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African development and the marginalisation of domestic capitalists

Working paper 115

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Pritish Behuria
The revival of industrial policy discussions has operated in parallel to reports of increasing domestic wealth accumulation across the African continent. Regional and continent-wide industrialisation has begun to be rhetorically linked to discussions of regional common markets and through the African Continental Free Trade Area. Yet, there is barely any mention of integrating African capital into the African industrial policy agenda. Where such discussions have appeared, they have emerged through the ‘Africapitalism’ narrative, which ignores the role of the state and politics in supporting and sustaining domestic business groups. Instead, the re-imagination of industrial policy on the continent relies on foreign investors, particularly the relocation of Chinese industry to various parts of the continent.
This paper has two core objectives. The first is to explain why the study of African capitalists – popular in the 1980s and 1990s – has remained relatively dormant since then. Dominant narratives – through neopatrimonalism and dependency-inspired arguments – have been pessimistic about the potential of African capitalists to deliver structural transformation. Gradually, these narratives, alongside intellectual trends within mainstream social science and African studies, have discouraged the study of politics of state–business relations in Africa. Yet African capitalists have become increasingly prominent in popular culture. Many of the wealthiest and most prominent capitalists have emerged through owning diversified business groups across the continent. This paper argues that more attention should be dedicated to the study of the politics of the emergence and sustenance of African diversified business groups (DBGs). To achieve this goal, a fluid categorisation of DBGs is introduced, building on Ben Ross Schneider’s previous work. By examining three country case studies – Rwanda, Kenya and Tanzania – this paper highlights how a range of DBGs are emerging across three very different political contexts.