The focus of international discussion of Trump’s disputed import tariffs for steel, aluminium and even cars has until now been on the big global players. However, African countries in particular will suffer from the planned punitive tariffs, just as in the famous African proverb – ‘When elephants fight, it is the grass that suffers’. After years not just of talk about partnership but of actual legislated agreements and treaties promoting international economic development,1 Trump’s tariffs are a severe blow to participatory foreign trade and sustainable industrialisation in Africa. Egypt and South Africa, for example, potentially the African countries most affected, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economies and those parts of their populations in dire poverty. Trump’s intervention thus joins the continuing power politics of former colonial powers vis-à-vis Africa. Nevertheless, despite these asymmetric power relations, unfair trade relations and the desolate state of African infant industries are not necessarily due to externalities. More often than not they are home-made. African agency plays an ambiguous role in enhancing participatory trade and indigenous industrialisation.
Impact of Trump’s tariffs on African trade
Not least since the derogatory comments on Africa made by the US president in January 2018, in which Donald Trump described African states as ‘shitholes’, the weight he attached to Africa became clear beyond doubt (Greef and Chan 2018). Evidently, from his point of view, America’s greatness is based on other spheres of influence than Africa. This disregards the fact that Africa and the African diaspora have contributed significantly to the making of the United States, to its development into the country that it is today, as Clayson Monyela, a spokesman for the South African Department of International Relations and Cooperation, underlined recently (Ibid.). Trump rather concentrates on global competitors, such as China, Russia and Europe in order to ‘put America first again’.
In absolute terms Trump may be right. The dimension of imports of steel and aluminium from Africa may be negligible in relation to overall imports and their supposed negative effects on employment of US working-class whites in Rust Belt states such as Pennsylvania, Michigan, Wisconsin and Iowa, who belong to the clientele of Trump’s republican voters.
However, Africa is far more dependent on overseas trade than other economic regions and global players such as the EU or North America, which conduct 63% and 40% respectively of their business with their regional neighbours, such as the EU member states, Mexico and Canada. Major reasons for Africa’s dependency are the fragmented intra-African market, decades of stagnant regional and continental integration, high transaction costs, and corresponding tariff and non-tariff barriers to trade. Most of these barriers are at least partially due to rival neo-colonial foreign trade networks of anglo-, franco- and lusophone African countries, like the French ‘Messieurs Afrique’ network (Kohnert 2005).
In view of the continent’s limited local and regional markets, Africa’s infant industries rely heavily on foreign trade. Intra-African trade accounts for far below 20% of total African foreign trade. The Pan-African Free Trade Agreement (CFTA) that was negotiated at a special African Union summit in Kigali, Rwanda (21 March 2018) by 44 African states is not likely to change this situation in the foreseeable future. The CFTA is supposed to liberalise intra-African services completely and 90% of trade in goods. Yet, the common external tariffs have not yet been negotiated, not least because of the controversial EU–Africa Economic Partnership Agreements (EPAs) (Kohnert 2015), but also because some of the major African countries, for example South Africa, Nigeria and Uganda, have not yet joined the CFTA.
Finally, unfair trade relations to the disadvantage of African countries have overshadowed African foreign trade since colonial times. Africa is still integrated asymmetrically into global trade. Raw material and agricultural exports on the one hand and capital goods imports on the other still dominate African foreign trade. One of the origins of Africa's current inability to benefit fully from the expansion of world trade lies in the colonial division of labour, the consequences of which persist in economic structures to a far greater degree than in other continents (Barratt Brown 2007). Under these conditions, the free-trade ideology of the Bretton Woods institutions, propagated for decades by structural adjustment programmes of the International Monetary Fund (IMF), has conserved the status quo rather than promoting sustainable African growth. All the more so, as Africa’s commodity prices have fallen in international markets since the 1970s, whereas at the same time consumer prices have risen. The divergences have increased dramatically because of the asymmetric response of domestic consumer prices to movements in world prices. Nigeria, Egypt and South Africa, for example, are among the major losers in terms of export losses as a result of unfair trade in the commodity markets for petroleum, rice and wheat in the past decades (Morisset 1997, 22). This imbalance had been commonly attributed to trade restrictions and rising processing costs. But in reality it appeared to be caused largely by the behaviour of international trading companies large enough to dominate most commodity markets (Morriset 1997). All this makes for the volatility of African foreign trade relations that would still be aggravated by Trump’s tariffs.
