The division of the Africans and their failure to build a strong unity have exposed them to exploitation.

The division of the Africans and their failure to build a strong unity have exposed them to exploitation. The thesis that the fragmentation of Africa weakens its position is central to many analyses of the continent's economic and political history – and it directly connects to the themes previously examined by Ren, from pan-African initiatives to external influences and historical power structures. How division has historically enabled exploitation The colonial "divide and rule" tactics deliberately created or deepened divisions within the colonized societies to stabilize their own rule. The colonial powers deliberately weakened existing political systems and stoked rivalries to facilitate their control. The core of the logic is to split a potentially resistant population into several competing groups so that they cannot organize collectively against the colonial power. Existing social, ethnic, religious, or regional differences are politically charged, legally fixed, and administratively reinforced. The colonial powers drew borders without regard for ethnic, linguistic, or economic realities, thus creating states with deep internal tensions. In Africa, European powers combined the dismantling of pre-colonial structures with newly created administrative borders, different legal regimes, and the introduction of taxes and forced labor, which intensified social inequalities and local rivalries. This legacy continues to impair coordination and political coherence to this day. The colonial powers fragmented the markets and created weak regional integration. Small national markets and high trade barriers between neighboring countries limit economies of scale and make it difficult to build competitive processing and production industries. This forces many economies to export raw materials under less favorable conditions. The colonial powers have indeed consciously and unconsciously fragmented the markets on the continent – that is, split them – and this has sustainably influenced the economic development of Africa. Arbitrary borders were drawn. At the Berlin Conference (1884–1885) and in the subsequent "Scramble for Africa," the European powers drew borders. What was previously a cohesive economic area (for example, trade routes between different African societies) was suddenly interrupted by state borders. This destroyed already existing local and regional market chains. The colonial powers were interested in aligning the infrastructure for export. Roads, railways, and ports were primarily built to direct raw materials (ores, timber, agricultural products) from the interior to coastal export – not to connect African regions with each other. This hindered internal trade flows: it was difficult and expensive to transport goods within Africa for processing or resale there. The colonial powers aimed for the colonies to serve as suppliers of raw materials and as markets for industrial products from the metropolis. They promoted monopolies and concessionary models that hindered local businesses and prevented competition. Many local production chains were dismantled: for example, iron was no longer processed for local tools but exported raw. This led to the breakdown of connections between different economic sectors (agriculture, crafts, industry). The competition between the European powers resulted in trade barriers being erected between the individual colonies. Each colony was managed independently and had its own regulations, further fragmenting the continental market. The consequences of this policy are lasting: - The internal markets remained small and fragmented, making it difficult to develop a strong, diversified industry. - Many African countries remained heavily dependent on the export of raw materials, exposing them to volatile global prices. - The political and economic boundaries that remained after colonialism continue to contribute to the difficulty of regional cooperation and the formation of large, integrated markets on the continent. In summary, the colonial powers created a system that hindered the economic integration of Africa – instead, the continent was divided into loosely connected, export-oriented sectors. This is an important part of the legacy that many African countries still struggle with today. Many countries still heavily depend on a few raw materials (minerals, oil, agricultural raw materials). This makes the economy vulnerable to price fluctuations in global markets. Because the infrastructure and industry were often geared towards export, there are often insufficient capacities today to process raw materials locally. This means that the highest profits are generated outside of Africa, while wages in extraction remain relatively low. Historically, trade routes were oriented towards the coasts and the metropolises. Today, intra-African trade is often still lower than trade with non-African markets – although there are initiatives like the AfCFTA to change this. When countries compete individually for foreign investment or development aid, they often lower taxes, relax regulations, or make concessions that weaken their negotiating power. This dynamic can lead to a "race to the bottom," where external actors reap the main benefits instead of supporting local communities. This is a central mechanism that sustainably