B – Economy, trade, and finances

History of state enterprises in African states after Independence

Event Details

  • Date

    Thursday, 25 June - 13:00 – 15:00

    Thursday, 25 June - 15:30 – 17:30

  • Venue
    tba
  • Theme
    B – Economy, trade, and finances
Convenor
  • Marie Huber (Humboldt University of Berlin)
  • Alexander Keese (University of Geneva)
Chair
  • Alexander Keese (University of Geneva)
  • Marie Huber (Humboldt University of Berlin)
Commentator
  • Alexander Keese (University of Geneva)
Panelists
  • Marie Huber (Humboldt University of Berlin)
  • Sarah Kunkel (Université de Gèneve)
  • Grietje Verhoef (University of Johannesburg, Department of Accountancy)
  • Luca Puddu (Università Sapienza)
  • Mariusz Lukasiewicz (Leipzig University, Institute of African Studies)

Papers

  • Sarah Kunkel
    Farming and Nation-Building: Nkrumah's State Farms and Decolonisation

    Farming and Nation-Building: Nkrumah's State Farms and Decolonisation

    After independence was achieved in 1957, Nkrumah focused on developing an economically strong nation. Whereas industrial development has received greater attention from researchers, agricultural development has been rather overlooked. The establishment of state farms in 1962 brought economic development to rural areas and offered technical and skilled employment on a larger scale than previously. Much more than this, Nkrumah was able to connect politically to rural populations. State farms were symbols of modernisation and development beyond the urban and industrial centres of the South, and channels through which Nkrumah was able to promote nation-building and socialism.
  • Marie Huber
    The Multinational Airline «Air Afrique»

    The Multinational Airline «Air Afrique»

    The multinational airline Air Afrique, founded by 11 francophone West-African states 1961 in Yaoundé, was considered an “independence gift” from France to her former colonies. The founding actors believed that in order to strengthen the economic power of each country, the region as a whole needed to be developed. In terms of international connectivity, experts diagnosed that only by joining the air space rights of all 11 states, and through a joint management, the necessary targets for air transport could be met. While the first two decades saw growing business and investments, the day-to-day managment of the company was facing powerful structural constraints and dependencies, such as the political and economical framework of Francafrique and international air traffic regulation. In 2002, the company declared bankruptcy and was liquidated. Air Afrique is a particularly suited example, due to its multifaceted history and extraordinary characteristics to exploring the rationale of a multinational approach to economic development and the role of a state-owned corporation in African state economies post-independence. In my paper, I will explain how we can better understand the African economic regionalism and internationalism of the 1960s through the case study of Air Afrique.
  • Grietje Verhoef
    State-owned enterprise: Africa’s market, the state and economic performance in the post-independence era

    State-owned enterprise: Africa’s market, the state and economic performance in the post-independence era

    State Owned Enterprises (SOEs) lost their primacy in Europe since the 1970s. Sustained weak performance of African SOEs since the post-independence era of the 1960s, resulted in a wave of privatisation. In twenty-first century Africa SOEs remained fundamental instruments of public policy. Twenty-first century revival of African SOEs, brought about tension in the market between the state and private enterprise. The growing private corporate sector in Africa, impacted on SOE performance. In some cases the state adopted management practices aligned to private enterprise, to strengthen public enterprise. The UNCTAD list of top non-financial conglomerates in the developing world, included two African SOEs in 2017. Fundamental market constraints hampered both private and public enterprise development. The discourse on people’s power, state assets and business development in the millennium development goals (MDGs), introduced a new approach of public-private partnerships (PPPs). Market and policy constraints forged new policy options for the retention of SOEs in Africa. This paper will contextualise the current state of SOE operations in Africa against the backdrop of more liberal market economic policies introduced since the early twenty-first century.
  • Luca Puddu
    The trajectory of government banking in Imperial Ethiopia.

    The trajectory of government banking in Imperial Ethiopia.

    The history of banking in twentieth century Ethiopia is strictly associated to the competition between Ethiopian rulers and international powers for control of the country’s foreign exchange earnings and internal nodes of capital accumulation. After liberation from Italian rule, the re-establishment of the State Bank of Ethiopia and the creation of state-owned development banks under the umbrella of the World Bank assistance marked the attempt to enforce government control over local patterns of economic development and the process of integration into the global economy, sanctioning the gradual emancipation of the Ethiopian financial sector from British influence. This paper investigates the political economy of the State Bank of Ethiopia and associated development banks in the decade of the 1940s and 1950s. Methodologically, it is based on documents and business records collected in private and public archives in Addis Ababa, London, Rome, and Washington DC. Archival sources highlight that government-owned financial institutes became an arena of confrontation between different visions of economic development and state-society relations within the Ethiopian polity: on the one hand, those who advocated liberalization and the opening of the country to foreign investments; on the other side, the supporters of state-led development and government control over the sectorial allocation and geographical distribution of capital flows. The early trajectory of state banks also had crucial implications for Ethiopia’s insertion into the new world order. Foreign technical assistance to Ethiopian banks provided an entry point to American officials to address the transition of the country from the sterling to the dollar area, paving the way to the establishment of American hegemony in Imperial Ethiopia.
  • Mariusz Lukasiewicz
    From decolonisation to financial globalisation: Towards a modern history of Stock Exchanges in Africa, 1960-1994

