Ilias Alami
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‘Afro-pessimism’ and emerging markets finance

This chapter takes as its starting point a 2012 cover of The Economist with the headline ‘Cry, the beloved country: South Africa’s sad decline’. This cover conjures up a powerful racialized imaginary which connects contemporary emerging markets finance to histories of colonialism and empire. Indeed, by depicting a mob of angry Black men armed with pikes, the cover suggests that the ‘sad decline’ in question (a deep socio-political and financial crisis, credit rating downgrades and large-scale financial capital flight) is due to threatening, uncontrollable and violent masses of Black people. I bring this cover into conversation with a number of quotes from interviews that I conducted with state and private actors in South Africa. I show that what those actors call ‘Afro-pessimism’ – a reference to the remarkable timorousness of international investors in South Africa – is a manifestation of the processes of ‘othering’ and racialization through which South Africa and other sub-Saharan African countries have been discursively constructed as investment destinations. I use the cover and the interview quotes to discuss how relations of race and coloniality are reproduced through the production of financial knowledges and patterns of financial capital flows, with material consequences for the people living in the spaces construed as African emerging markets.

In October 2012 the prestigious business magazine The Economist ran a cover story on crisis in South Africa. The Economist's editors and writers undoubtedly knew that the situation in South Africa at the time (a deep socio-political and financial crisis, credit rating downgrades, foreign investment drying up and so on) was due to a complex entanglement of social, economic and political factors. 1 As such, they could have chosen many other visuals to illustrate the crisis. But with this sensational depiction of a mob of angry Black men armed with pikes, the cover seems to attribute the responsibility for ‘South Africa's sad decline’ to uncontrollable and aggressive (if not violent) masses of Black people. Note that the picture is completely decontextualized. There is no caption or other form of explanation. Nowhere is there any mention that these men were miners protesting the shooting by the police of thirty-four of their fellow workers at Lonmin's Marikana platinum mine in August 2012, in the context of wildcat strikes against extreme forms of economic exploitation and over-indebtedness. Shouldn't these contextual elements matter? How do images like this contribute to the discursive construction of South Africa as a particular type of investment destination? How do South African officials and investors respond to these kinds of images and discourses? In this chapter I bring The Economist's cover into dialogue with key informants from my fieldwork in Pretoria-Tshwane, and explore what those actors call ‘Afro-pessimism’. I show that relations of race and coloniality are reproduced through the production of financial knowledges and patterns of financial capital flows, with material consequences for the people living in the spaces construed as African emerging markets.

Figure 10.1 October 2012 cover of The Economist depicting protest in response to the shooting of 34 mineworkers at Marikana in August 2012, labelled ‘South Africa's sad decline’.

(Mis)representing the crisis in South Africa

In late 2016, as I was conducting fieldwork on policymaking and emerging market investment in Pretoria-Tshwane, South Africa, a Treasury official told me at interview:

We [South African state managers] have to demonstrate to the world … that an African country is capable of running its own macroeconomic policy … It's all about perception and confidence, which is why race matters … This is also linked to the decolonial element of our transition [to democracy] … we became independent very recently [referring to the end of apartheid in the early 1990s] … so [to] people in London and the US [international investors] … we are still unknown [in the sense that] people don't know whether South Africa will become like Zimbabwe or the Congo … these are real factors. So there has been a very strong desire to demonstrate that we are credible […]. [All emphases added]

Another key informant made a similar point:

Capital is pretty racist in the way it deals with a Black government … that relationship is always extremely difficult … hence the cautiousness of the government not to do anything wrong because the reaction to whatever happens in South Africa is always very strong, more than what would happen in other [emerging] countries … The sensitivity of international investors to whatever happens is extreme, and therefore the consequences for South Africa would be different than for another country in the same conditions [referring to non-African emerging markets]. [All emphases added]

These statements establish a direct connection between histories of (post)colonialism, empire, race and the operations of global capitalist finance in South Africa. They do so in several ways. First, they suggest that the remarkable timorousness of international investors in South Africa (meaning both a certain reluctance to invest and a tendency to move their money out of the country at the first sign of perceived trouble) is due to a number of racist worldviews, namely, a visceral distrust in Black state managers and the perception of South Africa as an ‘immature’ (because recently decolonized) country that may lapse at any moment into chaos, just like some of its unfortunate African neighbours did. Put differently, the historical specificities of South Africa do not seem to matter so much as the generic image to which it is associated, that of a weak (if not failed) Black African state in the making.