shapes the economic situation of many African countries, as states compete for foreign investments or development aid, trying to attract investors with special "sweeteners." This is part of a "search for returns" for capital, but it has profound consequences—and is closely linked to historical patterns, from colonial trade structures to Bretton Woods and pan-African counter-strategies. Many countries lower the corporate tax rate or grant tax holidays (often 5–10 years) to encourage companies to settle here. Special Economic Zones often offer zero taxes, duty-free import of machinery, and reduced regulation. When several countries compete for the same investment, the offers become increasingly generous: additional infrastructure, subsidies, simplified permits. The costs of this strategy are enormous. Tax revenues are one of the most important sources of income for education, health, and infrastructure. When large companies pay virtually no taxes, there is a lack of money for public services. Often, the activity remains "extractive," meaning that raw materials are mined and exported without much value being created locally. This reinforces exactly the patterns that were already addressed in the article "Africa must create value." Local companies that do not receive tax exemptions often cannot compete with international firms that have such privileges. This weakens the domestic economy. If the main growth strategy relies on attracting foreign money with tax incentives, the economy becomes vulnerable to capital flight when global conditions change. There is a historical continuity from the colonial period to the present day. This dynamic is not a creation of the present but a continuation of deep structures: Back then - during the colonial period - markets and infrastructure were designed to transport raw materials as quickly and cheaply as possible. Today, this often happens through investment models, as companies are expected to export raw materials or agricultural products as efficiently as possible, without much value creation on-site. The role of Bretton Woods institutions (in another article) and structural adjustment programs has pushed many countries to shrink the state and become "investment-friendly" - often resulting in lower taxes and reduced regulations. When countries negotiate individually, they have less leverage. This is exactly the point where initiatives like the PASAI summit or the AfCFTA come into play, as together they can negotiate better framework conditions and prevent a "race to the bottom" in taxes and standards. Here are some exemplary approaches to change this dynamic. If African countries agree on common standards for investment incentives, they can prevent underbidding against each other. Instead of "tax exemption for all," countries can tie incentives to local value creation, employment, technology transfer, or environmental standards. By improving tax administration, combating transfer pricing manipulations, and strengthening regional cooperation, dependence on tax reductions can be reduced. Joint contracts and rules (e.g., within the framework of the AfCFTA or specific raw material alliances) can increase the negotiating power of individual countries. This directly addresses my earlier articles - which can be read here - on the role of France and the European influence on the African economy, the impact of the Bretton Woods institutions, and pan-African attempts to overcome these structures. Three impressive examples have been selected to illustrate how this "competition mechanism" works and its consequences. I will analyze each case for clarification. Copper in Zambia Zambia is one of the largest copper producers in Africa, and the government is actively seeking investments in this sector. To attract investors, the government is introducing targeted incentives: A dividend exemption for companies with mining permits will tax the dividends paid at 0%. The depreciation incentives here can allow for 25% of the investment costs (buildings, railways, equipment) to be depreciated. Duty-free import for investors, who can import capital goods and machinery duty-free. Target zones are special economic zones (such as the Multi-Facility Economic Zone) that offer additional incentives for projects in priority sectors (mining and processing): reduced profit taxes, dividends, and export duties for a period of at least 10 years. What has this brought? These measures have indeed stimulated capital inflows. After the reforms of 2022-2023, major projects (such as the expansion of Kansanshi and investments from CNMC) were realized in the sector. However, there is also a downside, as the extensive incentives cost the state significant amounts. For example, a company (Mopani) with a revenue of nearly 6 billion US dollars paid only about 28 million US dollars in profit taxes over eight years until 2021. This diminishes state revenues needed for social programs. Furthermore, there is a risk that the incentives could lead to tax evasion or profit shifting abroad. 