A few years ago, while we were visiting the city of Jos, located in northeast Nigeria, one person pointed to a vast, neatly kept area behind a fence. “This ranch belongs to the Queen of England,” he remarked. Everyone was stunned because there is always an impression that independence in the 1960s resulted in a divorce between Britain and its former colony. That piece of evidence intrigued more questions than it provided answers. Did Africa really gain political independence from European powers? What were the terms for this independence agreed upon between colonialists and ‘liberators’?
Slowly but surely, it is quickly emerging that land, minerals and other natural endowments were not transferred to the new countries. After all, one of the chief reasons Europeans annexed territories overseas was for them to contribute directly to the economic well-being of countries such as England, France, Spain, Portugal, etc. It is therefore unlikely that these countries would have just packed their bags and left, considering the importance of colonial territories to their economies.
Former colonial powers did not receive decolonisation well; see the case of Portugal and its former colonies. Instead of transferring political authority to the new rulers, they withheld critical powers that would have ensured genuine independence without any strings. As such, an argument can be made that the only type of decoloniality that could be tolerated was the one that could happen within specific parameters. Stories on African independence always focus on the French control over West Africa and how the Portuguese destroyed Mozambique’s infrastructure in 1975 by dumping cement down the plumbing and sewer systems before handing the country over after independence.
What is little spoken about in history and political literature is how Britain also ruined its former colonies for its continued material gain. Thus, this article will showcase how London did not let go of its political and economic power over its former colonies. Australia, Canada and New Zealand, among others, have stayed as part of the British Crown. Thus, the discussion will not include them. However, the focus will be on the territories that gained total ‘political independence’, particularly in Africa.
The main argument is that it is inaccurate to study colonialism as a historical phenomenon, but it is a continuous affair that still defines the character of post-colonial territories. The presence of former colonial powers in the daily economic life of the so-called independent countries continues to elude researchers, commentators and political activists alike. Nonetheless, this article will demonstrate how Britain transformed itself from an imperial power to a financial powerhouse in the last century.
Britain granted Egypt partial independence in 1922 but retained control over the Suez Canal. When Gamal Nasser forcefully took over the waterway in 1956, Britain reacted angrily by declaring war on Cairo. Britain and France invaded Egypt and seized back control of the canal. This explains that the much spoken-about independence in Africa never really took place. This article will hopefully contribute to understanding why Africa has generally fared poorly on the economic and political fronts. Therefore, the British experience in Egypt shaped the nature of independence bestowed on the new countries. Britain moved from a coloniser to an uncontested owner of all resources and mass looter.
The mixed economic fortunes of most African states can be ascribed to brutal British financial power and financial interests of the little-known political entity in Westminster called the City of London. This effectively makes London the de facto capital of financial deregulation in the world, not New York or Zurich even come close. Therefore, London owes its eminent status as the world’s foremost financial centre to its tax heaven of sorts within the jurisdiction of the large city. That is why Britain has a large concentration of international banks than any other place in the world. Africa’s wealth is predominantly stored or directed from this shady place.
¥ France sets the tone on how to handle decolonisation
First round. Although the Spaniards, Dutch and others were the first to have colonies abroad, the English and French supposedly suffered massive losses when their former colonies in North America declared independence in the 1700s. Thirteen colonies in North America declared war on Britain between 1775 and 1783 when the belligerent parties signed the Treaty of Paris, which led to the formation of the US as a sovereign state.
France, Netherlands and Spain fought on the side of the US against Britain. They never imagined that their territories would follow the same path a few decades later.
France has always been more direct in its approach when dealing with the political independence of its colonies. Starting with the slave revolt on the island of Hispaniola in the Caribbean, which resulted in the freedom of Haiti in 1804, France set the tone in terms of how the political aspirations of people in ex-colonies would be dealt with. Writing for Forbes magazine, Dan Sperling explains that in 1825 the island nation was “forced to begin paying enormous ‘reparations’ to the French slaveholders it had overthrown”. Sperling says Haiti had to pay France about USD21bn to save its independence from threats from all slave-owning countries (particularly the US) as well as its very existence from “rankled racist sensibilities globally.”
