Scholars such as
the economist William Easterly, for example, have argued that even now, the
effects of the African slave trade can be measured on the continent, with areas
that experienced intensive slaving still showing greater instability, a lack of
social trust, and lower growth. Others observers have focused on different
external factors, such as the support that powerful countries offered corrupt
African dictatorships during the Cold War and the structural-adjustment policies
imposed by Western-led institutions in the 1980s—which, some argue, favored
disinvestment in national education, health care, and other vital
services.
At other times, a consensus has formed around
arguments that pin the blame on poor African leadership in the decades since
most of the continent achieved independence in the 1960s. According to this
view, the outside world has been generous to Africa, providing substantial aid
in recent decades, leaving no excuse for the continent’s debility. There’s
little wrong with African countries that an end to the corruption and thievery
of their leaders wouldn’t fix, voices from this camp say. Western media coverage
of Africa has tended to provide fodder for that argument, highlighting the
shortcomings and excesses of the region’s leaders while saying little about the
influence of powerful international institutions and corporations. It’s easy to
understand why: Africa’s supply of incompetent or colorful villains has been so
plentiful over the years, and reading about them is perversely comforting for
many Westerners who, like audiences everywhere, would rather not dwell on their
own complicity in the world’s problems.
Reading about African
villains is perversely comforting for many Westerners who, like audiences
everywhere, would rather not dwell on their own complicity in the world’s
problems.
One of the many strengths of Tom Burgis’ The Looting
Machine is the way it avoids falling firmly into either camp in this
long-running debate. Burgis, who writes about Africa for the Financial Times,
brings the tools of an investigative reporter and the sensibility of a foreign
correspondent to his story, narrating scenes of graft in the swamps of Nigeria’s
oil-producing coastal delta region and in the lush mining country of the eastern
Democratic Republic of the Congo, while also sniffing out corruption in the
lobbies of Hong Kong skyscrapers, where shell corporations engineer murky deals
that earn huge sums of money for a host of shady international players. Although
Burgis’ emphasis is ultimately on Africa’s exploitation by outsiders, he never
loses sight of local culprits.
GIMME THE
LOOT
Sure signs that Burgis is no knee-jerk apologist for
African elites arrive early in the book, beginning with his fascinating and
lengthy account of “the Futungo,” a shadowy clique of Angolan insiders who he
claims control their country’s immense oil wealth, personally profiting from it
and also using it to keep a repressive ruling regime in power. The country’s
leader, José Eduardo dos Santos, has been president since 1979, and in 2013,
Forbes magazine identified his daughter, Isabel, as Africa’s first female
billionaire. “When the International Monetary Fund [IMF] examined Angola’s
national accounts in 2011,” Burgis writes, it found that between 2007 and 2010,
“$32 billion had gone missing, a sum greater than the gross domestic product of
each of forty-three African countries and equivalent to one in every four
dollars that the Angolan economy generates annually.” Meanwhile, according to
Burgis, even though the country is at peace, in 2013 the Angolan government
spent 18 percent of its budget on the Futungo-dominated military and police
forces that prop up dos Santos’ rule—almost 40 percent more than it spends on
health and education combined. 
Those who tend to
blame Africa’s woes on elite thievery seize on such examples with relish. But
Burgis tells a much fuller story. Angola’s leaders may seem more clever and
perhaps possess more agency than other African regimes—and indeed, other African
states seem to be eagerly adopting the Angolan model. But the regime relies on
the complicity of a number of actors in the international system—and the willful
ignorance of many others—to facilitate the dispossession of the Angolan people:
Western governments, which remain largely mute about governance in Angola; major
banks; big oil companies; weapons dealers; and even the IMF. They provide the
political cover, the capital, and the technology necessary to extract oil from
the country’s rich offshore wells and have facilitated the concealment (and
overseas investment) of enormous sums of money on behalf of a small cabal of
Angolans and their foreign enablers. Because Angola’s primary resource, oil, is
deemed so important to the global economy, and because its production is so
lucrative for others, Angola is rarely pressed to account for how it uses its
profits, much less over questions of democracy or human rights. Burgis shows how
even the IMF, after uncovering the $32 billion theft, docilely reverted to its
role as a facilitator of the regime’s dubious economic
programs.
