King Charles III and Queen Camilla view dancers at Fort Jesus the UNESCO World Heritage Site on November 03, 2023 in Mombasa, Kenya. Photo: Samir Hussein/WireImage/Getty Images.
By Claire Ayuma Amuhaya – May 21, 2024
Why hasn’t the Commonwealth abandoned its colonial nature?
The privatization of Africa’s state-owned companies is always linked to the US through its financial institutions, the World Bank and the IMF, with the introduction of Structural Adjustment Programs in the 1980s and 1990s.
However, the British were behind the exploitation, privatization, and eventual collapse of Africa’s state-owned companies even before the introduction of the so-called neo-liberal market agenda by the US. The British have been doing this mainly through their Commonwealth institutions, proudly headed by the monarch.
Not hereditary, but inherited
The Commonwealth organization claims that the role of its head is purely symbolic, that it has no maximum fixed term, it is not hereditary, and that future heads will be chosen by the Commonwealth leaders.
King Charles III succeeded Queen Elizabeth II as head of the Commonwealth upon her death on September 8, 2022. This was after the Commonwealth head of government (CHOGM) meeting in 2018 agreed that the next head would be Prince Charles. Some claimed he had overcome really tough competition to win Britain’s backing as the best candidate, but there is no evidence of anyone else contesting or even voicing aspirations.
The reality, however, is that the title of Commonwealth head forms part of the monarch’s full and inheritable title in each realm and letters patent issued. For example, Elizabeth II’s letters patent from 1958 clearly state that Prince Charles was the heir and successor of the Commonwealth territories.
Similarly, on February 13, 2023, King Charles III’s official letters patent state that the Prince William of Wales and his heirs and successors shall be the future heads of the Commonwealth. So, it’s not true that it is not hereditary, but why would the British, through its monarch, still want to head and control the Commonwealth?
Britain looking for food and raw materials
Use of the term neo-colonialism is internationally attributed to Alex Quaison-Sackey, a Ghanaian diplomat who addressed the General Assembly of the United Nations on April 5, 1958. It was popularized by Kwame Nkrumah in his book Neo-colonialism: The Last Stage of Imperialism in 1965.
Most people think neo-colonialism started after most colonies had gained independence. However, the British were the first to start implementing it with the creation of the British Commonwealth of Nations in 1931 on the basis of the 1926 Balfour declaration.
In 1945, Britain signed the Anglo-American financial and commercial agreement with the US. But when the country started experiencing raw materials and food shortages in 1947, coupled with the US loan burden, its Labor government decided to find their own non-dollar sources of raw materials and food. Unfortunately, instead of looking inward, they looked at their colonies as their non-dollar source.
This led to the Overseas Resources Development Act of 1948, which was enacted by the King George VI, and the establishment of the Colonial Development Corporation, which was “charged with duties for securing development in colonial territories.” It also led to the Overseas Food Corporation, which was “charged with duties for securing the production or processing of foodstuffs or other products in places outside the United Kingdom, and the marketing thereof, and for matters connected therewith.”
After many colonies had gained independence, in 1963, the Colonial Development Corporation was renamed the Commonwealth Development Corporation (CDC) and, in 1969, it was permitted to invest outside the Commonwealth.
Nicholas Mansergh wrote in his book The Commonwealth Experience Volume One: The Durham Report to the Anglo-Irish Treaty (1982): “Commonwealth was the heir of Empire, and imperial influences bore closely upon its earlier growth.” So, how does the Commonwealth, through its institutions such as the CDC, ensure that British imperialistic nature is maintained, albeit not directly as it was during colonialism?
Commonwealth Development Corporation: Aid agency or cash machine?
It is stated clearly in the Act leading to the establishment of the Colonial Development Corporation that it was charged with securing development in colonial territories. While the main purpose of the Commonwealth Development Corporation (the renamed Colonial Development Corporation) in 1963 was “to invest in the creation and growth of viable private businesses in poorer developing countries to contribute to economic growth for the benefit of the poor; and to mobilise private investment in these markets both directly and by demonstrating profitable investments as part of the mission… to fight world poverty.”
More succinctly, the CEO of the CDC between 2004 and 2011, Richard Laing, said the “CDC exists to improve people’s lives in developing countries.”
However, the CDC had never led to industrial development, nor did it improve people’s lives in developing countries, because the aid supposedly given to their colonies (and/or their former colonies) had never been directed to Africa-owned companies, nor were the profits or even tax revenues ever directed to Africans. This was confirmed during a UK Parliament hearing in 2010, which led to the CDC’s reformation. The main conclusions of the investigations were that the CDC’s projects had “a focus on profitability to the detriment of development; depriving developing counties of much needed tax revenue; lack of analysis of development impacts and an ongoing failure of oversight and standards, transparency and accountability.”