Still, Africa is mostly ignored in the international scholarly discussion about the effects of Trump's protective tariffs on steel (25%), aluminium (10%), cars and other imports (see Table 1 and Table 2).2 Trump’s ‘trade war’ meanwhile has extended to far more than steel and aluminium. Regarding US steel imports, South Africa ranks only 20th on the global list of steel exporting countries, far behind Germany (8th) or China (10th) (see Table 3). However, in Africa there are also countries and sections of the population that would suffer significantly from the new protective tariffs planned by the US government supposedly to safeguard the USA’s ‘national security’, as will be shown below.
| Country | Value of cars imported (US\(billions) | Percentage of all cars imported (%) |
|---|---|---|
| United States | 179.6 | 23.9 |
| Germany | 58.5 | 7.8 |
| China | 49.9 | 6.6 |
| United Kingdom | 44.1 | 5.9 |
| Belgium | 36.4 | 4.8 |
| France | 34.7 | 4.6 |
| Italy | 31.2 | 4.1 |
| Canada | 28.7 | 3.8 |
| Spain | 20.2 | 2.7 |
| Australia | 17.5 | 2.3 |
| Netherlands | 12.8 | 1.7 |
| Mexico | 11.5 | 1.5 |
| Japan | 11.1 | 1.5 |
| Switzerland | 10.5 | 1.4 |
| Austria | 10.1 | 1.3 |
Source: Car imports by country (Workman 2018): ‘The listed 15 countries purchased almost three-quarters (74%) of all cars imported during 2017. Among the above countries, the fastest-growing markets for cars since 2013 were: Spain (up 78%), Italy (up 54.3%), Germany (up 42.3%) and Mexico (up 36.2%). Only one top country posted a decline in its imported car purchases, namely Australia via its modest -0.9% dip from 2016 to 2017.’
| Country | Value of cars imported (US\)) | Percentage change in value since 2013 (%) |
|---|---|---|
| Canada | 43.8 bn | +0.1 |
| Japan | 40.7 bn | +4.9 |
| Mexico | 30.6 bn | +49.4 |
| Germany | 20.8 bn | –19.8 |
| South Korea | 16.1 bn | +29.1 |
| United Kingdom | 8.8 bn | +71 |
| Italy | 5.1 bn | +221.1 |
| Sweden | 2.2 bn | +203.3 |
| Slovakia | 2 bn | +123.3 |
| China | 1.8 bn | +1,759 |
| Hungary | 1.2 bn | +202.7 |
| Finland | 1.2 bn | +11,883 |
| South Africa | 1.1 bn | –50.4 |
| Turkey | 911.8 mn | +666.5 |
| Spain | 816.9 mn | +4,572 |
Source: Car imports by country (Workman 2018): ‘The listed 15 countries shipped 98.6% of all American cars imports in 2017. Among the above countries, the fastest-growing suppliers of cars to Spain since 2013 were: Finland (up 11,883%), Spain (up 4,572%), China (up 1,759%) and Turkey (up 666.5%).’
| Rank | Country | 2017* (million metric tons) | Percentage change from 2011–2017 (%) |
|---|---|---|---|
| 1 | Canada | 5.8 | +5 |
| 2 | Brazil | 4.7 | +66 |
| 3 | South Korea | 3.7 | +42 |
| 4 | Mexico | 3.2 | +24 |
| 5 | Russia | 3.1 | +146 |
| 6 | Turkey | 2.2 | +238 |
| 7 | Japan | 1.8 | –2 |
| 8 | Germany | 1.4 | +40 |
| 9 | Taiwan | 1.3 | +113 |
| 10 | India | 0.9 | +16 |
| 11 | China | 0.8 | –31 |
| 12 | Vietnam | 0.7 | +506 |
| 13 | Netherlands | 0.6 | +14 |
| 14 | Italy | 0.5 | +86 |
| 15 | Thailand | 0.4 | +478 |
Note: *Annualised, based on year-to-date through October.
