Recent years have witnessed an abundance of critical political economy research on rent, rentiers and rentiership. This scholarly interest reflects a recognition that global capitalism is increasingly dominated by accumulation through the control of scarce rent-generating assets rather than productive activities. This shift has been enabled by processes of ‘assetisation’ through which an ever-expanding range of things, from natural resources to intellectual property, are transformed into financial assets from which rental income can be extracted.
These tendencies are captured by the concept of ‘rentier capitalism’, popularised by geographer Brett Christophers in his recent book of the same name. To date, rentier capitalism has primarily been associated with highly financialised post-industrial contexts in the OECD. For example, Christophers argues that the entire UK economy has undergone a process of ‘rentierisation’ as a result of neoliberal reforms since the 1970s, and that rents are now the primary basis of growth in the world’s sixth largest economy.
Writing in ROAPE’s Capitalism in Africa series, anthropologists Thomas Bierschenk and Jose-Maria Munoz argue that the concept of rentier capitalism is also useful for understanding African political economy. In particular, they highlight how this concept can inform ethnographic understandings of the practices of African businesspeople and their reliance on access to political elites as a key source of rents. In contrast to alternative concepts for understanding these political-economic relationships, such as ‘crony’ or ‘patrimonial’ capitalism, Bierschenk and Munoz observe that rentier capitalism is less normative and is not premised on the assumption that capitalism in the global North and South are somehow fundamentally different.
Bierschenk and Munoz’ argument resonates with recent innovations in urban studies that seek to bring capitalist development processes in the global North and South into comparative dialogue. As urban geographers, we draw on our own research on infrastructure megaprojects in Ghana and Kenya to demonstrate that the concept of rentier capitalism can generate insights into the dynamics of urbanisation in Africa. In particular, we contend that these projects have hastened urbanisation processes in historically rural areas. This is a direct result of infrastructure initiatives creating opportunities for the assetisation of land and the appropriation of rents by various actors. Building on Bierschenk and Munoz’ anthropological focus on the agency of African businesspeople, we show that urban rentiers include actors situated at a range of scales, from global real estate developers to local land speculators. In addition to broadening the scope of actors engaged in rentier activities, our analysis explains how rentierism is incentivised by development regimes whose stated purpose is to augment industry.
The class politics of urban land rent has been a central concern of Marxist urban geography for nearly half a century. Neil Smith’s theory of the ‘rent gap’, first proposed in 1979 to understand gentrification in US cities, has become widely used to understand uneven development at the urban scale in diverse contexts globally. In his 1982 masterpiece The Limits to Capital, David Harvey observed the capitalistic tendency for land to be treated as a ‘pure financial asset which is bought and sold according to the rent it yields’, anticipating subsequent debates around the financialisation of urban development.
The early 21st century saw calls from postcolonial scholars to shift the geographical focus of urban theory production away from the North Atlantic cities in which Harvey and Smith formed their concepts. In the context of this Southern shift in urban theory, there is now a growing body of research that employs and extends land rent theory to examine how practices of rentiership are shaping urbanisation dynamics in Asia. For example, geographers Helga Leitner and Eric Sheppard draw on Antonio Gramsci and Stuart Hall to develop a multi-scalar ‘conjunctural’ approach to comparing urban land transformations in Jakarta and Bangalore. Arguing that these transformations are shaped by the dialectical relationship between the general and the particular, they propose the concept of ‘inter-scalar chains of rentiership’ to analyse ‘how the assetisation and financialisation of land emerges from a diverse set of actors and instututions, operating at scales ranging from the global to the local, each seeking to appropriate land rent’. In sum, studying the rentier practices of actors operating at various scales can inform a conjunctural analysis of urban change under conditions of global capitalism.
In our recent ROAPE paper on infrastructure megaprojects in Ghana and Kenya, we demonstrate that inter-scalar chains of rentiership is a useful concept to understand the relationship between rentier capitalism and urban geography in Africa. In particular, this concept reveals how grand initiatives to enhance infrastructural connectivity and foster structural transformation have ultimately created opportunities for land rent appropriation by actors operating at global, national and local scales. This has resulted in what urban scholars refer to as “extended urbanisation,” which is best characterised as the urban transformation of historically rural and isolated places (rather than the growth of cities). While cities remain centers of gravity in urban networks, an emergent geography is taking shape that includes urbanisation on resource frontiers and along transportation corridors. In contrast to the geographical expansion of cities, extended urban landscapes commonly cohere into transnational urban agglomerations.
In the case of Ghana, the Economic Community of West African States (ECOWAS) is coordinating the ongoing Abidjan-Lagos Corridor (ALC) initiative to upgrade the coastal road network that connects the country to Cote D’Ivoire, Togo, Benin and Nigeria into a 1000km six-lane highway. Funded by the African Development Bank (AfDB), the Corridor is primarily intended to enhance regional integration and trade and enable the growth of labour-intensive industry. For example, the project is intended to complement Ghana’s national strategy to achieve structural transformation through ‘industrialization especially manufacturing, based on modernized agriculture and sustainable exploitation of [the country’s] natural resources’. However, manufacturing value added as a proportion of GDP has remained stagnant since the ALC was launched in 2014.
