Page 1 of 14

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 06

July 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 371

Economic Globalization and Poverty Trap in Africa: An

Historical and Theoretical Interrogation

Festus Chibuike Onuegbu.

Department of History and International Studies Nnamdi Azikiwe University, Awka, Nigeria

Email:onuegbufestus@roketmail.com

Abstract

No doubt, since the beginning of the 1990s,

Africa has been deeply drawn into the trajectory

orbit of globalization as the prevailing dominant

world order. Globalization, hugely fastened

around the Western traditions and philosophical

ethos of ‘laissez faire capitalism’, is deeply

pushed through the principles of ‘economic

liberalism’. From its ranks of protégés has

always come the much taunted argument and

persuasion that ‘it is, undeniably, a sure path to

mutual growth and equal development that

would engender global prosperity and end

poverty irrespective of geography, race, or

culture’. With its appealing economic forebears,

and the hurry expectation for development that

greeted it, African economies bought into its

rhetoric and practical dialectics. However, since

the integration of African economies into the

globalization-driven world economy to date,

poverty level in Africa, arguably, has not shown

any visible sign of abetting rather it has

increasingly and pervasively doubled in absolute

terms. It is against this backdrop that the article

seeks to critically investigate the nature and

impact of globalization on Africa as it relates to

the vexed question of poverty. Using the

‘dependency theoretical construct’ as the most

relevant explicatory framework, the paper

maintains that the very trend of economic

globalization has widened the margins of

poverty in Africa. Nevertheless, the situation is

not intractable; thus, the paradigm and

economic philosophy of ‘state-assisted

capitalism remains the key to economic progress

for Africa in the main.

Keywords:

Globalization, Laissez faire capitalism, Poverty,

Economic liberalism, Development, and Growth

Introduction

The Keynesian development approach before the

close of the 1970s, obviously, was the dominant

alternative to economic growth and

development. Keynesianism, as a state-assisted

brand of capitalism, became the basis of

economic management in almost every emergent

capitalist fashioned economy in Africa before

the close of the 1980s, (Toyo, 2000). Thus, the

sate machinery could deem it justifiable and

timely to intervene in the open market economy

to ensure equity, fairness, and mitigate the

would-be contradictions and excesses of market

capitalism. To Keynesians, the centrality of

‘state activism’ in the economy would

checkmate the growing imbalances, and secure

the material survival of the proletarian masses

from the often predatorily forces inherent in the

practical rein of Smithian capitalism, (Sachs and

Andrew, 1995). Thus, the economic ideology

sees the ownership and management of the

economy jointly run by the state and the private

sector for the essence of ‘public good’ and for

‘profit and investment’ respectively. The state

machinery, oftentimes, takes supervisory and

regulatory posture when the drive for profit and

Page 2 of 14

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 06

July 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 372

capital expansion may translate into economic

severity for the masses or proletarian classes.

Undeniably, several economic development

plans and management practices of most

emergent but capitalist fashioned African

economies bore these imprints of Keynesian

economic philosophy before the close of the

1990s. Policy actions like state funding of public

amenities, subsidization of primary sectors

(agriculture and minerals subsectors), and open

market regulation through price legislation are

some of the indices that characterized this

economic agenda. No doubt, ‘state-assisted

capitalism’ guarantees economic security to the

proletariats and the poor classes which would

have been ordinarily eroded by the free rein of

market capitalism and its fetishism. In other

words, the state takes the welfare of her citizens

as key to economic prosperity.

However, the event of ‘global recession’ that

followed in the late 1970s and the 1980s,

precipitating severe economic strains globally

and the developing economies being the hard

hit, almost proved the Keynesian alternative

ineffectual in the face of harrowing economic

crisis that ensued. There was growing and

continuous economic failure. The state started

receding from its position of being a ‘regulator’

and ‘driver’ of development. As Rostow

(1986:116) puts it, “the state could not save the

market and the masses”. Thus, to prevent further

economic decline and avert imminent collapse

of the global economy, a ‘new orientation’

surged out with every imprint of economic

liberalism embedded in Smithian capitalist logic.

This new orientation, going by the trajectories of

industrial capitalism, is christened globalization.

In other words, Keynesian logic anchored on

‘economic nationalism’ is supplanted by ‘market

liberalism’ infused in the current terrain of

‘economic globalization’.

The central aim of economic globalization is to

see to the integration of every national economy

into one homogeneous global economy: global

village, in the words of Gordimier (1998), where

private capital and investments, not the state, is

the main driver of the economy. For

globalization apologists, the implementation of

trade liberalization policy by national economies

especially those of the developing nations,

competitive free flow of goods, investments and

capital where the state regulatory capacity is at

its barest minimum would increase global

production, consumption, technology spread,

and stimulate meaningful employment globally.

This, as they claim, would end ‘global poverty’

especially in the developing nations. This is the

message of economic globalization.

Nevertheless, Africa is not left out in this

crusading zeal and message. Globalization has

come to impinge on African development

agenda. Stiglitz (2000:91) observes, thus:

Since the 1990s almost every

national economy in Africa has

fashioned her economic

Page 3 of 14

Journal for Studies in Management and Planning

Available at http://internationaljournalofresearch.org/index.php/JSMaP

e-ISSN: 2395-0463

Volume 01 Issue 06

July 2015

Available online: http://internationaljournalofresearch.org/ P a g e | 373

development agenda on the

radar of market orientation and

western neo-liberal tradition.

Gleaning from several

development strategies and

economic practices such as

trade liberalization,

privatization, market

competition, de- subsidization

and commercialization of key

sectors of the economy are

becoming much more fancied

ideals than state–directed

economic operations which they

have mere tangential influence

in, and no control of.

From the above observation, it would not be

probably out of order to conclude that Africa has

been craftily integrated into the ‘western-led

mainstream capitalist global economy’. Africa

cannot shy away from this bourgeoning

phenomenon especially as it concerns the

question of poverty; and perhaps, may not

remain outside its trajectory. Therefore, this

study is poised to investigate, from a theoretical

point of view, how the terrain of economic

globalization affects poverty in Africa.

However, this cannot be done effectively

without clearer understanding of the two

conceptual variables: globalization and poverty.

Conceptual Clarifications:

Globalisation

Globalization and what it is associated with is,

oftentimes, very not easy to define. Its basic

character and reach show it is a

multidimensional phenomenon. It cuts across the

political, social, economic, cultural and

psychological spheres. It is a concept, an

ideology, and a process. Olayode (2006:18)

posits that ‘globalization is a process of

intensification of economic, political and socio

cultural relations across international

boundaries’. In other words, globalization could

be likened as a force rapidly molding the world

into a shared social space by economic and

technological waves, and where any

development in one region of the globe would

invariably have profound consequences for the

other parts of the globe. Khor (2001) also, states

that ‘globalization is aimed at transcendental

homogenization of political, socio-economic,

cultural practices universally’.

However, this broad definition may not be

adequate to address the kind of clarification we

set out to do in this study. Having recognized

that globalization, in its terrain, cuts across

almost every human endeavour, it will be

specifically defined in this study from the

economic point of view. Thus, our concern here

is to see globalization as an economic activity

and process (economic globalization). To this

end, Tandon (1998:5) defines globalization as

the increasing breakdown of trade barriers and

integration of different national economies into

one world market economy. Thus, it implies

aggressive trade liberalization and

homogenization of economic practices globally.

For Ohiorhenuan (1998:36), “globalization is

sustained by ‘commerce’ and ‘communication’.