Sources: US Department of Commerce, Census Bureau, Foreign Trade Division, HIS Global Trade Atlas Database.
Besides, the following examples of African countries, who have little power to retaliate, show that Trump’s protectionism is inspired not only by economic and ‘national security’ reasons, which may be allowed for under World Trade Organization (WTO) regulations, but also by intentions to enforce ‘good conduct’ of trading partners in order to ‘make America great again’ which are clearly illegal under WTO rules (AP 2018). In this respect, the USA went to considerable lengths to punish Africans for refusing American second-hand clothes: the case in question concerns Rwanda, which – like many other African countries – was once a proud producer of home-made textiles. But decades of mismanagement, instability, the market liberalisation of the 1980s and the subsequent global competition with cheap Chinese imports, as well as overstocking of African markets with used clothing from overseas, all brought the African local textile industry to its knees (John 2018). In view of these factors, the East African Community (EAC) decided in 2015 that second-hand apparel would be banned from their markets from 2019. In retaliation, the US threatened in 2017 to remove four East African countries, Kenya, Uganda, Tanzania and Rwanda, from its African Growth and Opportunity Act (AGOA), because of the US’s declared aim to eliminate trade barriers. Whereas subsequently Kenya, Uganda and Tanzania backed out of the agreed ban, Rwanda did not do so, in order to protect its nascent garment and textile industry (Dahir and Kazeem 2018; Harris 2018).
Steel and aluminium production and imports to the USA
The USA is the world’s largest importer of steel and aluminium. In 2017, it imported 34.6 million tons (mmt) of steel. As a result of growing productivity, the US is producing more and more steel with fewer and fewer workers. Just under 300,000 workers were employed in the US steel sector in 2015, with a decreasing trend, to the current level of 8.5% of the workforce in the manufacturing sector. The volume of imported steel in the United States in 2016 was 15% higher than that of Germany, the second largest steel importer in the world. Although steel imports to the USA were sourced from over 85 countries, just four exporting countries, Canada, China, Russia and the United Arab Emirates, were by far the biggest suppliers of steel to the USA (together providing 75% of total US steel imports), none of them African.
In the case of aluminium, the USA’s dependency is even more pronounced,3 and this dependency has increased steadily over recent decades. For a range of products as diverse as beer cans and aircraft, the US now sources about 90% of the aluminium required from imports. While there were still 23 aluminium smelters in the US in 1993, today there are only five. Just one of these is capable of producing the high-purity aluminium that is needed for aircraft construction (Global Steel Trade Monitor 2018). However, the jobs in the aluminium smelting industry that Trump wants to protect constitute only 3% of total jobs in the aluminium industry. The remaining 97% (about 156,000 jobs) are in the downstream manufacturing industry (Washington Post 2018). US business has already warned against an ugly trade-off – increasing tariffs would also raise prices in the US automotive and aviation industries, making their jobs less competitive internationally.
Economists worldwide warn against a trade war (Lim 2018; Malawer 2018; Pelkmans 2018; Peterson 2018). They do acknowledge that the global overproduction of steel and aluminium is a problem that needs to be solved. Nonetheless they also raise concerns that in restricting free-market rules by unilateral taxation of imports as envisaged by Trump, the Trump administration not only violates WTO rules, but would also cause lasting damage to the global economy. Moreover, economists caution that Trump’s protectionism could spread to other industries and countries (Ifo 2018). However, they admit that the world trade system, and in particular US–EU trade relations, urgently need to be reformed, especially as the EU has built more trade barriers in recent decades than the US (Deutschlandfunk 2018). Moreover, African economists give notice of collateral damage of a possible trade war between the major global players, notably a negative impact on productive capacity and jobs for Africa’s infant industries (Creamer 2018a).