Second, both informants hinted at the difficulty of building market confidence in that context, even when the most business-friendly policies, institutions and regulations are set up. They suggested that policy making in South Africa is subjected to intense scrutiny by international investors, more than it is in non-African emerging markets (EMs). Any deviation from what investors consider an orthodox policy framework, such as a laxer fiscal stance, tends to be interpreted as proof of governmental incompetence, which is likely to be severely punished by large-scale capital flight. I confess to having been quite surprised at the time by the directness of these statements. After all, their authors were policy makers in government, not critical scholars or leftist activists! Yet they clearly articulated how global relations of race and histories of (post)colonialism are implicated in the disciplining of the South African state by global capitalist finance. I was also startled by how much this phenomenon was internalized by policy makers, that is, it seemed to be completely accepted – albeit with a sense of resignation – and factored into policy decisions. This means that, whether real or imagined, it had material effects.

Both informants, as well as several others, referred to this phenomenon as ‘Afro-pessimism’. It was the first time I had heard this expression in the context of investing in EMs. The term ‘Afro-pessimism’ as used in this chapter should not be confused with US-centred theoretical Afro-pessimism, which argues that modern civil society is structured by anti-Black violence (Douglass et al. 2018). Afro-pessimism here refers to ‘the perception that “Africa” has always been and will continue to be a scary, backward and poverty-ridden place’ (Schorr 2011: 23), and therefore will forever be unable ‘to overcome pressing challenges related to poverty, health, development or governance’ (Nothias 2012: 54). Such negative representations of the continent pervade the Western and international media (Bunce et al. 2017). They consist in highly simplistic and essentialist discourses about the whole African continent, which is associated with notions of hopeless ‘Africanness’ (Nothias 2014).

The political role of Afro-pessimism

Media studies scholars have highlighted that the origins of Afro-pessimist scripts lie in colonial imaginaries of civilization and race, as well as how they contribute to the extremely poor understanding of the political-economic realities of the African continent among both Western elites and the general public (de B'Béri and Louw 2011). Furthermore, critiques of Afro-pessimism have shown that it plays a political role: it attributes the causes of underdevelopment, poverty, political instability and economic volatility to an essentially (Black) ‘African’ problem, thereby depoliticizing these structural issues. By portraying ‘Africa as being to blame for its own ills and its lack of agency’ (de B'Béri and Louw 2011: 342) and propagating ‘the idea that “Africa” is hopeless and cannot rule “itself”’ (Schorr 2011: 34), Afro-pessimism not only justifies the presence of an army of development practitioners and consultants on the continent, it also draws attention away from more structural questions of power and inequality, and the responsibilities that these might have in the plight of many African countries.

For instance, the infamous Marikana massacre was the outcome of an explosive cocktail of deeply intertwined local and global financial relations, involving local loan sharks delivering predatory forms of finance, the failure of microfinance as a national development strategy, the exploitative practices of extremely powerful platinum-mining companies deeply integrated into the globalized circuits of capitalist finance and the powerful role of credit rating agencies (see Bond 2013). These entanglements of mining finance, colonial imaginaries, extractive practices and racialized exploitation at Marikana are explored in more detail by Styve (Chapter 21). None of this is remotely hinted at by the sensationalist cover of The Economist. To be clear, I am not suggesting here that The Economist is intentionally propagating racist imaginaries. Rather, I want to ask: what does it mean that this bestselling news weekly, this ‘confidante to the powerful’ and highly influential ‘emissary for the financial sector’ (Zevin 2019), is reproducing such hackneyed Afro-pessimist tropes? Could this be symptomatic of how relations of race and coloniality structure EM finance in Africa, as my interviewees contended?

An Afro-pessimist bias in global finance?

Although there is remarkably little research on the topic, there are reasons to believe that Afro-pessimism is implicated in the operations of capitalist finance in African EMs. For instance, an influential collection of essays, Investment and Risk in Africa, tells us that ‘Africa is perceived as being atypically risky’, and that this is ‘not a reflection of normal investor caution about foreign environments’ (Collier and Patillo 2000: 3). A number of (mainstream) economic studies have found empirical evidence that sub-Saharan African countries’ credit ratings tend to be lower than is warranted by their economic fundamentals and by the ‘quality’ of their institutions (e.g. ul Haque et al. 2000; Schorr 2011).

