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3 Urbanization, globalization, and economic crisis in Africa

David Simon

Abstract

Ce chapitre examine, dans le contexte d'une mondialisation accélérée, les différentes facettes des relations entre urbanisation et situation économique. Il faut absolument démonter les notions simplistes concernant la mondialisation, surtout parce que d'apparentes similitudes de formes ne se traduisent pas forcément par des similitudes de même ordre dans les formes et processus sous-jacents. C'est pourquoi la situation et le rôle des villes africaines dans le contexte de l'économie mondiale sont mis en rapport avec la situation contemporaine dans les autres régions du monde. Les liens le plus souvent ténus de ces villes avec le reste du monde et le rôle périphérique qu'elles y jouent sont en relation directe avec la marginalisation croissante de l'Afrique. Les implications de ce constat sont ensuite examinées en termes de relations entre les tendances de l'urbanisation et la situation socio-économique prévalante. Malgré l'insuffisance des données et les dangers de généralisation, il semblerait bien que le rythme de l'urbanisation se soit quelque peu ralenti depuis la fin des années 80 et le début des années 90 du fait de l'aggravation de la crise économique, de l'augmentation des coûts et de la difficulté de la vie dans les grandes villes d'Afrique. Mais ces relations sont complexes et ne sont pas toujours absolument cohérentes ni prévisibles. Examinant la qualité de la vie urbaine, la dernière partie du chapitre illustre les différenciations socio-économiques et l'ampleur de la pauvreté et de l'insuffisance des infrastructures dans de nombreuses villes. Quoiqu'en termes absolus il y ait peu de véritables mégapoles en Afrique, les problèmes des grandes zones urbaines du continent sont, d'un point de vue relatif, aussi graves qu'ailleurs.

Introduction: Globalization, identity, and difference

Over the past millenium, Africa's peoples and cultures have been subject to dramatic external interventions and influences enmeshing them firmly within the emerging world system. The successive conquests, colonizations, and associated cultural imperialisms of Arab and European, Islam and Christianity, the haemorrhaging of literally millions of Africans constituted by the slave trade, and more recently the rapid modernization and spread of capitalist consumerism have all transformed and internationalized cultures, conceptualizations, and commodities. This increasingly powerful process of convergence has captured the popular imagination to the extent that "globalization" is as much a subject of media interest as of academic enquiry.

Yet convergence and globalization are not all-embracing, unidirectional, and homogenizing processes, as Robertson (1991, 1992) has claimed. Rather, their impact varies greatly in extent and intensity over time, across space, and within and between cultures and social classes. Moreover, counter-movements, both conscious and unpremeditated, are occurring simultaneously. Divergence, economic and social counter-penetration, the emergence of new syncretic forms of social and material culture, including deviance (that ultimate social construct for non-conformity), are constantly emerging. Furthermore, as discussed in greater detail below, globalized consumerism and industrial production for global markets often occur to very different extents in particular regions. Africa is a classic case in point: its increasing marginalization within the world economy reflects, as pointed out in chapter 2, the paucity of inward foreign direct investment and exports of secondary or tertiary output. The continent's exports remain overwhelmingly primary commodities, while a high proportion of manufactured goods are still imported or produced purely for the local market.

"Globalization," except in a superficial, journalistic sense, therefore has little meaning and analytical utility in general terms. It is precisely the kind of totalizing or universalizing construct being called into question by postmodern modes of social enquiry. As the contributions in King (1991) reveal clearly, globalization even has very different meanings in the cultural arena for various academic disciplines.

More specifically, too, we need to highlight the difference between form and content or substance. The term "Coca Cola culture" illustrates this extremely well. Facilitated by increasing transnationalization and global organization of production in an array of manufacturing industries and categories of services such as finance and telecommunications, together with high-profile advertising, it has acquired widespread international currency as a symbol of a supposedly healthy, carefree, recreationally oriented, middle-class and consumerist lifestyle. Until comparatively recently, the use of European models and actors in worldwide advertising promoted images and constructions of Western material sophistication and the desirability of such lifestyles. However, in poorer regions, not least Africa, the demonstration effect was constrained by the unattainability of any aspirations that might have been stimulated in the majority of the population. Increasingly also, nationalist sentiment, resentment at the perpetuation of images of (implied) European superiority, and the reassertion of indigenous values and roles - albeit in an overtly modernizing context - led to increasing use of indigenous models and actors. This change - crafty, subtle, or driven by necessity according to one's perspective - served the dual purpose of assuaging such hostile ("unhelpful") sentiments and simultaneously conveying new images of local acceptability, desirability, and wider attainability. The demonstration effect of elite Westernized lifestyles and consumerism was thus enhanced for the growing middle classes and also the poor, especially in urban areas. Coca Cola and similar brand names are no longer the sole preserve of urban affluence but are readily obtainable and widely consumed even in remote villages across rural Africa. They are disproportionately expensive in relation to average money incomes, and are nutritionally of little value. Particularly for the poor, the high opportunity cost and potential dietary and health consequences count for little in relation to the real or imagined prestige acquired.

