A multinational corporation (MNC) is a corporate organisation that owns or controls the production of goods or services in at least one country other than its home country. A multinational company generally has offices and factories in different countries and a centralised head office where they coordinate global management. Multi-national corporations emerged on the world scene in the post-World War II era. These global giants became an economic necessity when it dawned on the colonial masters that direct rule was no longer realistic; and they needed a replacement that would serve the goal with equal, if not greater efficiency. Though America was a forerunner in the global penetration of trans-nationals, in Africa, European countries leveraged on the ties they maintained with their former colonies, to re-establish informal control, through these corporations. Thus, in Africa Unilever, B.P and Royal
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in Africa (Oatley, 2000). Just like colonialism, the regime of multinational was promoted by the West as “engine of growth”. This is based on the assumption that their operation generates what economics call “positive externalities” in the host country; promote foreign investment, transfer of technology, and management expertise, and efficient allocation of resource.
Experience in Africa has shown that multinationals, rather than promote growth operate as instruments of capitalist domination. Oattey lamented:” it seems incongruous to achieve political independence from colonial powers and yet continue to struggle under the economic dominance of the colonial powers multinational firms”. From the list of the multinationals already mentioned it is obvious that they always engage in critical areas of the national economy, in which the government is more interested and where conflict of interest often arise. This c o n f l i c t of interest sometimes push multinationals, to dabble in the domestic politics, or try to undermine the security of the host country: the extreme is their strategy of beating around codes established to regulate their operations.
Vernon (1998: 28) provides a clue why this conflict of interest cannot be avoided: “the regime of a nation-state is built on the principle that the people in any national jurisdiction have the right to maximise they are well being, as they define it…. The MNC, on the other hand, is bent on maximising the well being of its stakeholders from globaloperations”.
And more often than not, they succeed in this contest of power through devices such as “inter-locking directorship and cross-shareholdings:
(Nkrumah, 1974:259). In 1979, Nigeria took a rare, but a bold step w h e n it nationalised the assets of the British Petroleum. The official reason given for the action was to prevent Nigeria oil from getting to the enemies of Africans in apartheid South Africa. But the un-stated and more convincing motivation was to force the hands of Margaret Thatcher led t h e British government in the then protracted negotiation for Rhodesian (now Zimbabwe) independence (Aluko; 1981:212).
SELF-ASSESSMENT EXERCISE
What are multinational corporations?
3.3.2 Strategies to Combat Neo-Colonialism
This analysis of neo-colonialism is not complete if we fail to recommend
“a correct and global strategy” to defeat it. Therefore the only way to discover and expose neo-colonial intrigues is to examine the nature of the struggle for independence. If the liberation movement is firmly established, the colonial power invariably resorts to a “containment”
policy to stop any further progress, and slow or deaden its impact.
POL 121 INTRODUCTION TO AFRICAN POLITICS
But the machinations of colonial power were bound to fail if the nationalist leaders maintained a clear spirit of vigilance and cultivated genuinely revolutionary qualities. The correct strategy should be preventive in nature; aimed at preventing a state from becoming a puppet or client state. But where neo-colonialism has become established African states must unite and deal with neo-colonialism on a Pan-African basis, otherwise, Euro-American forces will continue to undermine, selectively, African core interest.
For obvious reasons, Kwame Nkrumah’s advocacy of a continental union for Africa was unpopular in the early sixties. The reason is not farfetched.
Most African leaders were conscious and jealous of their newly won independence and were not prepared to compromise it in the name of African unity. But in this age when efforts are being made to convert the barrier of colonial imposed boundaries into a bridge of opportunities for cooperation among nations, Nkrumah’s suggestion, in retrospect, has probably proven to be too attractive an idea to be ignored. Indeed, the establishment of the African Union in 2001 is a step in this direction.
4.0 CONCLUSION
Neo-colonialism in its operations modified the mechanism of direct control, for a subtler, and disguised strategy of manipulation of the economies of African states. Consequently, exploitation is more efficient under neo-colonialism while resistance to it elicits less mass support.
Before granting independence to t h e African States, the colonial masters took conscious steps to prepare the minds of Africans for“Flag”
independence, even if it would mean handing over power to those who would collaborate with the Europeans in the exploitation of Africa.
Whether it relied on the operations of multinational corporations, unfair trade arrangements, or foreign aid manipulation, neo-colonialism would not have succeeded if not for the fertile ground provided for it by African political leadership. Therefore, solutions to the problems created by neo-colonialism can be found within, then outside Africa.
5.0 SUMMARY
In this unit, we discussed different mechanisms employed by neo-colonialism to achieve its objectives. We also examined the political-economic and military aspects of neo-colonialism. We further analysed the role being played by Multinational Corporations in carrying out exploitation in the name of business activities. We also added that the concept of foreign aid is a major factor in Africa’s external indebtedness and consequent underdevelopment.
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6.0 TUTOR-MARKED ASSIGNMENT
1. How valid is the view that multinational corporations are “engine of growth in Africa?
2. Describe the major mechanisms of neo-colonial control in Africa.
3. What are the major dimensions of neo-colonialism in Africa?
7.0 REFERENCES/FURTHER READING
Onimode, B. (2000). African in the World of the 21st Century. Ibadan:
University Press Ibadan.
Bond, P. (2006). Looting Africa: The Economics of Exploitation.
London: Zed Books.
Offiong, D. (1980). Imperialism and Dependency. Enugu: Fourth Dimension Publishers.
Iwerieber, E. (1997). The Age of Neo-Colonialism in Africa. Ibadan:
African Books Builders.
Nkrumah, K. (1974). Neo-Colonialism. The Last Stage of Imperialism.
London: Panaf Books.
Aluko, O. (1981). Essays in Nigerian Foreign Policy. Sydney: George Allen & Unwin.
Oatley, T. (2003). International Political Economy. Delhi: New Parsley Education Ltd.
POL 121 INTRODUCTION TO AFRICAN POLITICS