This bias concerns not only credit rating agencies but also market-assessed sovereign risk premiums. 2 In their work on financial capitalism in South Africa, Koelble and LiPuma argue that currency markets tend to assign to South Africa ‘an abstract risk premium’ because of the particular racial complexion of the country and the alleged risk ‘posed by a Black African government on a continent where government failure is endemic’ (Koelble and LiPuma 2006: 621). According to recent studies, Black African economies pay ‘higher-than-normal’ interest rates on private sovereign bond markets in comparison to other regions (Olabisi and Stein 2015). Borrowing costs are ‘unjustifiably high’, after controlling for factors such as the credit ratings of issuers and their macroeconomic fundamentals. In other words, Black African countries are forced to pay ‘an unexplained “Africa Premium”’ for participating in international bond markets, ‘which may only be described as a penalty on African governments due to investor bias’ (Olabisi and Stein 2015: 88, 99). These findings are significant: remember that processes of risk valuation and investment decision making are supposedly driven by the rational processing of allegedly objective investment criteria such as historical volatility and financial returns, macroeconomic fundamentals, an investor-friendly policy framework, strong institutions, political stability and so on (at least according to mainstream economists and financial investors). Yet, these studies indicate the existence of a bias against Africa in global finance, which affects the pricing, amount and quality of the financial capital that African countries receive.

This bias, though, is rarely explained. To the best of my knowledge, only one study tackles the question head on, and attributes this bias to ‘the constructivism of Afro-pessimism’ (Schorr 2011). Schorr argues that negative stereotypes of Africa in Western media and society shape the decisions of investors, and overall hamper the continent's ability to attract investment. This argument, importantly, sheds light on how Afro-pessimism shapes global (dis)investment to African markets, but it is ultimately unsatisfying. It essentially tells us that all that is needed to rectify this bias is to change unfairly negative perceptions, presumably by educating investors about the realities of the continent and by propagating more positive views of Africa. This argument tends to portray finance as a benevolent force which is merely impaired by ‘bad’ (racialized) representations, neglecting the role that finance has played in the brutal histories of extraction, exploitation and dispossession in Africa, from slavery to modern colonialism, high imperialism, the Third World debt crisis and so on (see Alami 2019a). If Afro-pessimism indeed contributes to the harsh disciplining of African states and to the extraction of wealth (under the form of an interest rate premium), then attributing these power-laden processes to a simple matter of (mis)representations seems unconvincing at best.

Towards a critical theory of Afro-pessimism in EM finance

In the remainder of this chapter, I want to gesture towards a radically different type of explanation, one that draws an explicit link between Afro-pessimism in EM finance and the deeply racialized power relations that structure global finance. The concept of racial capitalism is particularly relevant here. Several chapters in this volume engage with racial capitalism, including those by Medien (Chapter 7) on the entanglement of postcolonial migration, predatory lending and racialized borders, by Randell-Moon (Chapter 14) on racial imaginaries that animated settler colonists’ exploitation of land and country in Australia and by Bhattacharyya (Chapter 22) on visualizing (alternatives to) racial capitalism. Here, I engage with racial capitalism in relation to the entanglement of colonial histories, racialized imaginaries and the processes underpinning cross-border capital flows. Let me explain: investment in EMs requires a process of discursive social construction whereby territorial objects – in this case, Black African countries – are transformed ‘into specifically geographically bound investment categories’ (Bassens 2012: 342). Afro-pessimist (and Afro-euphoric) myths and fantasies play a key role in this process. In particular, they operate as a specific ‘mode of constructing investibility’ for private financial capital (Tilley 2018). These imaginaries help to firmly locate African EMs at the bottom of the hierarchy of global financial relations, maintaining a sharp distinction with the ‘superior’ advanced West/North (considered the apex of financial modernity). Importantly, this process relies upon the production of racialized difference and, in particular, the construction of sub-Saharan African countries as the geographical embodiment of unruly Black populations and exotic wilderness. This fiction of embodied otherness creates a particular regime of desires and affects scripted for a (largely white) audience of international investors. On the one hand, African EMs are represented as a seductive and wild geographical frontier available for conquest, exploration and handsome financial profit opportunities for the courageous ‘investor/explorer’ (Sidaway and Pryke 2000). On the other hand, they are portrayed as a source of unpredictability and continued anxieties, given the immutable threat that potential investment earnings may be disrupted by rebellious populaces (Gilbert 2018).