What has this apparent evidence for globalized consumption patterns got to do with form versus content or substance? Simply this. Although Coke, McDonald's, and even Toyotas in varying states of decrepitude are now common commodities from Greenland to Mount Kilimanjaro, and are having an impact on lifestyles, we cannot assume that this is necessarily evidence of social and cultural convergence in a unidirectional, linear sense with a predetermined or universally predictable outcome. Adoption may lead to adaptation and innovation, to different forms of diversity rather than to global homogenization. This process can also be contradictory with respect to different commodities, cultural forms, and identities. This should hardly be surprising, given that such ambiguities and contrasts are commonly evident in the character of individual people, despite the misplaced assumptions of (economic) rationality and consistency of behaviour in still-influential paradigms ranging from modernization to Marxism. Much recent anthropological and social psychological research into identity, difference, and senses of self has highlighted people's multiple - and often contradictory - identities arising from domestic and non-domestic roles, as well as differential identification with a number of relevant socially or territorially defined groups and contexts. As I have argued previously,

Moreover, changes and the identities which emerge are inherently likely to overlap and perhaps even conflict. People can and do operate simultaneously in very different social, cultural and material environments, often also at different geographical scales. The most obvious examples are the national elites and bourgeoisies, which operate nationally and internationally in professional terms or for leisure purposes by means of the jumbo jet, (mobile) telephone, fax, laptop computer with modem, satellite dish, electronic bank transfer, credit card and a lingua franca like English or French, while often still retaining an active role in indigenous traditions and activities. They often own or even work part-time on rural plots or shambas, which may be home to parents and other members of the extended family, quite possibly living and working in largely "traditional" ways and speaking only the local vernacular. (Simon, 1992, p. 102)

In the context of the theme of this chapter, the implications of the foregoing are important. We cannot assume that Africa, and in particular its large cities, are increasingly similar to other continental regions of the third world, simply because of evidence of global material culture and the physical appearance of central business districts or because, increasingly, the city centre pavements have become as much the preserve of the beggar as of the suited businessperson and civil servant. Our concern must be with underlying process rather than purely with external appearances. Processes of urban convergence and divergence have been documented in Africa (O'Connor, 1983; Simon, 1992), Latin America and Asia (Armstrong and McGee, 1985), and the Caribbean (Potter, 1993), but, although they have many comparable aspects, there are also significant regional and local differences. These reflect the intensity of integration into, and role(s) within, the changing international divisions of labour of any particular country or region. The European colonial impact was clearly of fundamental importance in this process and, especially in now peripheral regions where decolonization occurred only recently, as in most of Africa, the aftermath of this experience and the persistence of neo-colonial relations are still keenly felt (see chap. 2). Nevertheless, it would be unhelpful and deterministic merely to attribute the situation to external forces in a manner reminiscent of the dependistas. What we can assert, however, is that the nature of urbanization (strongly influenced by colonial policies as it was), and the relative extent and dimensions of wealth and poverty, indebtedness or prosperity are inextricably linked, and the rest of this chapter explores these interrelationships.

The positions and role of African cities in the world economy

It is now well established that Africa, and especially sub-Saharan Africa (SSA), has become the world's poorest continent, with per capita income levels in many countries now back roughly to what they were during the early 1960s. Food production increases have not kept pace with the average population growth of 3 per cent per annum, with the result that food imports have been rising by 10 per cent per annum since the 1980s. This situation cannot be more than partially attributed to the succession of droughts and famines experienced in the Sahel, Horn of Africa, and central-southern Africa. Because of their reliance on primary exports, as noted by Rakodi, African countries have suffered a longstanding deterioration in their terms of trade. For these as well as internal reasons, the debt crisis has increased, Structural Adjustment Programmes have had a profound effect, and absolute poverty has afflicted progressively more people in urban as well as rural areas. As discussed in greater detail in the next section of this chapter, the 1980s proved so disastrous in development terms that they have been dubbed "the Lost Decade." Most people elsewhere now associate the continent with images of starvation, war, refugees, and general human misery even more than with the traditional exotic "otherness" of graceful tribespeople and stunning environments, scenery, or wildlife. There have, however, been a few bright spots, perhaps most notably Botswana's buoyant mineral-led economic growth and social development, the end of apartheid rule in South Africa, and moves towards apparent democratization in countries across the continent.