Although the ALC initiative has had scant impact on Ghanaian industry to date, it is clear that the planned highway is already creating opportunities for rentiership by actors operating at multiple scales. The resulting construction boom is contributing to the emergence of a transnational ‘mega-city region’ of 30 million inhabitants along the West African coast. For example, a master-planned new city is currently being constructed on the route of the highway in the rural district of Ningo-Prampram 50km east of central Accra. This public-private partnership has created opportunities for rent extraction by Brazilian real estate capital through the construction of ‘affordable’ housing units. National political actors have also been accused of engaging in illegal land grabbing and leasing in the project vicinity. In addition, local traditional land custodians have taken advantage of rising land values to enrich themselves, leading to resentment and resistance from dispossessed indigenous youths.
In the case of Kenya, the launch of the Vision 2030 national development strategy in 2008 has seen the government embrace investment in large-scale connective infrastructure as a central pillar of achieving social and economic modernisation. Vision 2030 flagship projects include the Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET) that seeks to enhance both domestic and international connectivity through an extensive network of ports, highways, railways, pipelines and industrial zones. In addition, the government has invested in a series of major road building projects to transform Nairobi into a ‘world class African Metropolis’ by 2030. As with the case of Ghana, there is little evidence to date of structural transformation. The Kenyan government’s ambition was for infrastructural upgrading to foster flagship projects in agro-processing, textiles, leather, construction services and materials, oil and gas, mining services and IT related sectors. According to UNIDO, however, manufacturing value added as a proportion of GDP decreased from 10.4% in 2011 to 8.5% in 2020.
Although infrastructure projects have not catalyzed structural transformation in Kenya to date, they did precipitate a real estate boom. For example, international developer Rendeavour is building a 5,000-acre private new city close to the Chinese-financed and constructed Superhighway that connects Nairobi to the town of Thika in Kiambu County. Rendeavour lease plots to commercial developers and individual homebuilders within a master-planned enclave that boasts secure land title, reliable infrastructure and services, and special economic zone status. Road building has also benefited national political elites, and the decision to expand Nairobi’s Eastern Bypass was allegedly influenced by former president Uhuru Kenyatta’s plans to build another new city on 11,800 hectares of land owned by his family. At a smaller scale, wealthy Kenyans are participating in the assetisation of land by building highly profitable tenement housing in areas serviced by Nairobi’s new roads, such as the Mathare Valley informal settlement. In addition, local speculators have taken advantage of peri-urban road building to acquire large parcels of agricultural land and subdivide them into plots of highly valuable real estate.
These examples demonstrate that the concepts of ‘rentier capitalism’ and ‘inter-scalar chains of rentiership’ are useful tools for analysing the emergence of new urban geographies in Africa. Infrastructure-led development is primarily justified in terms of catalysing economic development and structural transformation by addressing Africa’s ‘infrastructure gap’. The infastructure megaprojects discussed above remain a work in progress, and our research does not rule out the possibility that such initiatives will contribute to industrialisation in Africa in the future. However, Tom Goodfellow observes that many African countries are characterised by political-economic incentives, such as weak property taxation and poorly enforced planning regulations, that encourage speculative investment in real estate rather than productive activities.
The cases of Ghana and Kenya suggest that unless this incentive structure is addressed, large-scale infrastructure projects are likely to encourage rentiership, and contribute to further urbanisation without industrialisation. Indeed, in many instances the announcement that a large-scale infrastructure project is planned is enough to precipitate a flurry of land speculation as investors big and small flock to secure assets in anticipation of future rents. Thus, rentiers appear on cue in proximity to large-scale infrastructure projects, while investment in capital goods and manufacturing is rarely so forthcoming. Instead, industrial transformation remains a long-term objective that is perpetually postponed.
If capital that could be used to boost industrial capacity is used for speculation in land, then it stands to reason that urbanisation is taking place at the expense of industrialisation. The implication is that policy makers should discourage rentierism, and instead incentivise productive investment. Here we follow Franklin Obeng-Odoom who argues that constraining the power of the rentier by socialising and redistributing land rents is necessary to addressing inequalities and achieving inclusive urban development in Africa. For example, Ambreena Manji and Jill Cottrell Ghai advocate land value taxation as a progressive tool to fund affordable housing construction in Kenya. However, previous studies have found that powerful landowning elites, such as those discussed in the examples above, are an obstacle to effective land value capture policies. If policy initiatives to socialise and redistribute land rents are to be successful, therefore, they must be accompanied by political movements to challenge the vested interests that benefit from rentier capitalism in Africa.
This article was first published by ROAPE.