Economic Crises in Africa and the Role of International Finance Capital

Events in Liberia and Mayotte reveals the role of imperialism and the continuing underdevelopment of the continent

By Abayomi Azikiwe, Editor, Pan-African News Wire

Monday December 23, 2024

Geostrategic Analysis

In the West African state of Liberia, a worsening economic situation is impacting the political stability of the country.

During the early morning hours of December 18, the people of Monrovia awoke to a massive fire at the Capitol building.

Immediately there was much speculation surrounding the origins and culpability of the incident with many believing it was arson. Inside Liberia there has been an escalating struggle over the political future of the country. 

The Capitol building, which encompasses the House of Representatives, was burned just one day after plans to oust Speaker Jonathan Fonati Koffa from his position prompted protests. Some of the demonstrators, including an assistant to former President George Weah, were arrested by the police. 

Current President Joseph Boakai has called for a thorough investigation into the fire at the Capitol. His relatively new administration has come under harsh criticism for the worsening economic conditions inside the country. Since early 2024, there have been a series of mass demonstrations and industrial actions demanding higher salaries and improved working conditions. 

A trial is looming after arrests were made of opposition leaders. Many activists are accusing the Boakai government of blaming his political adversaries for the rising discontent over the burgeoning financial crisis. 

One key figure in the attempted prosecution is the former finance minister. Charges levelled against these politicians are designed to cast dispersion on the previous administration led by President George Weah.

One African affairs news source described the situation saying:

“Former Finance Minister Samuel Tweah and several others have pleaded not guilty to charges of economic sabotage and related offenses. While the government portrays the trial as a critical step toward accountability, supporters of Tweh argued that the case is a politically motivated charade, designed to distract from deeper issues plaguing the administration. The indictment which was read on Friday, December 20, alleging financial mismanagement and misuse of public funds, has sparked widespread debate. Many Liberians believe the case is less about justice and more about scapegoating individuals for the country’s economic struggles.” (https://frontpageafricaonline.com/breaking-news/liberia-tweah-others-plead-not-guilty-to-economic-sabotage/)

Although the government is moving to criminalize the opposition to President Boakai and his ruling Unity Party Alliance, official reports issued by the Central Bank of Liberia (CBL) paint an entirely different picture than what is articulated by the workers and opposition groupings. The World Bank in its country overview of Liberia places a strong emphasis on growth within the national economy. Nonetheless, when further details of the report are reviewed it indicates growing problems with the national deficit which is undoubtedly hampering qualitative growth in areas which are important to working people, farmers and youth. 

The Liberia Observer however notes in its economic coverage that:

“According to the CBL quarterly bulletins, the economy’s three key sectors — primary, secondary, and tertiary — exhibited mixed growth performances throughout the year. The first and second quarters saw growth in most major commodities, while the third quarter showed moderation in several areas. However, overall performance across the three quarters suggests a positive trajectory, supporting the attainment of the 4.8% growth target, surpassing the 4.6% achieved in 2023.” (https://www.liberianobserver.com/news/liberia-s-economy-poised-for-4-8-growth/article_5470eec8-bc35-11ef-b647-c32236e20614.html)

The Role of Finance Capital

Yet a more objective assessment from the International Monetary Fund (IMF) of the short and medium-term debt obligations stemmed from a request for an extension for payments of debt obligations by the Liberian government:

“The decline began in the second half of 2022 but became markedly worse during the 2023 presidential election campaign. The revenue-to-GDP ratio dropped to 13.4 percent, not only lower level than that at the beginning of the 2019 ECF (13.9 percent of GDP) but also well below the program targets for 2023 (15 percent of GDP). The measures proposed to underpin the 2023 supplementary budget were neither adopted nor implemented. Additionally, budget allocations among Ministries, Agencies, and Commissions (MACs) were often substantially revised without the required Legislature’s approval. This pattern highlights the need for strong enforcement of the PFM legislation in relation to the budget preparation, execution, and monitoring processes.” (https://www.elibrary.imf.org/view/journals/002/2024/309/article-A001-en.xml)

These economic problems are being manifested not only among the various political parties and coalitions vying for domination within the legislative branch. Workers in the healthcare sector are staging a nationwide strike listing a set of demands which can only be addressed by the current administration in Monrovia. The decline in the standard of living among the workers and youth of Liberia will continue to remain a source of mass action and general strikes.