    From decolonisation to financial globalisation: Towards a modern history of Stock Exchanges in Africa, 1960-1994

    Historically the African continent has attracted far less financial capital than other parts of the world in relative and absolute perspective. In year 1960 when 17 sub-Saharan African countries gained their independence from European colonial powers, Africa attracted less than 2% of global capital investments. Given the relative scarcity of capital and the small volume of savings in most African economies at independence, the establishment of stock exchanges in Africa and their regulation in the post-independence and post-colonial period showed that a number of countries considered them as strategic financial intermediaries for channeling capital to their national, and even regional, economies. The drive towards establishing regulated stock exchanges on the African continent is significantly liked to Africa´s financial globalization and a general liberalisation of financial investments in developing economies around the world. Although African markets are still fairly illiquid and relatively narrow in the scope of financial products they offer, stock exchanges in Africa have proved to be some of the best performing and lucrative on the planet. There are currently 23 African exchanges spanning the continent of 54 different countries. With the notable exception of the Johannesburg Stock Exchange, stock exchanges in Africa are still the smallest out of any global region in terms of the number of companies listed, market capitalisation and the turnover in stock trade. Yet, and more significantly for Africa’s post-colonial economic and political development, the establishment of stock exchanges in economies as diverse as Nigeria, Kenya and Tunisia begs the question of why African governments undertook ambitious institutional projects to expose their fragile economies to the volatility of global financial capitalism. This exploratory paper sets out the framework for a larger research project tracing the historical development of stock exchanges on the African continent in the post-independence period with special reference to financialization globalization. The overall aim of this preliminary investigation is to evaluate the role and function of stock exchanges in Africa in the period between Nigeria’s independence from British colonial rule in 1960 and South Africa’s first democratic elections in 1994. The episodes of economic growth in the 1960s and 70s eventually led to the “lost Development Decade” in most African economies, in large part due to external energy and currency constraints that increased inefficiencies, bringing growth and investments to a halt. The historical analysis of eight different stock exchanges from eight very different economies in Africa in the post-independence period asks and answers these questions: Was it African agency or colonial legacies that prompted the establishment or continued development of stock markets on the continent? Were stock exchanges over-ambitious projects with no short-term economic utility? Did stock exchanges promote or discourage regional economic cooperation? The paper ultimately suggests that the development of stock exchanges in Africa during the post-independence period needs to be viewed as a conscious African-led initiative to integrate the continent’s economies into the global capital market and position them for capital-intensive growth.

Abstract

The postcolonial economic politics of African states were dominated by development planning, aimed at overcoming deficiencies and to pave way for the economic take-off. While plenty is known about the planning processes in so far as the involvement of international donor organisations and the entangled history of development aid and foreign politics are concerned, our knowledge of domestic economies of African states during that period is still scarce. In recent years, the relevance of business records of both state- and privately-owned enterprises, has been demonstrated in several historical and anthropological research works. Yet, in particular a more in depth look into state-enterprises is still missing from this debate. Often created as devices to stimulate development on the one hand and to protect vital sectors from foreign profit interests on the other hand, their history presents, in our view, an entry point to a better understanding of the relationship between development planning economics, the state-building processes and the transformation of societies in the newly independent African states. This first issue links to a second, having to do with a new elite of employees. They have occasionally been addressed within older debates on “working class” issues and Africa and notably (e.g. for Zambia) in the discussion about new “labour aristocracies”. These issues have so far remained highly theoretical – but in new research, the experience of employees of state enterprises leads to a fresh approach in social history. This includes the internationalisation of national sentiment, and the goal to take part in societal modernisation as it was defined by development planners in the African societies. Only from the mid-1970s – and with a stronger impact in the 1980s – the increasing decline of state-enterprises in the vast majority of African countries led to growing disappointment and frustration of the employees of these sectors, who had to struggle with much-delayed salaries and growing misery. We invite papers contributing to this nascent field of a historiography of African state-enterprises, either through case studies or by addressing methodological questions, for example on how to integrate economic with historical analysis.