For those who insist that foreign aid to Africa
compensates for the role that rich countries, big businesses, and international
organizations play in plundering the continent’s resource wealth, Burgis has a
ready rejoinder. “In 2010,” he writes, “fuel and mineral exports from Africa
were worth $333 billion, more than seven times the value of the aid that went in
the opposite direction.” And African countries generally receive only a small
fraction of the value that their extractive industries produce, at least
relative to the sums that states in other parts of the world earn from their
resources. As Burgis reveals, that is because multilateral financial
institutions, led by the World Bank and its International Finance Corporation
(IFC), often put intense pressure on African countries to accept tiny royalties
on the sales of their natural resources, warning them that otherwise, they will
be labeled as “resource nationalists” and shunned by foreign investors. “The
result,” Burgis writes, “is like an inverted auction, in which poor countries
compete to sell the family silver at the lowest
price.”
Meanwhile, oil, gas, and mining giants employ crafty
tax-avoidance strategies, severely understating the value of their assets in
African countries and assigning the bulk of their income to subsidiaries in tax
havens such as Bermuda, the Cayman Islands, and the Marshall Islands. Some
Western governments tolerate and even defend such arrangements, which increase
the profits of Western companies and major multinational firms. But these tax
dodges further shrink the proceeds that African states earn from their
resources. According to Burgis, in Zambia, one of the world’s top copper
producers, major mining companies pay lower tax rates than the country’s poor
miners themselves. Partly as a result, he reports, in 2011, “only 2.4 percent of
the $10 billion of revenues from exports of Zambian copper accrued to the
government.” Ghana, a major gold producer, fared slightly better, with foreign
mining companies paying seven percent of the revenue they earned in taxes—still
a tiny amount, Burgis points out, “compared with the 45 to 65 percent that the
IMF estimates to be the global average effective tax rate in
mining.”
A RACE TO THE BOTTOM
African countries’
unequal relationships with powerful international financial organizations and
large multinational firms help explain the “resource curse” so frequently
lamented in discussions of the continent’s economies. Rather than issuing from
some mysterious invisible force, the curse is to a large degree the product of
greed and the disparities in leverage between rich and poor—and its effects are
undeniable. Burgis quotes a 2004 internal IFC review that found that between
1960 and 2000, “poor countries that were rich in natural resources grew two to
three times more slowly than those that were not.” Without exception, the IFC
found, “every country that borrowed from the World Bank did worse the more it
depended on extractive industries.”  
A case in
point is the arid, Sahelian country of Niger, which for decades has served as a
major supplier of uranium to France, its former colonial master. According to
Burgis, the French company Areva pays tiny royalties for Niger’s uranium—an
estimated 5.5 percent of its market value. And the details of the company’s
contracts with Niger’s government are not publicly disclosed. Reflecting on this
situation during an interview with Burgis, China’s ambassador to Niger adopts a
posture of moral outrage, proclaiming that Niger’s “direct receipts from uranium
are more or less equivalent to those from the export of
onions.”
Rather than issuing from some mysterious invisible
force, the "resource curse" is to a large degree the product of greed and the
disparities in leverage between rich and poor.
This is a telling
exchange, since many Africans believed that Chinese investment and influence on
the continent would offer a way to lift the resource curse. Many greeted the
arrival of the Chinese as big economic players in the region, which began in the
mid-1990s, with great enthusiasm—especially the leaders of states whose
economies depend heavily on minerals. China’s share of the global consumption of
refined metals rose from five percent in the early 1990s to 45 percent in 2010;
its oil consumption increased fivefold during the same period. In 2002, Chinese
trade with Africa was worth $13 billion; a mere decade later, that figure had
soared to $180 billion, three times the value of U.S. trade with
 the continent.
The hope was that with China
directly competing with Africa’s economic partners in the West, African
countries would win better terms for themselves. But as Burgis makes painfully
clear, what has happened more often is a race to the bottom, in which Chinese
firms focus their attention on African countries that face sharp credit
restrictions or economic boycotts from the West, owing to coups d’état or human
rights abuses. In many such countries, including Angola, the Democratic Republic
of the Congo, and Guinea, the Chinese have extended easy financing to
governments, crafting secretive deals that reward Chinese investors with even
more lopsided terms than Western governments and firms tend to enjoy. “Access to
easy Chinese loans might have looked like a chance for African governments to
reassert sovereignty after decades of hectoring by the [World] Bank, the IMF,
and Western donors,” Burgis writes, but, “like a credit card issued with no
credit check, it also removed a source of pressure for sensible economic
management.” In addition to this, critics point out that Chinese companies
frequently bring in their own workers from China, providing little employment
for Africans and few opportunities for Africans to master new skills and
technologies.
