“A river that forgets its source will soon run dry.” — African Proverb
Last week’s news that the US government has effectively become one of the largest shareholders in Intel Corporation is more than a financial headline. It is a watershed moment in global economics. By strategically converting $8.9 billion in grants into equity, the U.S. has moved beyond rhetoric and into a new era of strategic state-capitalism. This isn’t a bailout; it’s a deliberate, calculated move to secure national interests.
This action represents a dramatic departure from long-held free-market principles. This marks a transition from a passive government policy to a more proactive approach in managing the economic environment with the aim of enhancing national resilience. But to view this solely through an economic lens would be to miss the larger point. This is a definitive geopolitical signal fire.
Geopolitical Factors
The U.S.’s actions go beyond providing subsidies to domestic companies; they represent a measured response to evolving global power dynamics. For several years, China has directed substantial investment toward achieving technological self-sufficiency, particularly in the semiconductor sector, with the goal of reducing reliance on Western technology. This development is regarded not only as economic competition but also as a strategic challenge to U.S. leadership in technology and national security.
In this context, Intel is not merely a company; it is a strategic national asset. As the only U.S.-based firm engaged in both leading-edge chip research and manufacturing, its health is inextricably linked to American technological supremacy. The U.S. government’s investment is a pragmatic acknowledgment that in today’s world, critical industries like semiconductors, AI, and quantum computing are not just tools of innovation—they are weapons of influence.
Recent developments indicate a transformation in the international landscape. The proliferation of state-capitalism has resulted in global politics being shaped more by national security priorities than by traditional market forces. There is an observable trend towards greater economic containment and competition, with instruments such as subsidies, equity investments, and export controls becoming increasingly prevalent.
The Imperative for Africa: From Spectators to Actors
This development presents a valuable opportunity for African leaders, policymakers, and entrepreneurs to thoughtfully evaluate their strategic approaches. The experience of the U.S. and Intel exemplifies the importance of active engagement in a multipolar world; passivity is not a viable strategy. Genuine sovereignty requires deliberate effort and consistent protection.
Frequently, discussions surrounding African “economic independence” often persist despite ongoing dependence reliance on foreign aid, commodity imports, and extractive partnerships, which do little to build strong, self-sustaining domestic economies. This period presents an opportunity to reassess such frameworks. In this context, I previously explained early this year that “President Donald Trump is a blessing in disguise for Africa”. For African states to attain authentic recognition internationally, it is essential to view their private sectors not as adversaries, but as crucial partners in the pursuit of sovereignty.
So, what does this mean in practice?
1. Restructuring the Private Sector: African SMEs, especially in foundational sectors like technology, agriculture, and clean energy, must be seen as the pillars of national resilience. They are not just market players; they are the architects of sovereign capability.
2. Building Functional Capital Markets: Sovereignty requires ownership. There is an urgent need to develop deep, liquid, and accessible local capital markets that allow domestic savings to be channelled into domestic businesses. Citizens must have the means to invest in and own the engines of their own economy.
3. Learning from Asian Model: The development trajectories of Asian states like China, South Korea, Singapore, Malaysia, Vietnam, etc. offer invaluable lessons. Their governments strategically partnered with their private sectors, treating companies like Samsung, Hyundai, and Huawei as co-architects of national champions. This was not left to the market alone; it was a deliberate, state-supported strategy. Most importantly, the Asian countries created special economic zones that actually worked because they were performance-driven, export-oriented, and tightly monitored.
Learning from Past Failure
It would be inaccurate to assert that African states did not adopt elements of the Asian model of state-led development following independence. Prior to the 1990s—when many African countries joined the Structural Adjustment Programmes (SAP) promoted by Bretton Woods institutions and shifted focus towards privatization and trade liberalisation—governments frequently engaged in co-investment within private enterprises, particularly in sectors such as textiles, food processing, and energy. However, these initiatives often yielded limited success.
The primary reason for these shortcomings is that State-led Development initiatives have often failed to transform the extractive attitudes, institutions, and structures established during the colonial era. Additionally, such efforts are frequently undermined by persistent issues including political interference, corruption, lack of clear performance metrics, and the use of state-owned enterprises as tools for patronage rather than economic growth. These practices continue to be observed in various African governments today. The essential insight is to focus on building an effective, performance-oriented government that allocates resources strategically and smartly, rather than simply increasing investment.
Conclusion: Forging Our Own Path
The decision by the U.S. government to convert grants into equity in Intel, although it may seem like an isolated event, but its ripple effects are global. It underscores the increasingly close relationship between economic power and national security. For Africa, this is not a moment to watch from the sidelines, but it presents an opportunity to move beyond passive observation and engage in purposeful, strategic involvement.
By making strategic investments in our own critical industries and empowering our private sector through enabling policies and capital, we can ensure that the source of our economic river remains vibrant and our own. The world is not waiting. It is time to build, own, and secure our collective future. However, the lesson is not only to encourage strategic investment, but to redesign it direct by accountable and responsible government intentional to address the needs of its citizens. In this regard, the fitting approach must be transparent, governed by independent professionals, and focused on clear, commercially viable outcomes that serve a national strategic interest. It is all about being a savvy, demanding shareholder, not a meddling owner.
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