Steel production in the US and Africa in comparison
The steel production in the USA in January 2018 was 6.822 mmt, i.e. about 10 times as high as in Egypt (660 mmt) or South Africa (577 mmt). Major African steel exporters Libya (48 mmt) and Morocco 45 mmt (August 2017) were far behind, in third and fourth place respectively. Globally, South Africa and Egypt rank 22nd and 27th in steel production, that is, far behind China, the world's largest steel producer, with 808.4 mmt or 50% of world production. Still, barely 2% of the steel imported into the US in 2017 last year came from China. Share levels in aluminium were a bit higher, but not predominant either. The vast majority of Chinese steel shipments went to other countries. Trade diversion as result of Trump’s protective tariffs could lead to the dreaded crowding out of private sector spending. In addition it would create cut-throat competition with respect to infant African steel industry.
However, compared to the USA, China or Europe, the metalworking industry in African countries, such as South Africa or Egypt, has a significantly higher importance for its domestic economy and sustainable growth. In total, the manufacturing industry in South Africa had 1,213,560 employees in 2014, of which the largest share was in the metalworking industry, with 257,098 or 21% (S&P 2018). In Egypt, the total number employed in industry in 2015 – including mining and quarrying (incl. oil production), manufacturing, construction, and public utilities (electricity, gas and water) – was 25% of all economic sectors, with its steel industry considered to embody the nation’s economic resilience (OGB 2016; World Finance 2018).
Steel and aluminium production in Egypt and South Africa and US imports
(a) Egypt
Egypt exported about 170,000 metric tons (or US$102-million worth) of steel to the United States in 2017, accounting for about 3% of total US imports, with a rising tendency. The potential for a further increase in Egyptian steel exports was estimated by the Cairo Chamber of Metallurgical Industries (CMI) as promising (Nowar 2018). The MIC not only pleaded to be exempted from Trump’s duties, but also hoped that the export chances of other steel exporters to the US in competition with Egypt, such as Turkey, would be adversely affected. According to the MIC, Egyptian exports to the United States could even continue to increase and take the place of those countries such as Turkey that were unlikely to be exempted from US tariffs. Turkey exported 2.5 mmt of steel to the US in 2017. Egypt’s total foreign trade with the US rose by 13% over one year, from US$4.7 billion in 2016 to US$5.5 billion in 2017. Egypt’s Trade Minister Tarek Kabil recently stated that his country’s steel exports accounted for only 6% of total exports and that there would be still plenty of room for manoeuvre. Yet this was apparently wishful thinking, because Egypt was on the US Department of Commerce’s list of 12 countries due to be punished for alleged dumping or unfair trade with especially high tariffs, i.e. Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Korea, South Africa, Thailand, Turkey and Vietnam. According to the US Department of Commerce report The effects of imports of steel on the national security (US Department of Commerce 2018), the first of three options listed in the report embraced a global protective tariff of 24%. The second option included Egypt, along with 11 other states. For these 12 countries, a penalty of at least 53% on steel imports was recommended. Egypt would thus be much more affected by the punitive tariffs than, for example, the EU. Thousands of steel workers would be retrenched. Egypt could indemnify itself against US import duties – if at all – only with extraordinary foreign policy concessions, for example concerning Israel, which, because of Egypt’s lesser bargaining power, would probably be far more serious than similar concessions made by the EU or Germany.
