African Business and Capitalism in Historical Perspective

Scott D. Taylor Indiana University Press ePub

1

AFRICAN BUSINESS AND CAPITALISM IN HISTORICAL PERSPECTIVE

INTRODUCTION

Many contemporary observers tend to portray business in Africa as a fairly recent phenomenon or a colonial import. This ahistorical view has advantages for those subscribing to Afropessimist and neopatrimonialist positions, who use it to justify continued skepticism about the prospects for Africa, particularly for black business in Africa, as well as for the enthusiastic globalizationists, for whom it provides evidence of the novelty of business on the continent. This portrayal, of course, is inaccurate, as historians have documented the fact that business in Africa has thrived for centuries and has involved both indigenous African cultures and those from outside the continent. The trans-Saharan trade flourished from about the seventh through the sixteenth centuries and established the economic foundation for numerous African kingdoms and city-states. Later the Atlantic and Indian Ocean slave trades proved lucrative to Europeans, Arabs, and many African middlemen and kings alike. The period of “legitimate trade” that followed saw European coffers further engorged. And finally, during the late nineteenth and twentieth centuries, colonialism and imperialism yielded a tremendous increase in raw material flows to European factories and consumers, as well as the opportunity for European settlement and exploitation—which resulted in the establishment of many enduring commercial enterprises—in various parts of the African continent. Moreover, throughout each of these epochs, Africans continued to engage in commercial activity.

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5. From Patrimonialism to Profit? The Transformation of Crony Capitalists and Bureaucratic Bourgeoisies

Scott D. Taylor Indiana University Press ePub

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FROM PATRIMONIALISM TO PROFIT? THE TRANSFORMATION OF CRONY CAPITALISTS AND BUREAUCRATIC BOURGEOISIES

INTRODUCTION

The prevalence of crony capitalism in sub-Saharan African polities, from neopatrimonial regimes to stable political economies, has formed part of the subtext of each of the preceding chapters. In effect, the pervasive analytical frame of neopatrimonialism suggests that “modern” state institutions in Africa are but a façade, and this extends to thinking about markets as well. Those who consider African politics to be defined by neopatrimonialism assume that African business, at least business as conventionally understood in the West, is a highly dubious proposition because of the endemic corruption found in such environments.1 To them, an autonomous private sector, at least one with any clout or capacity to transform the economy and the state, faces impossible odds; it will be constantly penetrated by neopatrimonial state elites and therefore has no hope of playing a transformative role in the political economy.

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3. Business, the African State, and Globalization in the New Millennium: Transnational Influences and Domestic Responses

Scott D. Taylor Indiana University Press ePub

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BUSINESS, THE AFRICAN STATE, AND GLOBALIZATION IN THE NEW MILLENNIUM

Transnational Influences and Domestic Responses

INTRODUCTION

In Africa, the 1980s were a period marked by economic and political stagnation and exhausted statism, whereas 1990s ushered in sweeping changes. But if Africa throughout much of the 1990s was characterized by a liberalization and democratization imperative, despite very mixed results, events in the second half of that decade were paradigm-shifting, as both Africa and its international partners alike reacted to the failures of politics and of policy as well as to new exogenous forces. In other words, a high degree of learning occurred internationally, as well as at the national and societal levels, including that of business. The Washington Consensus began to unravel, and its decline accelerated in the wake of the 1997 financial crisis in Asia, which eroded confidence in its neoliberal prescriptions. By the start of the new millennium, a number of new developments had begun to transform much of the traditional thinking about African political economies, especially about the role of and prospects for the private sector. Thus, the beginning of the twenty-first century also laid down a significant marker for Africa and particularly for business on the continent.

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2. Institutional Change in the 1990s: Economic and Political Reform

Scott D. Taylor Indiana University Press ePub

2

INSTITUTIONAL CHANGE IN THE 1990s

Economic and Political Reform

INTRODUCTION

Some scholars regard the 1990s as something of a “lost decade” for Africa. In the wake of the calamitous 1980s, it appeared the region was mired in “permanent crisis.” Although economies began to show signs of recovery by the mid-1990s, there were genuine questions about sustainability; politically, democratic transitions were faltering. The economic hardship and political oppression suffered between 1979 and 1999 is well documented, and countless observers were properly dismayed at Africa’s dismal performance, but what it is less well acknowledged is to extent to which Africa’s economic and political institutions and ideologies have also changed dramatically in the past two decades.1 This chapter explores the origins of those changes in the 1980s and 1990s and examines how various aspects of liberalization affected business in Africa. As we begin the second decade of the twenty-first century—admittedly with the benefit of hindsight—the 1990s in particular look decidedly different; I contend that this period was in fact a critical juncture for the improvement of the political and economic environments for business.

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