This particular regime of desires and affects influences how financial prospects are assessed in African EMs, which is reflected in how financial actors, often located in world financial centres such as the City of London, evaluate the riskiness and desirability of their assets (Alami 2019b). Indeed, the assets of African EMs, such as sovereign bonds, tend to be attributed remarkably high risk/reward ratios. Afro-pessimist representations of EMs as highly risky provide some justification for demanding high financial returns. Put differently, they contribute to sustained processes of value extraction from African countries.

The attribution of high risk/reward ratios to African assets has several implications. African EMs are acutely subordinated to ‘push’ factors, such as global liquidity and market sentiment (Bonizzi et al. 2019). Growing levels of risk aversion may result in a dramatic reversal of financial capital flows, which are extremely volatile and pro-cyclical, perhaps even more than in non-African EMs. Policy making in African EMs is also subjected to intense scrutiny by international investors (as mentioned by my interviewees). Moreover, African EMs suffer from a ‘neighbourhood effect’, where risk perception in one country may largely be influenced by market assessments of other Black African economies, potentially contributing to crisis transmission. Under this configuration, the scope for implementing progressive and/or developmental policies is extremely constrained, because the social pressure and discipline that international investors are able to exert on African EMs states is remarkable.

In other words, risk valuation of African EM assets is not an unproblematic process whereby economic data is revealed, rationally processed and disseminated. It is certainly not a value-neutral technique which is somehow impaired by distorted visions of Africa. Rather, it is eminently political: the production and mobilization of racialized difference is implicated in specific constructions of risk that allow the harsh disciplining of Black African states, their continuous financial subordination and the reproduction of opportunities for wealth extraction. Afro-pessimist and -euphoric fantasies in EM finance are firmly embedded in these broader structured relations.

This tentative theoretical formulation, then, might speak to the variegated processes in which racism ‘enables key moments of capitalist development … and operates both through the exercise of coercive power and through the mobilisation of desire’, or what scholars in the Black radical tradition have called racial capitalism (Bhattacharyya 2018: ix; see Robinson 1983/2000). In this case, it is about the constitutive role that sedimented imaginaries of colonialism and empire continue to play as a means of enforcing discipline and continuous subordination, and as a means of profiting in and through capitalist finance. The Economist's October 2012 cover strips the scene of its contextual specificities. Who these men are, where they are from and what motivates their rage and indignation does not matter. What matters is that they look angry and threatening. Their existence is diluted in a generic image of a homogeneous mass of poor and unruly Black people. But we should be concerned with Afro-pessimism not simply to deliver a superficial critique of the ‘bad’ stereotypes that may influence investment decisions, but as a practice of racial capitalism, and as an entry point to articulate a systematic critique of the racialized violence that underpins the operations of financial capital. At a time when African countries are fast becoming the newest investment frontier for EM finance, the task is urgent.

Further resources

Brown, S. and Zevin, A. (2020) ‘In theory: Simon Brown interviews Alexander Zevin about the World according to The Economics’. (accessed 8 September 2022).

Gilbert, P. (2018) ‘The risks of others: Imperial nostalgia and technologies of the financial imagination’. Public Seminar. (accessed 6 August 2019).

Hudson, P. J. (2018) ‘Racial capitalism and the dark proletariat’. Boston Review, 20 February. 2018. (accessed 8 September 2022).

Schorr, V. (2011) ‘Economics of Afro-pessimism’. Nokoko, 2: 23–62.

Tilley, L. (2018) ‘Recasting and re-racialising the “third world” in “emerging market” terms: Understanding market emergence in historical colonial perspective’. Discover Society 60. market-emergence-in-historical-colonial-perspective/ (accessed 29 August 2019).