Nordic Africa News published an assessment of the rising debt crisis in Liberia, emphasizing:

“Analysis of the budget from 2018 to 2023 showed Liberia has spent more than US$327 million on servicing debts. This is to show the harmful effect of debt service. The money that ought to be spent on the development of crucial sectors is spent on servicing debt…. Liberia’s debt-to-GDP ratio is considered low but the revenue that went into debt servicing is still on the high side. If you look at the budget, you will see that a huge sum of money is used to service debts…. The government of Liberia can’t only exist to pay creditors. If we can be consistent about ensuring that the money is invested in key sectors like agriculture, mining, health, education, and tourism that would ensure there are derivable and tangible benefits in terms of economic growth, job creation, and others, that in itself is not a bad thing, but a litany of constraints has prevented Liberia from achieving the necessary level of investment and growth, despite its significant borrowing.” (http://www.nanews.net/news/politics/how-liberias-debt-surged-to-us2-03-billion/)

Consequently, the indirect domination by imperialism continues to impact many states such as Liberia through the policies imposed by the IMF and the World Bank which reinforce the exploitation of African resources and labor. The profits from the resources in Liberia including large deposits of iron ore, gold, diamonds, rubber, palm oil, etc., are being utilized to pay debt service to the international financial institutions rather being reinvested into the social and economic well-being of the people.

Mayotte Exposes the Political Bankruptcy of French Colonialism

The Chido Cyclone hit several Southern and Eastern African states causing monumental devastation, injuries, deaths and dislocations.  One territory off the coast of East Africa in the Indian Ocean Union of Comoros, Mayotte, was severely impacted by this extreme weather event.

Mayotte is routinely referred to by the western media as a “French Overseas Territory” as if it exists within a geopolitical vacuum. In reality the colony of Paris is part of an independent African state, the Union of Comoros, which is a member of the African Union (AU) and the Southern African Development Community (SADC). 

Official accounts claim that Mayotte refused to join Comoros when it gained independence through a referendum in 1974. Such allegations cannot conceal the extreme conditions of impoverishment under which the residents of Mayotte live. 

Since 1974, the United Nations General Assembly has voted in a non-binding resolution not to recognize French colonial rule in Mayotte. The Union of Comoros government continues to reject the domination of part of its territory by France and still asserts its legal sovereignty over the area.

Press accounts of the difficult situation in the colonial territory compelled French President Emmanuel Macron to visit amid the obvious failed relief efforts. Macron who faces his own political problems within the French government further exposed his precarious status within the body politic and internationally. 

The Cable News Network (CNN) reported on Macron’s visit to Mayotte, revealing:

“Upon arriving in Mayotte on Thursday (Dec. 19), Macron was met with ire from some residents, who were aggrieved by what they felt was a lack of support from Paris following the disaster. ‘The water isn’t there, no services are there. After six days, is that normal?’ one man angrily asked the French president. A woman, clearly distressed, told Macron that the archipelago ‘needs him.’ ‘Everything is demolished. We need you – there is nothing in Mayotte. We have young children, we are without water, without electricity,’ she told the president.” (https://www.yahoo.com/news/french-president-emmanuel-macron-lands-094712807.html)

Mayotte is not the only 21st century French colony which has proved the obsolete character of this system of governance. In New Caledonia and Martinique, rebellions erupted during 2023-2024 right under the watchful and oppressive eyes of Paris. 

Whether it is the classical colonialism of Paris or the neo-colonialism of France and the U.S., each form of modern-day imperialism cannot bring peace and prosperity to the impacted masses of workers, farmers and youth. Genuine independence and sustainable development can be most rapidly and effectively achieved through national democratic revolutions and socialism where the majority of those within society control the means of production and the state apparatus.