The Haitian independence also delivered a massive blow to Spain, but the situation wouldn’t have been dire without the Napoleonic wars in the Iberian Peninsula. Britannica states that Napoleon’s imprisonment of king Charles IV and his son Ferdinand in 1808 implied that “the hub of all political authority was missing” in Spain. The publication adds that this occurrence meant that the French ruler had sparked a deadly political crisis that swept across both Spain and its foreign possessions. Spanish colonies stretched from what is now southern and western US states, e.g., Texas, Arizona and California, to Chile in the Southern Cone. The weakened Spanish empire meant the carcass was there for the taking. Between 1808 and 1826, numerous wars of independence were fought in Latin America.
Liberation hero Simón Bolívar solicited the Haitian military and financial support to free Venezuela, Bolivia, Colombia, Ecuador, Peru and Panama. Spanish Mexico resulted in the modern states of Mexico, Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. Overall, the independence of these states did not necessarily end the Spanish presence in its former colonies, but it merely took a new shape. Wars of independence were fought by Spaniards born in the New World (criollos) against those born in Spain (peninsulares). As a result, these post-colonial states’ economic and social structures did not change much as political power and the economy remained with Europeans.
Almost 160 years after Haiti broke free, France was in line to lose even more of its foreign territories, but now in Africa. The new states in West Africa would arguably get an even bigger punishment than Haiti: their economies were forever tied to France. Obviously, Paris held the wealth of ex-colonies and made decisions consistent with its political and economic control. Felix Tih and James Tasamba claim that the new states were required “to vest their foreign exchange reserves with the French central bank.” Nigerian journalist David Hundeyin suggests that this ‘neocolonial tax’, mischievously concluded in 1958, contributes a sizable portion of the USD2.5 trillion strong French economy.
¥ Britain’s transformation from coloniser to landowner and mass looter
Together with Britain and Portugal, France lost its most valuable possessions in Africa. Spain only had Equatorial Guinea, Saharwi, and smaller territories in Morocco (Ceuta and Melilla) as well as the Canary Islands. Nevertheless, the European powers were not going to surrender control cheaply. Their former treasures are still bound to colonial heritage through structures such as the Commonwealth of Nations, Community of Portuguese Language Countries, and the International Organisation of La Francophonie.
However, the story doesn’t end there: Britain remains the largest landowner in independent Africa. In countries like South Africa and Kenya, the British messed up the system of land ownership through finance. This occurrence forms the heart of this article and is explained in detail henceforth.
For most people, the link between land ownership and finance would not seem obvious. As such, it is necessary to visit history to understand this phenomenon again. It was stated earlier that Britain gave Egypt partial independence in the 1920s, and it was in Egypt where the invincibility of the shady world of finance in the world began. Business schools and classes in economics, law, accounting or politics do not teach this most important piece of history and its relevance to the controversial topics of illicit financial flows and global corruption. Usually, such things as tax avoidance, organised crimes, transfer pricing, etc., are treated as an anomaly, whereas they are an integral part of the persistence of colonialism.
The loss of colonies enhanced or reconfirmed Britain’s status as a criminal state, a fact that was known even during the Opium Wars with China in the mid-nineteenth century. Britain indeed tried everything, starting with the slave trade and drugs, to gain the infamous tag of the world’s first narco-state, colonialism and finance. World history is much more interlinked than it is often acknowledged. And the growth of capitalism bears testimony to this observation. Hence, it is pretty challenging to dissociate capitalism and banks from brutality and criminality.
