RE: Sub-Saharan Africa

Mon, 31 Mar 1997 04:49:20 -0500
David Lloyd-Jones (

On Thu, 27 Mar 1997, Karl Carlile wrote:

> KARL CARLILE:Can anyone offer an explanation as to why capital flows
> to sub-Saharan Africa have dminised to a trickle flow over the last
> decade or more?
> Given that the rate of profit must be higher in this region why and
> how does it happen that capital fails to accumulate there in a
> substantive way.

I think the basic proposition here is that profit never must be =
anything. There ain't nuthin'more empirical than profit.
Still, I think it's a fair question whether it's even plausible that one =
could make a buck in Sub-Saharan Africa. The only successful industry =
there so far has been the sale of weapons -- and in this biz the =
ultimate consumer is the Western taxpayer who finances the World Bank, =
the various national export guarantee funds, and so forth. These are =
collectively holding about a trillion dollars in Third World debt, and =
mirabile dictu that's roughly the amount of weapony these countries have =
bought from the nations which finance these advanced financial =
The richest African business is the one which sells a beeswax, camphor =
and menthol preparation named Tiger Balm -- completely independent of =
the Har Paw empire who sell essentially the same stuff with =
coincidentally the same name out of Hong Kong. This is as one would =
expect on the basis of Peter Drucker's wise dictum that the best =
industry for developing an economy is cosmetics. High value added, low =
capital investment, extremely fast improvement in basic entrepreneurial =
and organizational skills... Tiger Balm ain't lipstick, but the chemical =
composition is about 90% the same, the wax, water, and emulsifier. =20
Weapons and aches and pains, what else is there out there? Tourism is =
going fairly well in Kenya, jewelery continues to be a prosperous =
handicraft trade in several countries, and the Sudanese slave trade =
continues at the same old Arab stand. Other than these, what could =
possibly move anyone to think that business in Africa could be =
There are mines -- but thre is nothing in the mines that can't be mined =
cheaper in countries that have roads, rails and, importantly, river =
transport -- to say nothing of telephones, hospitals and cold beer. It's =
difficult to imagine what Karl had in mind when he asked his question -- =
unless it was some bizarre ideological notion that a.) the =
industrialised countries live by exploitation, b.) Africa is =
exploitable, and c.) exploitation is highly profitable. All three are =