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Multinational Corporations in the African Economies: Bane or Blessing?

August 23, 2014

By TANGWE Abraham

download (18)Multinational corporations (MNCs) are companies with plants or direct investments in one or more foreign Countries. There are also known as Transnational corporations. They have their home or headquarters in one Country and owns and run subsidiaries in other Countries. It is therefore a corporation that operates in a multiplicity of environments. Africa after independence was inundated by a plethora of such companies which have hard a stranglehold on the African economies. They have had some positive fallout but with the limitations of such companies the main reason why African development is still farfetched.

Their origins and evolution in the African economies was well crafted and executed. After the Second World War, their presence was effectively felt and this was explained by the fact that instead of trying to break through tariff and other barriers to be able to export goods to other Countries, many of these companies found it easier to gain access inside such Countries in order to save transportation and other costs so as to make their goods more competitive. Also, many of these Countries offered cheap labour, special tax treatment or exoneration, the new technological innovations and the spread of communication and travels, the containerization of cargo and the emergence of computers capable of storing large amount data all made it possible for MNCs to expand their operations.

Postcolonial Africa faced a mountain of socio-political and economic problems which brought untold misery to the African people and  thereby forced them to look for means and ways of tackling the problem and this made the MNCs to appear useful in salvaging them from such precarious settings.

MNCs provided the much needed capital?, technological and marketing skills in exchange for a very profitable market. This has been compounded with their use of sophisticated marketing methods and organization with maximized linkages with their metropolitan base.  The talk of transferring technology is a farce because you cannot transfer technology and expect it to stick. Technology has to be invented taking cognizance of the inherent societal peculiarities for it to thrive.

However, their activities have helped in job creation, nay, employment improving in the process the national income through their payment of taxes which the Economic Partnership Agreement with the European Union is sure to put into jeopardy. Such employment and improved income for governments led to improve development, standards of living and the undertaking of reforms.

At first glance, MNCs appear to be real developmental partners but a careful examination of their intrinsic undertones would disclose their devilish savvy in exploitation as they retard African economies, sap resources living the hitherto buoyant natural resource base barren thereby leading to an anomalous situation that injects underdevelopment than development. MNCs are neo-colonialist creation or agents bent on advancing the capitalist ethos.

The dependent theory of Wallerstein is a good base for this argument. This theory argues that the African economies are peripheral or based on primary products to be exploited by the industrialized nations or their agents who are the MNCs. Other theorists like Frank simply posit that the world economies were divided into the developed economies or metropoles and the peripheries or underdeveloped economies with the peripheries dominated by the metropoles. These ideals at face values refer to an era akin to the colonial period but a critical look reveals a different scenario.

As such, we realize that independence to African states was a smokescreen with diminished control over the elites and a “behind the scene” stranglehold of the African economies by the MNCs and their agents otherwise referred to as neo-colonialism. The metropole has therefore ceded that exploitative role to the MNCs who are more ruthless in their drive for profit which has left the African economies under permanent anesthetics or the economic surgeons “thieving” knife.

Unlike the colonial enterprise that was contingent on purity and as far as procedure and end results were concerned, the MNCs opted for a mélange of both; they used all the local mechanisms to extract profit even at the expense of looking for indigenes to control capital. MNCs are in quest of amassing wealth at the detriment of other variables like the welfare and developmental needs of the given societies.

Underneath the MNCs is found a vicious lethal drive for an outright extinction of the African economies. They were seen as offering the so –called modern industries to Africa but their interests in doing so conflict in part with African developmental goals and given the marginality of Africa to global goals or operation, they are in a position to drive very hard bargains.

Perhaps, referring to them as “devils incarnate” may be hard but their destructive base far exceeds their productive base. This could be discern via the Oguni crisis where the late environmentalist Ken Saro Wiwa vigorously  challenged the American oil consortium Shell for environmental pollution without a corresponding  fallout to the affected masses. This led to a kangaroo court trial session for him on trump up charges for allegedly masterminding  the murder of some Oguni chiefs who were against his campaign and was later executed. The late dictator, Gen. Sani Abacha therefore cooked this alibi with Shell to silence him.

