ASSIGNMENT 01

APC2602

KADZINGA KUDZAI CHIDO

12581003

SEMESTER 2
QUESTION

Coloniality has affected how markets operates. Write an essay in which you
discuss the current “coloniality of markets and new scramble for Africa” deeply
manifests and is embedded in how multinational corporations drive the economy
of African states. In your essay select a multinational corporation as an example
operating in an African state and critique its relevance within the selected state.

since the colonialism of Africa, African markets have been dominated by western
countries through multinational corporations such as nestle, Unilever, Kellogg’s, total
energies, American Swiss to mention just a few. This has been seen and described as
the coloniality of markets and scramble for Africa. The phrase “coloniality of markets
and scramble for Africa” is often referred to the ongoing dominance of western
economic systems and corporations in Africa sustain unequal power dynamics and
exploiting the African continent’s resources. Multinational corporations (MNCs) have
become the driving force or rather the backbones of African economies as local markets
and governments rely on them. (Department of political science, University of South
Africa, 2020) Defines MNCs as a corporation that invests in other countries for a variety
of reasons to have access to a foreign market, to secure foreign sources to supply or to
have the benefit of lower cost production of lower taxes. As the MNCs settle in African
countries, they are not the only ones that benefit but the country as well does benefit
which will be further explained in the essay. This essay aims to discuss how the current
coloniality of markets and new scramble of Africa deeply manifests and is embedded in
how multinational corporations drive the economies of African states. The main focus of
this essay will be on Nestle as an MNC operating in Zimbabwe an African state
critiquing its relevance within the country and also briefly look into its benefits to the
country.

Nestle is a Swiss based food and beverage MNC that have operated in Zimbabwe since
1958. nestle has managed to perpetuate colonial power dynamics in various ways
within the country by exploiting its natural resources while maintaining control over the
value chain.
Firstly, nestle as an MNC in Zimbabwe has exerted its dominance within the market as
it owns a large share in the food and beverage market. This has limited many
opportunities for local competitors as they fell to satisfy the market with their products as
stated in (Zinyama, 1989). Due to it being an international brand it easily attract clientele
easily as it focuses more on packaging and distribution living few room to the local
completion to thrive as they focus more on manufacturing and value addition. Nestle
also deliver products that are more premium and organic on the market which appear
as highly priced to an extent that the low income Zimbabweans has limited access to
the products. This thereby show that nestle mainly focuses making higher profits than
the local competitors.

Secondly, nestles operations in Zimbabwe have limited local ownership. Its involvement
in Zimbabwe is largely foreign owned as it falls under the East and southern African
Region (ESAR). this limits local control and decision making as it often engage in
transfer pricing profit shifting strategies that minimizes its tax obligation to the country.
(Iyanda, 2021) Claims that this limits the country to a much needed revenue for public
services and development of infrastructure. this further results in lack of investments in
education, healthcare services and social welfare which result in a low development
index which also hinders the ability of African states to address their own economic
challenges making them to rely more on international funding.

Furthermore nestle has zero regard to cultural preferences in terms of dietary habits
and the need for social equality. Due to cultural diversity in Zimbabwe cultures to differ
thereby there are quite a number of food laws. In some cultures they do not consume
animal products whereby nestle produces some products containing animal products
such as milk, eggs etc. that are mostly consumed by a few thus creating a preferred
market. In some cultures (Ansah, 2019) states that due to the control the MNCs have
politics they disregard culture and enforce their own ways to African states due to the
desperate need of investments in African countries.

Additionally nestle has been engaging in certain practices that worsen social
inequalities in Zimbabwe. As it has expanded international ownership it employs a few
local highly skilled labor and it employs more low skilled labor of which it is
undependable but somehow relies more on it. This leads to a dualistic labor market,
whereby only a small number of elite’s benefits from the corporation while the majority
of the population remains marginalized and in poverty as stated in (Lupton, 2018).

Moreover, nestle as an MNC have significantly formed a strong political influence in

Zimbabwe. Through its influence it can exert pressure on the national government to
shape its policies in its favor. (Games, 2011) States that this can result in preferential
treatment, tax incentives and relaxed regulations which further entrenches the power
dynamics between the corporation and the country. This is mainly the result of
desperation of foreign investment by the local government thereby creating a dynamic
mirror that mirrors the historical relationship between colonizers and the colonized
whereby the interests of the colonizers took presence over those of the colonized.

Lastly, nestle has caused major environmental concerns throughout Zimbabwe. Nestlé’s
manufacturing processes and packaging have environmental implications such as
waste generation and water usage. (Green Digest, 2024) claims that company
withdraws a considerable amount of water over 36% of which comes from water
stressed areas and its raw materials of palm oil, cattle products, cocoa, soy, coffee,
sugar, timber and others for its production comes from millions of hectares of land that
is being used has resulted to environmental hazards such as deforestation, water
scarcity, soil degradation and biodiversity loss. This corporation’s manufacturing and
packaging processes also generates millions of tons of waste annually. During the time
period of 1980 to 1990 nestle contributed to the major deforestation and woodland
degradation in the country in its bid to expand arable land and the extreme need of
wood fuel. This greatly impacted the country as it suffered a major environmental loss
that has been unrecoverable up to date.

In conclusion, the current “coloniality of markets and new scramble of Africa” is deeply
manifested and embedded in how multinational corporations such as nestle drive the
economy of African states such as Zimbabwe. through its exerted dominance within the
market, limited local ownership, zero regard to cultural preferences, practices that
worsen social inequalities, formation of strong political influences and ignored major
environmental concerns nestle has proven the continuance of the colonial legacy of
exploitation and economic dependency. Therefore it is crucial for Zimbabwe to critically
assess the relevance of Nestle within its economy and strive for more fair and
sustainable economic models that prioritizes the wellbeing and development of its own
people.

References
Ansah, M. L., 2019. The influence of national cultureon organizational culture of multinational
companies.

Department of political science, University of South Africa, 2020. Political economy of Africa. Pretoria:
University of South Africa.

Games, D., 2011. Multinationals and foreign investment in Zimbabwe: A development and human rights
perspective in Zimbabwe. New York: Palgrave macmillan.

Green Digest, 2024. What is the impact of the world,s largest food company, s.l.: Green digest.

Iyanda, O., 2021. The impact of multinational enterprises on employment, training and regional
development in Namibia and Zimbabwe, Mutare: Africa University.

Lupton, N. J. E., 2018. national income inequality, society and multinational enterprises. Geopolitics and
strategic management in the global economy, pp. 219-241.

Zinyama, L., 1989. Localisation or socialist transformation in Zimbabwe's manufacturing sector.

Multinational disinvestment, September, 21(3), p. 7.