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How did they do it? First, the CDC aid was directed towards already established British companies, like The London and Rhodesian Mining & Land Co Ltd (Lonrho), which was incorporated in 1909 with a founding capital raised by seven British shareholders who began mining and agricultural businesses in Rhodesia (modern day Zimbabwe). In 1961, the company recruited the famous British neo-colonial agent Tiny Rowland, who expanded its interests out of Rhodesia into neighboring Malawi, Zambia, Kenya, Zaire (DRC), and Tanzania, transforming the entity into an African conglomerate without rival.
The Africans were mainly employed as manual laborers with poor pay, while the foreign personnel performed the highly paid and prestigious engineering and technical functions. These companies just pulled resources out of the ground and sold them abroad. Little capital development was devoted to actually increasing the stock of productive wealth and this, in turn, deprived developing countries of much-needed tax revenue.
Secondly, the CDC was (is) actually behind the collapse, sale and eventual privatization of Africa’s state-owned companies. These include Nigeria’s National Fertilizer Corporation of Nigeria (NAFCON), which was privatized through corrupt deals that only enriched a few individuals. And how was the CDC involved? The CDC was one of the main investors in a private equity firm known as Emerging Capital Partners (ECP), which managed the ECP Africa Fund II.
Through the ECP Africa Fund II, ECP invested in three Nigerian companies: Oando, NOTORE (formerly state-owned NAFCON) and Intercontinental Bank. The bank is reported to have been used for the laundering of money said to have been obtained corruptly by the former governor of Nigeria’s oil-rich Delta State, James Ibori.
According to Nigerian anti-corruption campaigner Dotun Oloko, the whistleblower in the Emerging Capital Partners case, Ibori used a front company (NOTORE) to acquire the assets of the privatized National Fertilizer Corporation of Nigeria (NAFCON), and one of the CDC’s directors was acting as Ibori’s front man during these transactions.
Plunder continues
In 1997, the CDC became a Public Private Partnership (PPP). Then, in 1998, it transformed from a statutory corporation to a public limited company trading under the name CDC Capital Partners. In 2004, following further restructuring, two separate fund management companies were formed from CDC, ACTIS and AUREOS, leaving CDC Group plc as an emerging markets fund-of-funds investment company owned entirely by the government.
The CDC’s new role as a fund-of-funds investor meant that it was no longer a direct investor in companies in emerging markets. Instead, they now deployed their “capital through private equity funds, such as those managed by ACTIS and AUREOS, which in turn invest in companies in developing countries. These private equity funds thereby provide CDC with an indirect share in the businesses in which the fund manager invests.”
Unfortunately, the structure for resource exploitation and non-dollar supply of food and raw materials remains to this day, because in November 2021, the Foreign, Commonwealth and Development Office (FCDO) announced that it would rebrand instead of disbanding the CDC as the British International Investment (BII) in 2022 as part of a strategy to deepen economic, security and development ties globally.
So BII is now working behind the scenes through one of its funding managements companies, such as ACTIS, to continue plundering African resources. The best example is the privatization of Cameroon’s electricity sector, which BII advertises as one of its impactful projects in Africa but in fact the investment goes to its own company and not to Africa’s state-owned firms.
SONEL case
In 2001, during the structural adjustment program, the state-owned Cameroonian electricity company SONEL was sold by the government to the US-based firm AES Corporation and renamed AES SONEL.
In 2014, AES sold its stake in AES SONEL and its subsidiaries Kribi Power Development Company (KPDC) and Dibamba Power Development Company (DPDC) to ACTIS. The company was renamed ENEO.
In September 2015, ACTIS sold its shares in KPDC and DPDC to a consortium comprised of the state-owned Norwegian Investment Fund for Developing Countries, Norfund, and the state-owned British development finance institution, Commonwealth Development Corporation (CDC Group). Norfund and BII (formerly the CDC) together are referred to as Globeleq – the majority shareholders of KPDC and DPDC.
In 2023, ACTIS announced that it was seeking to exit its investment in Energy of Cameroon and ENEO is currently grappling with liquidity problems as the investor ACTIS prepares to exit.
This showcases how the British, through its institutions, ensures that Africa never prospers. First, it privatizes state-owned companies, sometimes though corrupt deals or individuals, collapses them, and finally claims the need to exit after rendering the companies useless.
So, the CDC ensured the smooth transfer from colonial schemes of African natural resources exploitation by the British to the 21st century schemes that see the exploitation and collapse of Africa’s state-owned companies through its now rebranded institution, the British International Investment (BII).
Claire Ayuma Amuhaya, a senior lecturer at the Department of Theory and History of International Relations, research fellow at the Center for Applied Analysis of International Transformations, Patrice Lumumba Peoples’ Friendship University of Russia; lecturer at the Higher School of Economics, Moscow; and lecturer at Riara University, Nairobi.
(RT)