In 1997, ELF, the French oil company sponsored and masterminded the overthrow from power of Prof. Pascal Lissouba because it was alleged that he was about to grant the exploration of new oil wells to American companies on a better deal. ELF decided to sponsor a stooge in the person of Denise Sassou Nguessou to reverse this trend and allow them a permanent monopoly. In fact, this is what has forced President Yahyah Jammeh of the Gambia to remark that is better to allow the resources to remain in the ground than exploiting them with nothing to show for it by the people.

We can go on and on. What happen to the contract of construction of a bridge linking the economic capital of Cote D’Ivoire, the French, Laurent Gbagbo and the Chinese? Of course, the Chinese who had a better deal were sidelined with the French and their Shylock terms holding sway and with Gbagbo standing trial for war crimes! Take a walk down memory lane with Charles Taylor and the Americans. Is Charles Taylor really guilty of fanning and abating war in Sierra Leone and for war crimes?

What is glaring is that MNCs wield impressive political, economic and social power. It does not matter whether that power is sought or unsought. It exists! More so, if the political survival of the host government is therefore at stake due to the economic operation of an MNC, that host government is pressured unless it can provide expertise through alternative sources to grant favourable concessions to guest MNCs. You can check the former Zaire under Mobutu where extremely favourable concessions were granted to a number of MNCs for exactly the same reasons and suffice to state here that Zaire is just a storm in the tea cup.

images (9)MNCs decisions can either reduce or increase employment levels within a Country, compromise or enhance the security of a Country (Nigeria and Congo Brazzaville) and lead to greater or lesser dependent on it by one country or another. One scholar has rightly remarked that the relationship between MNCs and  the nation-states can be termed as “sovereignty-at-bay” meaning that the power and authority of national governments is being at least challenged if not completely overtaken by MNCs.

MNCs are therefore a bane or trauma to African governments and to solve the problem, nationalization or getting a majority of shares in these corporations is a condition sine-qua-non. Nationals should be allowed to group themselves and allowed to put resources together, safeguarded by national governments for their development. Zimbabwe is trying in this direction but this must be accompany by the requisite through quality education.

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9 responses to “Multinational Corporations in the African Economies: Bane or Blessing?”

  1. Pa says:

    “In fact, this is what has forced President Yahyah Jammeh of the Gambia to remark that is better to allow the resources to remain in the ground than exploiting them with nothing to show for it by the people”. Dictator Jammeh is a hypocrite who do not practice what he preaches. The guy is is stealing on his people and he is a dictator who is hiding his greed for power and wealth behind any ideology including Panafricanism. Your reports are only credible when yours reader take you seriously, and by quoting dictators like jammeh, you may loose your credibility.

  2. TANGWE Abraham says:

    It is right for you to feel that way depending on which side of the divide you find yourself. Jammeh is not a saint and will never be one. He is taking advantage of the trappings of power but undertaking giant strides for the Gambian people.

    My dear brother, there is no leader who is not a dictator, not even you at the level of the family. Dictating is part of the game and he is playing it well. At least, you would not deny him the credit of constructing the lone university in the Gambia which has transform the lives of his people. In equal measure, you will not deny him the crediting of empowering and uplifting women to higher heights. Quoting him tells you that he has brains that can change the status of Africans and Gambians unlike some of the so-called democrats who hide behind democracy to auction the national patrimony of their people for a pittance. He can be a dictator and a thieve but with bright ideas. Don’t you think we simply borrow those bright ideas of his for our good? Who is better; a benevolent despot or a lackey?