In 1876, nonetheless, British courts “began to distinguish (for tax purposes) between a company’s place of registration and the place from which it is controlled.” This ruling was re-affirmed in 1929 when the court declared that a company called the Egyptian Delta Land and Investment Co. Ltd., registered in the UK but moved its board of directors to Egypt, would not be taxed in the UK. That case explains how the so-called tax heavens and money laundering practices were expressed in the international system. Not only that, but it also pre-empted how Britain would treat its colonies in Africa, Asia and elsewhere after independence.
Memories of the humiliation in the Suez Canal debacle meant that Britain, especially its financial sector, grew extremely alert in protecting domestic wealth and influence. Tax Justice Network reasons that this position resulted in two most important things that continue to shape the world of finance today. Firstly, offshore ‘Euromarkets’ emerged in London, a newly deregulated market that grew explosively and forced through global financial deregulation. Secondly, a post-imperial network of British ‘satellite’ tax havens developed around the globe, e.g., Singapore, Bahamas, Mauritius and Cayman Islands.
As confirmed by Michael Oswald’s documentary titled ‘Spider’s Web: Britain’s Second Empire’ (2017), in the 1960s, Britain transformed itself from a colonial power to a financial powerhouse on a whim. Essentially meaning the same, this transformation entails Britain’s parasitic life and ransacking of wealth in former colonies through several strategies, including tax heavens located at its many offshore jurisdictions to funding political instability and corruption. Britain is in charge of global financial centres like the three Crown Dependencies (Jersey, Guernsey and the Isle of Man) and the fourteen Overseas Territories, including offshore giants such as the Cayman Islands, and the British Virgin Islands and Bermuda.
Although regarded as independent ex-British territories, places such as Belize, Hong Kong, Mauritius and Singapore are part of this extensive network. Of course, tax heavens today exist beyond the UK. Tax Justice Network regards the UK as “one of the biggest, if not the biggest, single player in the global offshore system of tax havens (or secrecy jurisdictions)”. However, when examining the Financial Secrecy Index, Britain generally features in a moderate position. This is because it externalised its active looting to its network of offshore financial jurisdictions. If anyone thinks colonialism ended in the 1960s, they should think again.
The UK ranks in the top bracket of financial secrecy together with Switzerland, Luxemburg, Belgium and the Netherlands. Is it a coincidence that the major corporations that left South Africa in the past two decades, such as SAB, Anglo-American and Naspers, went to these countries? But what about the role of individuals in the post-apartheid South African state who used their positions to facilitate the country’s financial drain through flexible exchange controls and similar interventions? What about the continuing stern resistance to the nationalisation of the South Africa Reserve Bank (SARB), economic transformation and expropriation of land without compensation? All these questions will hopefully shed some light on many mysteries that exist in South Africa today.
¥ Death at independence – free Africa was born into criminality
When African countries gained independence in the 1960s, they walked into a hot fireplace. This occurrence is grossly overlooked by many historians, developmental economists and political scientists alike. Focus is placed so much on the Cold War, and its vagaries but economics is treated as a by-the-way, except for the mention of the structural adjustment programmes (SAPs) as if everything was hunky-dory before leading to the 1980s. Admittedly, the post-colonial state has not done itself favours with many challenges it has created. Still, the truth needs to be told that political independence in Africa was meaningless without the control of the economy and its levers. London continued to be an economic capital for countries such as Botswana, Ghana, Sudan, Uganda, Kenya, South Africa, Zimbabwe and Nigeria, financially speaking at least.
The Marxian base-superstructure maxim maintains that economic interests drive politics. Thus, the new post-colonial states’ affairs were decided by the London barons. The Cold War could be seen as an economic phenomenon rather than a political one since London and its Western allies feared that they would lose their fortune located in these countries to the Soviet Union. Indeed, Richard N. Haass is correct to point out that the Cold War was “won as a result of decades of sustained US and Western pressure on the Soviet Union and its allies.”