Some of Burgis’ strongest work follows the
dealmaking of a shadowy Hong Kong–based outfit called the 88 Queensway Group,
which was founded by a man sometimes known as Sam Pa, whose background is
reportedly in Chinese intelligence. By tracing a complex web of corporate
relations, Burgis shows how Pa’s group has put together lucrative deals in one
African country after another, since starting seemingly from scratch in Angola
during the early phases of China’s push into Africa.
In Burgis’
telling, one mission of Pa’s 88 Queensway Group and its associated companies,
including China Sonangol and the China International Fund, seems to be offering
the Chinese government plausible deniability when it comes to major transactions
and contracts with some of Africa’s most corrupt and violent regimes. But some
African elites at the receiving end of Pa’s entreaties have been left with
little doubt that dealing with Queensway would in fact put them in contact with
the highest levels of the Chinese state. Mahmoud Thiam served as the minister of
mines in Guinea under President Moussa Dadis Camara, a junta leader who faced
international outrage after his forces opened fire on a peaceful opposition
rally in September 2009, killing at least 150 and gang-raping many who tried to
flee the assault. In 2009, Thiam traveled to China at Queensway’s invitation and
later told Burgis about being whisked around Beijing by Pa’s associates. “If
they were not a government entity, they definitely had strong backing and strong
ties,” Thiam recalled. “The level of clearances they had to do things that are
difficult in China, the facility they had in getting people to see us [and] the
military motorcade gave us the impression that they were strongly connected.” In
the case of Guinea and other places, Burgis reports that Queens­way was able to
provide tens of millions of dollars to African governments on short notice, with
virtually no strings attached, sometimes to help bail out leaders presiding over
economic crises and sometimes merely to prove the company’s bona
fides.
The hope was that with China directly competing with
Africa’s economic partners in the West, African countries would win better terms
for themselves. But what has happened more often is a race to the
bottom.
In the hands of a less astute observer, Pa could come
off as something like a Bond villain. But Burgis rightly reminds readers that it
hardly takes a conniving mastermind to profit off the inequities and
shortcomings of African political systems. “If it weren’t him, it would be
someone else,” as a U.S. congressional researcher puts it to Burgis. The
researcher adds that even if Pa’s operation were shut down, “the system is still
there: these investors can still form a company without saying who they are,
they can still anchor their business in a country that is not concerned about
investors’ behavior overseas, and, sadly, there’s no shortage of resource-rich
fragile states on which these investors can prey.”
LOSS
PREVENTION
By showing how “the looting machine” is operated by
people and institutions both inside and outside Africa, Burgis transcends the
tired binary debate about the root causes of the continent’s misery. But if the
problem is as complex as he makes it out to be, with avarice flowing from so
many different sources, how can ordinary Africans—and African elites intent on
leading more just, prosperous, and equitable societies—improve
 their prospects? 
For Africans,
the answer lies in large part in insisting on more open and accountable
government. Although the outside world has taken little notice, democracy has
spread significantly around the continent in the last two decades, and although
conflicts grab the headlines, evidence suggests that war and other forms of
large-scale violence have declined during this same period. Stronger civil
societies and regular, free, and fair elections would prevent leaders such as
Angola’s dos Santos from perpetuating their rule for decades and might allow
more responsive elites to put Africa’s resources in the service of more
equitable development strategies.
Washington should expand its
efforts to prevent illicit financial flows, reducing the amount of revenue that
African countries lose owing to tax havens.
For the outside
world, the priority should be getting foreign powers, including China, to agree
on more stringent measures to combat corrupt business practices. The U.S.
Treasury Department is cracking down on foreign banks that enable Americans to
evade taxes; Washington should expand its efforts to prevent illicit financial
flows involving other countries as well, reducing the amount of revenue that
African countries lose owing to tax havens.
Finally, as Burgis’
book strongly implies (although does not explicitly argue), international
financial institutions such as the World Bank and the IMF must be made much more
accountable. In Africa, that would mean publicly measuring their programs’
performance in terms of their impact on economic growth. Over the years, such
institutions have demanded rigorous compliance from their poorest clients while
never holding their own performance or the soundness of their advice up to
public scrutiny. The internal IFC review Burgis cites made the same point more
than a decade ago. But its findings were largely ignored as the World Bank
continued to promote extractive industries in Africa even when they contributed
nothing to development. Today, with Africans seeking to cross the Mediterranean
Sea by the thousands to escape misery, a simple recommendation from that review
is perhaps more pertinent than ever: World Bank and IFC staff should be rewarded
not simply for allocating money to projects but for demonstrably reducing
poverty. After all, whatever the causes of African poverty, any efforts to
address it will fail if they are blind to their own
effects.