Nevertheless, Africa has acquired the unwanted status of being the outer periphery of the world economy. Although there are certainly some attractive investment opportunities, particularly in the minerals sector and other forms of primary production, as discussed in chapter 2, there was sustained disinvestment from the continent during the 1980s. Africa now accounts for no more than 4-6 per cent of net global foreign direct investment (FDI) by most major Western transnational corporations (Bennell, 1990; Simon, 1992). As Bennell's work clearly shows,

The importance of Africa as a location of British overseas investment in global terms declined considerably since the mid-1970s. In fact, net industrial investment in Africa by UK companies has become relatively inconsequential, amounting to less than 0.5% of total industrial FDI in 1986 compared with around 4% in the mid 1970s... The percentage of total net earnings derived from African industrial investments has declined somewhat less - from 4.7% in 1978 to 3.4% in 1986 - but it will undoubtedly continue to fall in the future, given the already dramatic fall in the relative size of British net investments in Africa. For British industrial capital as a whole, therefore, Africa is now of minor interest. (Bennell, 1990, p. 159)

Moreover, the most recent data available show that Africa's share of total new global FDI averaged 13 per cent for 1981-1985 but fell to 11 per cent for 1986-1990, despite the implementation of structural adjustment and economic recovery programmes (UNCTAD, 1994). In 1991, investment inflows totalled US$2.5bn, a 21 per cent increase over 1990 but still below the 1985-1990 average of $2.7bn. The bulk of this FDI went to oil-exporting countries, although a marked increase to Morocco helped raise the proportion attracted by non-oil exporters to 28 per cent for the 1989-1991 period, compared with only 20 per cent for 1986-1988. With the exception of South Africa, investment outflows from Africa were negligible during 1991 (UNCTAD, 1993).

Unfortunately, the one recent attempt (of which I am aware) to address the relationship between FDI and urbanization in developing countries is unhelpful, relying on very dated literature and data, failing to mention Africa at all, and throwing little new light on the relationships (Sit, 1993). In the past few years, some signs of industrial and especially manufacturing recovery in Africa have emerged (table 3.1). The picture remains mixed, however, with countries such as Benin, Côte d'Ivoire, Cameroon, Libya, and Mali showing a continued deterioration. Given the continuing political uncertainty and instability in many countries, coupled with the overall economic climate, especially in relation to the far higher rates of return in Pacific Asia, parts of Latin America, and central Europe, there can be little realistic prospect of a substantial increase in FDI in the foreseeable future. In any case, only a comparatively small percentage of this would be attracted to the major cities for key infrastructural and prestige developments and the opening of offices by foreign investors, given the predominance of resource-based production across the continent and the concentration of FDI in agriculture, mineral exploitation, and infrastructure (Simon 1992, p. 49). This spread is, in turn, hardly surprising in view of Bennell's (1990, p. 167) data, which show that rates of return on non-industrial FDI by British firms in anglophone Africa (outside South Africa and Namibia) were nearly double those on industrial investment between 1978 and 1984.

Table 3.1 Growth of manufacturing value added at constant 1980 prices, 1975-1985 and 1985-1990 (selected countries)

Source: UNIDO (1993), table 3.3.

a. The countries listed have been selected to highlight the range of performances as well as of changes in growth rates of MVA between the two periods. Data on South Africa are not given in the original source.

Despite the central importance of agriculture and mineral exploitation (especially to exports), South Africa has important urban industrial complexes, making it the principal exception to Africa's heavy primary sector dominance. Yet, even here, full data on FDI are not published - probably because of its political sensitivity until early 1994. From the evidence that a recent study managed to assemble for the period from the final quarter of 1989 to the second quarter of 1993 (Garner, 1993), it is not possible to say with any degree of accuracy what proportion would have accrued directly to the principal urban areas. However, the sectoral breakdown suggests that it was actually very high, since 21 per cent of inward investments were in the motor industry, 21 per cent in electronics, 11 per cent in chemicals, 9 per cent in building, over 5 per cent in pharmaceuticals, and 4 per cent in engineering, all of which have high urban concentrations. How representative these data are of total FDI in South Africa, or of other time-periods, is not clear.

