Current Scholarship
Capitalizing Africa – High finance from below

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Introduction by James Christopher Mizes and Kevin P. Donovan to Vol. 92 of Africa, “Capitalizing Africa,” 
published by Cambridge University Press.
Check out the full volume here

Capitalizing Africa
James Christopher Mizes and Kevin P. Donovan
Ghana’s indigenous banks
Anna-Riikka Kauppinen
Transferring CFA in Congo-Brazzaville
Rundong Ning
Privatization in Ethiopia
Christina Tekie Collins
Credit bureaus in West Africa
Vanessa Watters Opalo
Popular shareholding in West Africa
James Christopher Mizes

In 2016, the city of Cape Town hosted the fourteenth annual meeting of the African Capital Markets Conference. Each year, the conference assembles ‘African sovereigns, corporates, regulators, local and international investors, and financial service providers with interest in fostering the diversity of investment and funding options via local capital markets’ (IMN 2016). The conference began in 2002 and, at the time, limited its geographic focus to capital markets in South Africa. But in 2012, the conference shifted its approach to ‘include all of Africa’ and to emphasize a ‘particular focus on emerging markets in Sub-Saharan Africa’ (ibid.). Indeed, its expanding geographic focus accompanied an important transformation in African capital at the time: a growing number of stock exchanges and private equity firms were springing up across the continent, and a growing number of African investors, governments and firms were starting to use them.

The rise of African capital markets is an important feature of global finance in the new millennium. Although Euro-American development institutions continue to offer financial products across the continent, these institutions have transformed how they understand the problem of economic development and are now proposing a new generation of solutions to it. In the past twenty years, international aid organizations have increasingly turned towards African stock markets, ratings agencies and commercial banks to finance projects across sectors. But the continent’s private sector has been more forcefully leading this expansion by introducing new ways to measure risk, new debt instruments, and new roles for government in the regulation of an emerging financial industry. This shift has been similarly encouraged by African investors’ increasing openness to financial assets denominated in local currencies and issued by African governments and firms. From futures markets to Bitcoin, sovereign bonds to credit scores, the continent – and especially its leading cities such as Abidjan, Nairobi, Lagos and Johannesburg – is home to a proliferation of such financial devices. But the precise causes and consequences of this transformation are not yet clear.

For critics, the growth of capital investment across the continent is another instance of a global form of financialization in which Euro-American capital is once again forcing African states into debt dependency (Kvangraven et al. 2021). From this perspective, the expansion of sovereign bond issuances on European and American stock exchanges is understood as a shift in – but continuation of – older forms of Africa’s economic subordination and dependence. The extent of this ‘financial deepening’ is such that Stiglitz and Rashid (2013) issued a warning that African sovereign debt was at an historic high and that payments from these bonds were soon coming due. This was, in their view, a harbinger of a new round of sovereign defaults echoing those of prior decades. Such a concern was only heightened as this issue went to press amidst increased debt distress due, in part, to foreign investors pulling capital out of the global South in response to interest rate changes in Euro-America. Others have pointed to the role of American credit agencies in rubber stamping reckless borrowing and therefore incentivizing a looming financial catastrophe (Chelwa 2020). And Daniela Gabor (2021) has coined a term to summarize this series of nefarious events: the ‘Wall Street Consensus’. According to Gabor, global development banks are today working in ‘technocratic forums away from public scrutiny’ to ‘enlist’ states to ‘assume the demand risk’ on new financial assets – ‘de-risking’ for the benefit of private institutional investors (ibid.: 440–7).

Yet many African officials, professionals and investors understand finance in starkly different terms. In their vision, capital markets are part of a new chapter of African history in which economic self-determination is achieved through the harnessing of money that has long been controlled by foreign financiers. Rather than a pernicious trend, it is an opportunity to put African money to work for Africans. It is an aspiration that is often explicitly pan-African. For example, the African Union envisions its financial future in terms of African capital markets, and credit rating agencies and banks across the continent have long understood their market space as distinctively ‘pan-African’. For many of these financial actors, the aim is to wrest development planning and capital allocation away from Euro-American financial institutions and put them in African hands (Mizes 2016). Here, capital markets, currency swaps and financial accounting appear not as a form of dependence, but as a pathway to independence and sovereignty (Mbeng Mezui 2017). In other words, many of these transformations may not have much to do with ‘Wall Street’, nor is there any global ‘consensus’ on how to organize and expand African capital and its markets.

This special issue moves beyond these duelling views. Rather than celebrate or denounce these ongoing financial transformations, the articles collected here take finance in Africa as a field of anthropological inquiry. They investigate the social worlds of finance, its technical devices, and the mundane manner in which forms of capital are being composed. They foreground the moral disagreements over the emerging infrastructures of African capital markets, and they analyse how these debates take shape around a diverse range of specific financial devices: privatization, credit scoring, shareholder associations, foreign exchange regulations and bank bailouts. In place of broad predictions on the inevitable fallouts of finance, our contributors explore new modes of popular and professional reasoning about finance in Africa by Africans, and their specific struggles over how to know, value and manage capital.

While this issue draws on exemplary cases from across the continent, it also analyses a distinctly global transformation. Scholars of finance have previously focused their analysis on ‘command and control centers’ located in ‘global cities’ such as Tokyo, London and New York (Sassen 1991). From this perspective, financial centres are ‘global’ in the sense that their influence extends outward to structure social and economic life across the world. In these approaches, places such as Abidjan and Accra are subject to the vicissitudes and power of financial actors – hedge funds, consulting firms, insurance companies, credit rating agencies – largely located outside the continent and looking for new investment opportunities within it (see Mawdsley 2018; Ouma 2020b; Roitman 2021). As a result, the activities and aspirations of Africans participating in the continent’s own financial industry have largely receded from scholarly view.

In this issue, we place the geography of African finance today in a different frame: our approach links the flow of African financial expertise to the flow of money in, out and across the continent (cf. Montagne and Ortiz 2013), flows that together constitute – and can potentially reconfigure – Africa’s role in the ‘world system’. We analyse how African professionals are translating financial devices from outside the continent to fit the moral dilemmas, political styles and economic practices found within it (Ong and Collier 2007; Guyer 2004). Many of these professionals are claiming to harness capital to meet African needs and oppose Western control of Africa’s future. They often explicitly frame these claims in the idiom of pan-African commerce. As a result, the moral vision of a unitary ‘Africa’ is once again emerging as a way to frame efforts at promoting intra-African exchange and reversing the global flow of wealth out of the continent. At stake in this reversal is the relocation of ‘command and control’ centres from London and New York to the emerging financial centres in Africa’s cities.

The future of African capital is far from certain; indeed, financial analysts themselves ‘often fail to predict the correct future developments of financial markets’ (Leins 2018: 4). The articles collected in this issue of Africa provide insight into the diverse locations in which this future is being made and disputed. In this introductory article, we bring a wide-angle lens to these recent transformations and the near futures of African finance that they anticipate. Why, for so many, has African political liberation become a task of financial engineering? And why have some Africans’ aspirations for development today returned to a promotion of ‘indigenous’ and ‘domestic’ finance? To address these questions, we build on our own ethnographic research, readings of key programmatic texts, analyses of related scholarship, and the articles collected in this issue. With these resources, we sketch out how the problem of African economic development is being reframed today. Yet we also examine the limits of this reframing and the potentially calamitous consequences of which many critics are already taking note.

James Christopher Mizes and Kevin P. Donovan. “Capitalizing Africa: High Finance from Below.” Africa 92, no. 4 (2022): 540–60. doi:10.1017/S0001972022000444.

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