2. Oil in Nigeria Nigeria, one of the largest oil producers in Africa, is also actively leveraging tax incentives to attract foreign investments. Following the passage of the Petroleum Industry Act (PIA, 2021), authorities began offering more transparent and comprehensive incentive packages. These include: - Tax exemptions for operators of certain projects (especially in the gas infrastructure sector) receive a long-term tax deferral (up to 10 years). - Tax credits for companies, which can claim tax credits for exploration costs in new regions, the development of gas infrastructure, or the use of renewable energies. - Exemptions from the hydrocarbon tax, which is reduced or eliminated for new deepwater projects, and an exemption from import duties is granted for equipment. - Investors in strategic projects are guaranteed that the tax conditions will not change arbitrarily during the project duration. - The terms of production sharing contracts (PSCs) are being revised to balance the profit distribution between the state and companies. The result? These measures have contributed to the revitalization of the sector: In recent years, Nigeria has attracted significant investments in deepwater and gas projects. However, public opinion on these incentive packages is divided: Some consider the incentives too generous and fear that this could lead to a loss of state revenues that could be used for infrastructure development or social programs. 3, Cacao in Ghana In Ghana, one of the world's leading cocoa producers, the government is also focusing on targeted incentives, but with an important distinction: the emphasis is not only on the export of raw materials but also on processing. - Newly established companies in the agricultural processing sector (including those related to cocoa) receive tax benefits – for example, for five years. - Companies that settle in special zones (Tema, Takoradi, Kumasi) and export at least 70% of their production benefit from various advantages: a corporate tax exemption for the first ten years and duty-free import of machinery and raw materials. - The government goes even further: for example, the state-owned company CMC sells cocoa beans at a discount (up to 20%, and for small beans even up to 40% or more) to facilitate access to raw materials. What has this led to? Although these measures have attracted investments in domestic cocoa processing, there is a paradox: the incentive structure is export-oriented. To benefit from the free trade zone, companies are forced to export the majority of their production abroad. At the same time, barriers have been created for the domestic market (for example, for chocolate production in Ghana), such as a very high tax rate (60%) on domestic sales. As a result, the country has fewer opportunities to promote domestic consumption and create added value in the local economy. External influence through bilateral relationships: Powerful external actors can exploit differences between African states to promote their own interests, whether in trade, security, or resource extraction. This reflects some of the dynamics examined in an article regarding France's role in Africa and broader geopolitical patterns. The pan-African response and its challenges Pan-Africanism has long viewed unity as a means for dignity, sovereignty, and economic strength. Key efforts include: From early intellectual and political movements to modern forums like the African Union and events such as the previously examined PASAI summit, the goal has always been to coordinate positions and strengthen the common voice. The AfCFTA, which aims to create a unified market across the continent, seeks to reduce intra-African trade barriers and strengthen regional value chains – thereby directly addressing the issue of fragmentation. Common rules for certification, customs, and investments could help African countries operate from a stronger negotiating position and build larger industrial clusters. However, the implementation is inconsistent; differences in economic strength, political priorities, and capacities continue to complicate coordination. Historical and contemporary examples: My research on powerful African queens and kingdoms (such as the Kingdom of Benin, the resistance of Nzinga, and the queens of Kush) shows that strong, centralized, or well-coordinated communities were able to withstand external pressure and control trade routes. The erosion of such centers during the slave trade and colonization made many regions more vulnerable. The Cold War era and the pressure from debt and structural adjustment measures (related to the institutions studied at Bretton Woods) often led African states to be driven in different directions. This weakened regional solidarity and prioritized short-term survival over long-term strategic unity. Fragmentation can influence how countries manage natural resources and negotiate contracts. A unified or at least coordinated stance could improve the conditions for processing, technology transfer, and local value creation. Unity as a strategy to reduce exploitation Stronger unity does not mean uniformity, but coordinated action in key areas: Common positions on critical minerals, agriculture, or energy could shift the balance of power in negotiations. Joint investments in transport, energy, and processing facilities can achieve economies of scale that individual countries could not afford alone. Standards for environmental protection, labor rights, and profit distribution can prevent ruinous competition and ensure that the development benefits the local population. Coordinated approaches against cross-border threats and corruption can secure economic gains and improve the business climate. 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