(b) South Africa
South Africa, also benefiting from AGOA, is the biggest African exporter of steel to the USA. In 2017, South African steel imports to the US totalled US$950 m, and aluminium exports US$375 m. However, they represented only about 1.4% of total US imports, but a quarter of all South African exports to the USA. Losing the US market could put 300,000 metric tons of steel production at risk, along with some 7,500 jobs in the steel and manufacturing supply chain. The US market for aluminium produced in South Africa has been valued at US$375 m, accounting for 1.6% of US imports (Creamer 2018b). This is a good illustration of the asymmetric distribution of the risk of jobs losses in both countries. According to the South African Department of Trade and Industry (DTI), South Africa’s exports were not an unfair trade or a threat to US industry or jobs, but rather would serve as inputs to the USA’s manufacturing industry, helping to create jobs and increase US production (African News Agency 2018). Nevertheless, South Africa also figured on the list of the 12 countries that were to be subject to punitive tariffs, as noted above. Among the steel companies potentially affected are ArcerlorMittal SA and Hulamin, a Pietermaritzburg-based company that supplies aluminium products for Californian electric car maker Elon Musk's Tesla. Share prices for ArcelorMittal and Hulamin lost 5% and 4%, respectively, on 2 March 2018, the black Friday after the announcement (Bryan and Wasserman 2018). The local South African steel industry also feared that the US could use the ongoing discussion of protective tariffs as a springboard to levy tariffs on processed products, especially motor vehicles. Vehicle manufacturers such as BMW and VW South Africa downplayed the problem: VW, for example, pointed out that they did not export cars from South Africa to the US. But the government in Pretoria did apply for exemption from US tariffs in March 2018 (e-nca 2018), its motivation doubtless strengthened in view of the country’s steel industry already suffering from global overproduction and low world market prices, with South African jobs heavily at risk. Trump’s threats also influenced the exchange rate of South African’s currency, which is dependent on car exports. The South African rand depreciated against the US dollar by 2.5% between 27 February (US$1 = R11.57094), when the slump started, and the ‘black Friday’ of 2 March (US$1 = R11.86163).
Like the grass that suffers when elephants fight, African experts fear that it is smaller countries in particular that could suffer most from the trade conflict between the USA and global players such as China or the EU, notably Germany, that were singled out by Trump for allegedly having ‘taken advantage’ of the United States (AFP 2018). Unlike Canada, Mexico, Australia, Argentina or South Korea, South Africa is not such a significant US ally that it would be exempted from sanctions. The South African government learnt at the end of April that the US had not granted South Africa an exemption on its increased steel and aluminium tariffs from 25% steel and 10% aluminium tariffs across the board. Just before, South Africa had offered to restrict exports of these metals to the US to 70% of the 2017 level, but the Americans had turned down this proposal. Apparently, this was also a foreign-policy-motivated retaliation measure taken by the US after its announcement in late April that it wanted to cut foreign aid to countries like South Africa who don't vote with it at the UN (Wassermann 2018). To add to this, Trump announced end of May that the US Department of Commerce was investigating possible trade actions on imported vehicles of about 25% tax on imports for cars and trucks. In 2017, the US imported almost 37,000 cars from South Africa. However, South Africa ranked only 13th on the list of the USA’s top 15 car import source countries in 2017 (when it had reduced car exports to the USA by 50%; see Table 2). Thus, the USA was the second biggest importer of South African vehicles after the UK (54,400) (Business Insider SA 2018). Up till now, South African car manufacturers had duty-free access to the US market because of AGOA – which apparently will be also questioned by Trump in the long run.
Accordingly, South Africa will be disproportionately affected both in terms of jobs and productive capacity, although the DTI pointed out that some of the exempted countries are the ‘biggest’ exporters of steel and aluminium to the USA. According to the DTI, the exempted countries accounted for 58% of steel imports and 49% of aluminium imports to the US in 2017. Omarjee (2018) noted that ‘South Africa is therefore not a cause of any national security concerns in the US nor a threat to US industry interests and is not the cause of the global steel glut’, adding that the DTI complained that
Instead, South Africa finds itself as collateral damage in the trade war of key global economies. South Africa is concerned by the unfairness of the measures and that it is one of the countries that are singled out as a contributor to US national security concerns when its exports of aluminium and steel products are not that significant. (Omarjee 2018)
Further possible effects of a global trade war for African producers
Whether the USA would win a trade war triggered by the new US protectionism, as President Trump maintained (Franck 2018), is open to question. Presumably all affected countries would suffer. However, predictions on the outcome are highly speculative, especially if collateral damage or benefits of trade diversion provoked by higher tariffs are taken into consideration. Under certain conditions the trade dispute could even produce positive externalities for African producers.