In the long run, the lessons from the Cold War have led to yet another disturbing phenomenon of the ‘finance curse’, not just in the UK but in overseas countries, including South Africa, where the British own massive asserts in land and mining. A.2016 report of a London-based NGO War-On-Want shows the extent to which British companies own Africa’s essential mineral resources, notably gold, platinum, diamonds, copper, oil, gas and coal. For example, over 100 companies listed on the LSE have mining operations in 37 African countries and collectively control over USD1 trillion worth of Africa’s most valuable resources.
¥ Britain as the undisputed landowner in Africa
Over-financialization of the South African economy, among others, acts as the hedging strategy from Britain and like-minded countries and companies against ‘political uncertainty’, as seen in 2015 when former president Jacob Zuma removed Nhlanhla Nene as finance minister. The JSE reportedly lost ZAR170 billion, and the currency devalued overnight. This implies that the UK uses economics to weaken countries via outright stealing using tax heavens, currencies and finance portfolios, and indirect control.
The collapse of the Zimbabwean economy is a hallmark of this strategy. Others like South Africa who wish to implement land reform are quickly reminded of what will befall them should they go ahead. Therefore, it is not surprising that former British diplomat Lord Robin Renwick moved from his seat to join the fight against those seen to be threatening UK interests in South Africa, see his book ‘How To Steal A Country: State Capture in South Africa’ (2018). Thus, the idea of state capture displays Britain’s uncompromising political madness to protect its prized possessions in South Africa.
In any way, people only know about Ingonyama Trust in KwaZulu-Natal, but there are also land parcels all over South Africa held in trusts on behalf of the British Crown. Economist John Christensen estimates that these trusts worldwide are worth as much as USD50 trillion. This form of ownership (trusts, a form of secrecy) is also actively used to conceal the identities of the actual owners of land in South Africa. For example, the 2017 Land Audit revealed that sizable amounts of land are held by companies or maybe shell companies (25%) and trusts (31%). It is clear why land reform will never take place in South Africa.
Also, there is a belief that the exit of Anglo-American from South Africa to establish its headquarters in London after the fall of apartheid would usher in a new era in mining. However, the truth is that neither land nor minerals have evolved to be in sync with political freedom in South Africa. What is least spoken about is that land, mining, and the economy demonstrate the attainment of the British strategy explained above. Financialisation characterises not just the economy but land and mining too. There is a belief that South Africa’s economic woes can be solved using mainstream economic tools: that is the greatest fallacy.
The strength of the financial sector and dependence on commodities is by design and does not help anyone. The structure of the economy is an expression of British imperial control. Political economist Moeletsi Mbeki points out that the South African economy was designed to serve foreign interests.
¥ The British global financialisation strategy is real
As the last territory, besides the Afrikaner independence in 1961, to finally leave the British empire (in theory at least), South Africa is feeling the brunt of the British global financialisation strategy.
If France maintained control over foreign reserves in ex-colonies after independence, the UK retained land ownership and mines. South Africa is genuinely under the British sphere of influence, as are its fellow African states, including the former Portuguese colonies Angola and Mozambique. The UK PM Boris Johnson once remarked that the Commonwealth “is a real asset for the UK.” After Brexit, Britain is freer to move quickly in reconsolidating its power base. The next article will cover the expansion of the British influence in today’s Africa.
The multi-state visit in 2018 by Johnson’s predecessor Theresa May indicated that Britain’s attention was again on Africa. The choice of Nigeria, Kenya and South Africa was not random but indicated where British wealth was stored. The UK vision for Africa is well articulated in the article ‘Africa is a mess, but we can’t blame colonialism’ in the Spectator magazine (2002), wherein Johnson states: “The continent may be a blot, but it is not a blot upon our conscience. The problem is not that we were once in charge, but that we are not in charge anymore.” Britain is ready to once again re-conquer the territories it never allowed independence.
Finance, not guns, will play a huge part when Britain returns to fly the Union Jack over Africa one more time.
God Save The Queen!