Africa’s Global Role: Trade Investment & Leadership
The G20's historic decision to grant the African Union (AU) a permanent seat at its annual summit in India last year was a long time coming, bringing with it much fanfare about the continent’s rising prominence and influence on the global stage. Indeed, since the early 2000s African leaders and Africa watchers alike have voiced concerns about the G20's lack of inclusivity towards developing and emerging markets – especially those on the continent.
However, Africa’s new seat at the proverbial table, alongside 19 “systemically significant” countries and the European Union, also comes amidst growing scepticism about the forum's relevance and efficacy. While the AU's inclusion marks progress, the core principles of multilateralism essential for the G20 to address intricate global issues and foster sustainable economic development are under pressure from all sides. Moreover, the once steadfast pillars of the post-war multilateral system, and the Pax Americana world order that propped them up, are showing signs of weakening, raising questions about Africa's role within this specific forum and, more broadly, in a world that is looking decidedly more multipolar and less multilateral.
In advance of Invest Africa’s 10th Annual Africa Debate, this insights explores Africa’s enhanced role in a world undergoing significant transformation.
From Rule-Taker to Rule-Maker
African countries have historically grappled with the hierarchical structures of the global order, inherited as rule-takers from a colonial past. Their discontent with this inherited system is not unfounded, as it has often perpetuated a narrative of Western dominance, imposing political, economic, and cultural values with little regard for African agency. This legacy of imposition, coupled with double standards and conditional support, has understandably fuelled a sense of frustration and even indignation among African states.
In recent times, however, African leaders have begun to seize upon the shifting tides of global power dynamics as an opportunity for recalibration. The waning hegemony of the West, coupled with the rise of alternative centres of influence, has empowered African countries to exercise greater autonomy in their international engagements. Rather than passively accepting predetermined roles, African leaders are more and more forging partnerships that align with their national interests and aspirations.
Furthermore, Africa's economic landscape tells a story of impressive resilience and promise since the “lost decades” of the 1980s and early 1990s when the average growth rates hovered stubbornly around 2%. Indeed, the continent has enjoyed sustained growth over the last two decades, with average GDP growth rates of 4.6% between 2000 and 2016 and 3% between 2017 and early 2020 (before COVID-19 sent markets the world over into freefall). Even in the wake of the COVID-19 pandemic, the International Monetary Fund predicts that Africa's growth trajectory will outpace that of the rest of the world in the coming years.
While challenges persist, from inflation management to trade imbalances, Africa's trajectory points towards a future of greater economic agency. With its burgeoning economic potential, the continent is poised to emerge as a pivotal player in global economic affairs, transcending its role as a passive participant to become a proactive rule-maker in global fora.
Harnessing Africa's Potential
As Africa's population burgeons and its economic prowess escalates, global leaders are awakening to the imperative of engaging more substantively with the continent. The significance of Africa's prosperity cannot be overstated; not only will robust, inclusive, and sustainable growth uplift millions from poverty within its borders, but it will also catalyse the global growth of the future.
Africa’s youthful demographic dividend is certainly a cornerstone of its competitive edge in the changing global order. While the rest of the world is aging, albeit at widely different paces, nearly two-thirds of Africa's population is under thirty and 40 percent below fourteen. This demographic dynamism not only ensures a growing young consumer market with a high propensity to consume but also provides an abundant supply of young workers for the next three to four decades. Consequently, Africa is poised to become the primary driver of global demand for consumer goods, education, healthcare, technology, and infrastructure services in the forthcoming decades, fuelling innovation and productivity on a scale unmatched elsewhere.
Africa’s global role is also enhanced by its abundance of natural resources. The continent hosts nearly 30 percent of the world's mineral reserves, including substantial deposits of gold, cobalt, diamonds, and platinum. Additionally, it boasts 65 percent of the world's arable land, making it pivotal for future food security and sustainable agriculture initiatives. Moreover, Africa's natural wealth extends to 12 percent of global oil reserves and 8 percent of natural gas reserves. This rich endowment places Africa at the forefront of the global energy transition and climate mitigation efforts, particularly in strategic high-tech industries like semiconductors, batteries, and green energy. To this end, Africa's burgeoning role in shaping these critical sectors not only enhances its standing on the international stage but also positions it as a key player in driving global economic growth and sustainability.
Additionally, Africa's strategic geographic advantage, surrounded by seas and oceans on all sides, presents unparalleled opportunities for international trade. Thirty-eight of the continent's fifty-four countries have direct access to open waters, while landlocked markets can easily connect to maritime commerce through neighbouring coastal states. This advantageous position positions Africa to strengthen its economic ties, enhance participation in global trade, and drive overall economic growth and development. Leveraging this geographical blessing, Africa can forge stronger trade partnerships with other regions, cementing its role as a pivotal player in the global economy.
Harnessing this competitive edge will require a lot of work, however, especially around regional integration, climate resilience, and deeper engagement in global supply chains. Effective policies that foster cross-border trade, bolster climate adaptation measures, and fortify Africa's position in global markets could help the continent to achieve sustained annual growth rates of 5–7 percent over the next three decades by some calculations, resulting in an African market that is 4–7 times larger by 2050. This would certainly amplify the continent’s economic stature, unleashing a wave of innovation and prosperity that reverberates across the globe.
Africa's Role in the Shifting Sands of Global Diplomacy
Africa’s enhanced role on the international stage is already evident. Throughout the COVID-19 pandemic, African countries championed the cause of equitable vaccine distribution through initiatives like the Covax facility, while also advocating for reforms in global trade regulations to ensure access to life-saving medicines. In climate negotiations, African delegates have stood impressively firm, advocating for concepts like climate justice and differentiated responsibilities to address the disproportionate impact of climate change on the continent via initiatives like the Nairobi Declaration. Moreover, Africa has been vocal in calling for the reform of multilateral institutions, advocating for a more inclusive global financial architecture and pressing for additional representation in bodies like the United Nations Security Council.
However, Africa's path towards global influence is not without obstacles. While African countries have demonstrated adeptness in conducting global diplomacy on specific issues, there remains a need to shape the underlying rules and politics of global governance. This requires a more strategic and long-term approach to engagement at the global level, which may be hindered by diverse national interests and the limited international mandate of the African Union. Furthermore, domestic challenges such as insecurity, governance deficits, and economic hardships pose significant barriers to effective continental leadership and global representation.
Still, Africa's emergence as a strategic actor is palpable, and has not gone unnoticed by the international community. Traditional and emerging global powers are recalibrating their engagement strategies, as evidenced by the proliferation of Africa-focused summits and high-level visits (China’s triennial Forum on China–Africa Cooperation, India’s triennial India–Africa Forum Summit, Korea’s Korea-Africa Summit, and Italy’s Italy-Africa Conference are just some of the global events scheduled this year, with all of them vying for the attention of Africa’s leaders). With a youthful demographic dividend, abundant natural resources, and strategic geographic advantage, Africa stands poised to emerge as a new great pole of global economic activity, inserting itself once and for all as joint rule-maker on the international stage.