For example, the retaliatory tariffs of up to 25% imposed by China on US agricultural imports could result in collateral benefits for major competitors to the US in citrus and wine imports to China. Australia would probably benefit most, but also, though to a lesser extent, South Africa and Egypt (Daniels 2018). In addition, if the new US import tariffs result in a reduction of the global steel price on stock markets, further positive externalities for African iron ore exporters like South Africa might develop in the commodity financial markets. Iron ore price shocks have a positive effect on real stock returns for iron ore producing countries. South Africa is in the world’s top three exporters of iron ore, alongside Australia and Brazil, which account for 86.4% of iron ore exports worldwide (Gutierrez and Vianna 2018).
Ambiguous role of African agency in fostering participatory trade and development
African civil society organisations as driver of change
The current dispute on the negative impact of Trump’s tariffs is only the most recent manifestation of a long-standing controversy between African countries and their Western trading partners. The debate was embedded in the framework of the Cotonou Agreement (2000), a cornerstone of EU–ACP development cooperation on the one hand, and limiting WTO rules on the other. The Cotonou Agreement was already built on generations of cooperation treaties since 1963, when most African countries had gained independence. At this time, the European Economic Community (EEC) developed a first generation of economic cooperation agreements, mainly with French-speaking African countries, the so-called Yaoundé Convention, later extended to the Lomé Convention (1975–1999). The new EU–ACP partnership is not restricted to governments: civil society organisations (CSOs) can participate too, as well as economic and social partners and the private sector.
Fortunately enough, social movements in Europe and Africa have arisen to contest imperial globality, fostering forms of counter-hegemonic praxis and politics against the imposition of neoliberal globalisation (Prempeh 2006). The ongoing controversy on the EPAs between the EU and Africa and the increasing impact of African agency on negotiations with the EU provide a prominent example (Kohnert 2014).
Building up civic agency is not only crucial for a sustainable process of democratisation but also for foreign trade to take place on a level playing field. The development potential of civic agency in African countries and elsewhere depends on internal and external variables which are interdependent. The domestic factor rests to a large extent on the capacity of citizens to overcome fault lines of ethnicity, class, gender, religion and partisan politics in their own country. However, this domestic capacity can be enhanced also by global developments and networks such as the spread of the Internet and mobile phones even in remote regions all over Africa, by international advocacy networks, and last but not least by motivating successful protest movements in neighbouring countries, like the Arab Spring or the wave of Sovereign National Conferences in Sub-Saharan Africa in the early 1990s.
Foreign influence on the development capacity of civic agency, both positive and negative, is often indirect and accidental, but not necessarily less effective. In many cases it is not visible at first sight, notably when it comes to its long-term effects. More often than not, it slips in under the radar screen of even well-intentioned aid donors because the institutional memory both of development agencies and related research and evaluation institutions is usually quite short (Bierschenk, Elwert and Kohnert 1993). In contrast, the aftermath of misguided development policies and failed development projects often remains embodied in the memory of the local population concerned over generations. However, its long-lasting impact is considered by the donors only occasionally, if at all (Kohnert 2017).