One characteristically urban-based form of economic activity is the business and personal service sector, and it has been the most rapidly growing element of African economies of late. However, although several countries, including Kenya, Zimbabwe, Botswana, and Namibia, have recently established stock exchanges, most of the continent's 14 active stock markets still trade almost exclusively in local stock. More generally, capital markets also remain very limited. South Africa is the principal exception, because the long-established Johannesburg Stock Exchange is well established in the top international league. This is evident in the difference between its market capitalization and that of Cairo, its nearest rival (table 3.2).

Other dimensions of Africa's peripherality are illustrated by the level of foreign diplomatic representation, and the location of headquarters and secretariats of international organizations. These are closely related, since foreign missions located in the strategic cities commonly have accreditation in several adjacent countries of lesser importance. Overall, the number of embassies, high commissions, and consulates in African capitals is smaller than in politically and economically powerful regions. Nevertheless, the relative numbers within Africa provide a good indication of external perceptions of the importance of individual cities and countries. Small, peripheral states such as Lesotho (9), Guinea-Bissau (17), and Malawi (19) have tiny diplomatic communities. Most African states have between 30 and 45 foreign legations. Atop the list are Ethiopia (70), Kenya (72), Nigeria (82), and Egypt (109) (Europa, 1992). Although South Africa had only 44 in 1992, these had the largest staff complements in Africa of many Western countries on account of the large white population of European origin and the strength of economic ties. Moreover, the number of embassies has risen dramatically since then, with the end of apartheid and South Africa's full re-admission to the international community.

Table 3.2 Africa's active stock markets, March 1994

Source: Kencom Digest 12(3), July 1994, Kenya Commercial Bank, Nairobi.

a. P/E = price to earnings ratio.
b. Data for December 1993.

Addis Ababa owes its standing primarily to the location there of the Organization of African Unity, the UN Economic Commission for Africa, and several associated organizations. Nairobi benefits from hosting the UN Environment Programme (UNEP), the UN Centre for Human Settlements (UNCHS), and numerous satellite intergovernmental and non-governmental organizations, as well as being the economic hub of East Africa. Lagos is the ax-capital of Africa's most populous country, which has considerable oil resources and experienced dramatic economic growth during the 1970s (see chap. 6). Cairo, an ancient city, remains in effect the headquarters of the Arab world, as the seat of the Arab League and related bodies, and also serves as a gateway between Africa, the Middle East, and Europe (see chap. 4).

Table 3.3 shows the extent to which major African cities host the headquarters of international organizations of various types. This provides another good indication of the strength of insertion into global networks of contacts, communications, and leverage. Although the principal cities come out well in aggregate terms relative to the hubs of other world regions of the South, when principal secretariats of global membership organizations are considered separately (Category A), African cities are very poorly represented. In the main, therefore, they host regional or continental secretariats of global bodies, and the headquarters of African organizations. This again reflects peripherality. It is interesting but unsurprising that there was little change in the position of African cities relative to other regions from 1990 to 1993, although all the African cities increased their total number of secretariats (cf. Simon, 1992, 1993). Such increases were not recorded in any other region. It is also noteworthy that Cairo and Nairobi, now hosting the largest numbers of secretariats in Africa, registered the most significant increases. Moreover, the Nairobi data omit the headquarters of the UNEP and UNCHS, both global membership organizations, an important anomaly probably explicable in terms of note (b) to table 3.3. The table also shows the extent to which Europe and North America remain the primary fulcrums of decision-making power in these terms.

Although, to the best of my knowledge, such an investigation has not been done, I believe that research into the extent of core metropolitan dominance over African cities in terms of international bank corporate structures and representation would reveal findings very similar to those of Meyer (1986) in respect of Latin America. If anything, the dominance-dependence links would be clearer and more concentrated, given the relative lack of economic dynamism on the continent and the strong recent colonial roles of Britain, France, and (to a lesser extent in continental terms) Portugal. Examining patterns of control within the world system of cities, Meyer found - unsurprisingly - that a clear hierarchy emerged, with core metropolises dominating Latin American cities. Moreover, the dominance by the leading core metropolises was more intense than that by second-level metropolises in the core. In 1980/81, 53 and 25 per cent of the international banks with offices in Latin America had their headquarters in European and North American metropolises, respectively. Given the centrality of international financial institutions, both corporate and intergovernmental, to global circuits of capital in these days of flexible accumulation and instantaneous international electronic transactions, such findings are very important. Moreover, unlike other activities of transnational corporations in Africa, such banking functions are specifically urban in location.

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