Works cited

Alami, I. (2019a) ‘Global finance capital and Third World debt’. In I. Ness and Z. Cope (eds), The Palgrave Encyclopedia of Imperialism and Anti-imperialism. Houndmills and Basingstoke: Palgrave Macmillan. (accessed 15 September 2022).

Alami, I. (2019b) Money Power and Financial Capital in Emerging Markets: Facing the Liquidity Tsunami. London: Routledge.

Bassens, D. (2012) ‘Emerging markets in a shifting global financial architecture: The case of Islamic securitization in the Gulf region’. Geography Compass 6(6): 340–350.

Bhattacharyya, G. (2018) Rethinking Racial Capitalism: Questions of Reproduction and Survival. London: Rowman & Littlefield International.

Bond, P. (2013) ‘Debt, uneven development and capitalist crisis in South Africa: From Moody's macroeconomic monitoring to Marikana microfinance mashonisas’. Third World Quarterly 34(4): 569–592.

Bonizzi, B. , Laskaridis, C. and Toporowski, J. (2019) ‘Global liquidity, the private sector and debt sustainability in sub-Saharan Africa’. Development and Change 50(5): 1430–1454.

Boy, N. (2014) ‘The backstory of the risk-free asset: How government debt became “safe”’. In C. Goodhart, D. Gabor, I. Erturk and J. Vestergaard (eds), Central Banking at a Crossroads. London: Anthem, pp. 177–187.

Bunce, M. , Franks, S. and Paterson, C. (2017) Africa's Media Image in the 21st Century. London: Routledge.

Collier, P. and Pattillo, C. (eds) (2000) Investment and Risk in Africa. London: Palgrave Macmillan.

de B'béri, B. E. and Louw, P. E. (2011) ‘Afropessimism: A genealogy of discourse’. Critical Arts 25(3): 335–346.

Douglass, P. , Terrefe, S. D. and Wilderson, F. B. (2018) ‘Afro-Pessimism’. In Oxford Bibliographies.–0056.xml (accessed 10 February 2020).

Gilbert, P. (2018) ‘The risks of others: Imperial nostalgia and technologies of the financial imagination’. Public Seminar. (accessed 6 August 2019).

Koelble, T. A. and LiPuma, E. (2006) ‘The effects of circulatory capitalism on democratization: Observations from South Africa and Brazil’, Democratization 13(4): 605–631.

Nothias, T. (2012) ‘Definition and scope of Afro-pessimism: Mapping the concept and its usefulness for analysing news media coverage of Africa’. Leeds African Studies Bulletin 74: 54–62.

Nothias, T. (2014) ‘“Rising”, “hopeful”, “new”: Visualizing Africa in the age of globalization’. Visual Communication 13(3): 323–339.

Olabisi, M. and Stein, H. (2015) ‘Sovereign bond issues: Do African countries pay more to borrow?Journal of African Trade 2(1–2): 87–109.

Robinson, C. J. (1983/2000) Black Marxism: The Making of the Black Radical Tradition. Chapel Hill and London: University of North Carolina Press.

Schorr, V. (2011) ‘Economics of Afro-pessimism’. Nokoko 2: 23–62.

Sidaway, J. D. and Pryke, M. (2000) ‘The strange geographies of “emerging markets”’. Transactions of the Institute of British Geographers 25(2): 187–201.

Tilley, L. (2018) ‘Recasting and re-racialising the “third world” in “emerging market” terms: Understanding market emergence in historical colonial perspective’. Discover Society 60. (accessed 8 September 2022).

ul Haque, N. , Mark, N. and Mathieson, D. J. (2000) ‘Rating Africa: The economic and political content of risk indicators’. In P. Collier and C. Pattillo (eds), Investment and Risk in Africa. London: Palgrave Macmillan, pp. 33–70.

Zevin, A. (2019) Liberalism at Large: The World According to The Economist, London: Verso.


1 During the COVID-19 pandemic these entanglements once again asserted themselves as international rating agencies threatened to downgrade South Africa's credit rating, placing pressure on the state to adopt austere fiscal policies and raising the cost of borrowing.
2 This refers to the difference between the interest rate on an African sovereign bond and the interest rate on a US Treasury security of comparable maturity (the latter are considered the safest assets in the world). See Boy (2014) on how certain government debts came to be treated as ‘risk-free’.
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The entangled legacies of empire

Race, finance and inequality


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