We can draw valuable lessons from civic agency in the realm of participatory trade politics in West Africa and elsewhere. They date back up to the Seattle protests of 1999 (Wikipedia n.d.b), which became a global symbol of civic agency by questioning the legitimacy of the WTO order. This was shown by Silke Trommer (2014) in her painstaking study of West African CSOs as symbols and innovative drivers of transparency and democratisation in the EPA negotiations of the Economic Community of West African States (ECOWAS) with the EU. Originating in the late 1990s, ‘national platforms of civil society organisations’ dealing with ACP–EU relations have, since 2006, become officially recognised by and deeply involved in ECOWAS–EU talks. Fluctuating over time, these CSOs comprised 15 organisations from 11 West African countries (in 2009) composed of a vast variety of groups, such as farmers’ associations, local and transnational NGOs, trade unions, women’s rights associations, etc. Each national member was responsible for lobbying at its respective national level. Although the degree of legitimacy and representativeness varies considerably among members, together they wield a remarkable political, social and economic influence, including access to core trade policymaking institutions like ECOWAS and the official EPA negotiation table.
African agency as impediment to sustainable development
Unfortunately, however, more often than not, African agency has been impeding sustainable trade and development of African countries, as will be shown below. In comparison, the set-back posed by the effects of Trump’s protective tariffs on US–African trade relationships is by far less important than self-inflicted barriers of African agency, namely large-scale corruption, nepotism and mismanagement at all levels of politics, economy and society. Scholarly studies of these impediments to development and the peculiarities of African ‘states at work’ are legion (Bierschenk and Olivier de Sardan 2014; Justesen and Bjørnskov 2014; Blundo and Olivier de Sardan 2006). However, let us be clear about it right from the start: African institutions or individuals are not the only one to blame for this, as more often than not they are closely entangled with their Western counterparts.
Informal institutions play a decisive role in African bureaucracies, politics, economy and society, but there is no such thing as a typical African culture of corruption, clientelism or mismanagement. Most cases of grand corruption in Africa, for example, have been instigated by global corporations. A recent example was the prosecution of French billionaire Vincent Bolloré, owner of one of the largest transport and logistics operators in Africa, for ‘bribing foreign public officials’ in Lomé and Conakry, in order to obtain two lucrative container terminals in Lomé and Conakry (Agnew 2018). This was beneficial for the briber too in many respects, not just to secure lucrative business contracts. In Germany, for example, the tax office classified bribes as so-called ‘useful expenses’ up to 1997. They could therefore be deducted from taxable income as business expenses. The only precondition was that the recipient abroad was named. Most industrialised nations had similar regulations (OECD 2011). The trend to treat bribes to foreign officials ever since as illegal does not necessarily mean that grand corruption has been limited.
Besides, even African ethnic patronage relations are neither primordial nor divisive but instead continually adapt themselves to modern requirements (Meagher 2006). Seemingly static cultural factors, such as custom, tradition, religion or ethnicity, have been reinvented or adapted to changing requirements of societies. Therefore, it would be misleading to put the blame for a lack of development in Africa on the cultural heritage, as supposedly incorporated in ‘traditional African institutions’, which are frequently considered in a simplistic and deterministic manner as a customary barrier to democratisation or economic growth. In addition, there exist significant structural differences not only between cultures of innovation in the formal and informal sectors, but also within the informal sector, depending on its social structure. Both differences have serious repercussions as regards the developmental trajectory. Last, but not least, the fault lines between the formal and the informal become increasingly blurred in various ways by globalisation. This has been demonstrated with respect to different standards for culturally induced innovations between the so-called ‘useful’ and ‘useless’ development regions by Ferguson (2006, 380), who took ‘governance’ and investment criteria concerning strategic investments of oil multinationals as examples. The enclaves of the ‘useful’ Africa are now delimited not by national frontiers or the divide between the formal and informal, but by boundaries of transnational economic and social spaces. The chains of transnational enclaves of ‘useful Africa’, e.g. of oil fields exploited by oil multinationals in West Africa (often backed by powerful hidden national interests), apparently function according to rules and ethics beyond the official discourse on governance or on codes of conduct of international development cooperation. The poor in these regions are regularly excluded from the ‘useful Africa’, as shown by the example of the Niger Delta. They have to obey special laws which result in their exclusion and marginalisation within the context of globalised capitalism.