  3. Pa says:

    “At least, you would not deny him the credit of constructing the lone university in the Gambia which has transform the lives of his people”. Any development under a dictatorship is unsustainalble because it can all be destroy in one day or weeks just like in Lybia, Syria, West Germany etc. There is no essence of having big ideas or visions in a society which is declining. If Jammeh is having that brain as you claim, why then is he using the same Gambian resoures to enrich himslef whilst his people are getting poorer everyday? If he has that brain why is he then afraid of his critic, killing them and sending his brains(the Gambians)to prisons or into exile just because they disagree with him. Jammeh`s ” bright ideas” means nothing to the Gambians since these ideas are not bringing any sustainable development to the people and the country. You may loose your credibility by associating yourself with dictators because they are hypocrite and not truthful.

  4. TANGWE Abraham says:

    Your arguments are palpable but be reminded that the issue is not aligning myself to any dictators as such. It is a matter of the truth that becomes a bile tickling issue to those who detest it. Let me repeat here that President Jammeh IS NOT A SAINT but you cannot dismiss his achievements with a simple wave of the because he is “enriching himself” as you claim.Who is that African leader who is not guilty of this crime? Tell me one.

    We should not be eaten up by the syndrome of gullibility at all times. I thought you were going to refute his achievements but you have not which means there is something about him that is positive. All the so-called dictators and thieves have most of the time been vindicated.

  5. Pa says:

    “Your arguments are palpable but be reminded that the issue is not aligning myself to any dictators as such”. Am a reader and i just want writers like you to look before you lip. Quoting dictators and regonising their propaganda statements as big ideas is deceiving.If you want to be respected by your readers, it is better to quote statements from people who are decent and human.
    Those “archeivements” under jammeh are elephant projects meant for propaganda to deceive people like you but they are no benefit to the people of The Gambia. If fact jammeh is not the only Gambian who can build that country and he does not need to be a dictator to lead his people. I do not need a castle that is built on the soil of death innocent citizens.
    Again, if you want to be respected by your readers, better quote statements from people who are decent and human. Everything about jammeh is fake, the guy is a bandit.

  6. Pa says:

    “Who is that African leader who is not guilty of this crime? Tell me one”. Wrong is wrong even everybody is doing it and right is right even nobody is doing it. Do not ignore their evils just because they made “archeivement”(elephant projects/propaganda institutions).
    Theives and dictators cannot be vindicated because the evil they did will always follow them.

  7. TANGWE Abraham says:

    Dear Pa, you got it right but I do not seem to get an example. The positivists are of the opinion that the we should disregard the lapses inherent in people and identify and commend the positive side of them.

    Granted that Jammeh is a dictator and a so-called thief as you insinuated in your earlier write up, why single him out when everyone else is so enmeshed in the same mayhem? Why is his case peculiar? Is this dust simply because he was quoted for identifying something good and saying it?

    Let me remind you that brazen thievery is rife in this same world with a plethora of dictators everywhere. The case of the Africans is glaring because they cannot pull strings. Reasons why when the same crime is committed in the west and Africa, that of African leaders are projected and they are arrested at will but not their peers in the west.

    Pa, put your searchlights on and you would realize that the greatest thieves and dictators are those in the west who abate stealing by allowing the wealth to be starched in their institutions. Even at that, they use the same resources to borrow just the interest to you at their own dictated terms. Let us not leave the substance and hang on the shadow.

  8. Pa says:

    Mr Abraham, i do not hang on shadow and that is the main reason i ask you to watch out before quoting individuals like jammeh. What he says is quiet different from what he does. The guy is not better in anything than the Western leaders, if fact he(like many other African leaders) are doing worst to the own people than what the western leaders are doing to their own people or in foreign lands. Am a Gambian and i know very well that the likes of jammeh are not ready/cannot pull the strings. Anyway thanks for your kindly responds.

  9. BoomerGal says:

    Corrupt leadership is the primary reason the Pan-African vision is so slowly being realized. There must be trust in the leadership in Africa, if we, as Africans, in any part of the world, are ever going to come together as one. When there is evidence of a benevolent and caring leadership, trust will be established and not until then.

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