Transnational Corporations and Urban Development

Abstract

Transnational corporations (TNCs) in Africa play significant roles in controlling utilities, privately appropriating common resources, and planning urban space. On the one hand, the extralegal powers of TNCs are legitimized with patronizing discourses about the incompetence of African nations in managing their own affairs and with the specter of a “resource curse” that supposedly immobilizes the self‐governing capacities of Africans. On the other hand, TNCs arrogate to themselves statutory municipal power, ignore or manipulate various channels of accountability, and privately appropriate sociallycreated rents. Some critics of TNCs propose a withdrawal from globalization or greater regulation to limit the power of TNCs. But protectionist or isolationist approaches are entirely mistaken and further undermine the social management of the commons in Africa. Instead, Africans should seek directly to break the chains of monopoly and oligopoly, especially over natural resources. They should also strive to use land for the common good and to systematically build social states in Africa to overcome subservience to TNCs. While previous attempts at autonomous development in Africa have sometimes led to military action by former colonizers and current neo‐colonial imperialists, recent evidence from Africa suggests that such a strategy might succeed now. This article proposes to extend the politics of urban reform in the Gilded Age and Progressive Era in the United States to contemporary Africa. In doing so, it shows how African cities today are working to create local capacity by municipalizing services that have been privatized, such as distribution of water. Despite many obstacles posed by TNCs and their home governments, Africans are making great strides to overcome the enduring legacies of colonialism.

The African Continental Free Trade Area

“…There are important differences, notably the absence of military power to coerce African governments to do the bidding of foreign governments and their private enterprises. (For a comparison with Western neo‐colonialism, see Obeng‐Odoom (, 2019)). Nevertheless, critics have tagged Chinese policy as “the new scramble for Africa” ( Economist ).…”

“…AfCFTA says nothing about existing monopolies and monopolistic competition, thus indirectly endorsing the process of centralizing and concentrating capital. As urban development extends onto marginal lands, rents in the prime areas could become even higher, leading to further sprawl, encroachment on urban farms in the peri‐urban spaces, and other problems such as longer commutes (Obeng‐Odoom , , 2019).…”

Executive compensation and firm risk after successful mergers and acquisitions in Africa

“…Contrary to the claim by Williamson (), we support the call to regulate and hold MNCs accountable. There is the need to strengthen the legal systems instead of allowing it to be used as a tool of the MNCs (Obeng‐Odoom, ). Hence, in line with Obeng‐Odoom (), African governments, with support from the international regulatory institutions, need to develop local content policies that can dissolve monopolies, diffuse prosperity throughout the economy, and create healthy environment to promote impact investing.…”

Oil Cities in Africa: Beyond Just Transition

“…The attempts to address such questions have been numerous. The resource curse literature in its various forms is voluminous, as many analysts have noted (Obi 2009; Obeng‐Odoom 2014, 2018; Andrews and Siakwah 2021). Marxian alternatives have also been put forward (Nwoke 1984a, 1984b, 1986; Fine and Rustomjee 1996).…”

“…The conditions for the turn to markets also cast doubt on the claim that transnational corporations (TNCs), the paragons of markets, are the best vehicles for social and democratic transformation, as new institutional economists tend to claim. (For a discussion, see Obeng‐Odoom [2018]. )…”