Obstructing African agency: the example of the Ajaokuta Steel Mill project, Nigeria
The Ajaokuta Steel Mill project is the second largest steel mill in Africa, and the twelfth largest in the world. However, at the same time it is one of the most notorious ‘white elephants’ in Africa (SaharaReporters 2018; Faboyede 2015). Construction started in 1979 under a cooperation agreement with the former Soviet Union on 24,000 hectares in Ajaokuta, Kogi State, Central Nigeria. The project has four different types of rolling mill inside the plant to produce different steel products. Its coke oven and by-product plants, allegedly 98% complete in 1994, 40 or 43 plants, were bigger than all similar plants in Nigeria combined. In order to supply the mill with iron ore and connect it with the world market, Nigeria's first standard-gauge railway was built from the iron mines at Itakpe to the steel mill at Ajaokuta and continuing to the Atlantic Ocean at Warri. The railway was nearly completed too, but part of it was vandalised in the meantime (Wikipedia n.d.a).
Ajaokuta would have had the capacity to become one of the major African producers of industrial machineries, auto-electrical spare parts, shipbuilding, railways and carriages, as well as the biggest African supplier, not just for neighbouring African markets. In the first phase of its development the plant would have provided direct employment for 10,000 workers and a further 500,000 workers up- and downstream if in operation. When, after several failed attempts at privatisation, the Nigerian government took back control in 2016, it had spent an estimated US$10 billion over 34 years on the project. However, to date not a single sheet of iron has been produced because of gross mismanagement, fraud and vandalisation of the plant in the course of failed privatisation efforts (Faboyede 2015). About another US$1.5 billion would be necessary to complete the remaining 2% of the plant (Oluyole 2017; Wikipedia n.d.a). That is, US$625 million to complete the steel company and another US$800 million to provide the external infrastructure for the complex, including railway, to make it operational (News Agency of Nigeria 2018; Adeolu 2018). Yet, apparently some ministers in the former Goodluck Jonathan’s administration as well as in that of the present incumbent Muhammadu Buhari were again trying to fraudulently acquire the Ajaokuta steel company for themselves, as was revealed in a detailed petition read at the House of Representatives in Abuja in March 2018 (SaharaReporters 2018).
Conclusion
African states still strive to cope with the legacy of the slave trade, colonialism and the subsequent struggle for political and economic independence in a crisis-prone continent. Decades of development aid and well-intentioned though not necessarily altruistic treaties to promote development by trade – like the aforementioned AGOA and the ACP–EU Cotonou Agreement, which runs out in 2020 – were steps in the right direction. Yet, they apparently had little effect to accelerate the development process in Africa up to now. The present move of the Trump administration to put ‘America first’ and to concentrate on the ‘real friends’ of the US seems to be a step backwards to the times of the Cold War: according to the maxim, if you’re not with us, you’re against us. In railing against countries that had ‘taken advantage’ of the United States – such as Germany, allegedly – Trump said:
We have some friends and some enemies where we have been tremendously taken advantage of over the years on trade and on military. … So we view trade and we view the military, and to a certain extent, they go hand in hand. (AFP 2018)
Nonetheless, African institutions are no passive agents who sit mesmerised like rabbits before the snake vis-à-vis any move by the US government. African agency matters, despite popular misconceptions about global players as agenda setters that still prevail, whereas Africans are considered as more or less helplessly overrun and outwitted. On the contrary, local agency and class policy are central determinants of socio-economic transformations. African agency from below can develop under certain conditions to social and economic change of revolutionary proportions as shown both by the ‘Arab Spring revolutions’ and the surprisingly successful role of civic agency in the EPA negotiations (Kohnert 2014). On the other hand, the closed shop of the ‘Messieurs Afrique’ in francophone Africa (Kohnert 2005) as well as an ‘agency as corruption’ (Taylor 2015), incarnated by the Nigerian example of decades of bad governance, both to the benefit of political and economic elites in Africa and overseas, still constitute an effective barrier to sustainable African development.