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What Africa can gain from historic G20 membership
After years of lengthy negotiations and aggressive lobbying, the African Union has been admitted to the powerful G20 bloc. The historic declaration was announced at the G20’s summit in Delhi, India at the start of September, granting the 55-member bloc the same status as the European Union and other 19 leading economies like the U.S., China, Russia, and the United Kingdom.
Membership in the G20 has the potential to have a transformational change on the continent’s economic trajectory. The diverse bloc represents around 85% of global GDP, over 75% of global trade, and about two-thirds of the world’s population. It also brings together the five permanent members of the United Nations Security Council who hold that coveted veto power. Before the AU’s ascension, South Africa was the sole representative, overburdening it with the responsibilities of pursuing its economic interests and those of the other 54 countries.
“We welcome the African Union as a permanent member of the G20 and strongly believe that inclusion of the African Union into the G20 will significantly contribute to addressing the global challenges of our time,” said the summit’s final declaration. The United Nations also praised the move, highlighting the importance of including developing countries in the international frameworks established during the colonial era.
“This is a reflection of Africa’s growing influence and importance on the global stage,” said Stephane Dujarric, Spokesperson for the Secretary-General of the UN, Antonio Guterres. “When much of the existing international multilateral architecture was built, most of Africa was still colonized and did not have an opportunity to have their voices heard. This is another step towards correcting that imbalance.”
Now that the first part of the task is completed, the focus must shift to leveraging the platforms provided by the G20 to advance financial inclusion, debt restructuring, and cash flows for sustainable development.
Foreign Direct Investment
In this green transition age we are living in, renewable energy assets have become what iron was in the Industrial Revolution, or microchips in the 1990s computer development stage. Luckily, Africa is home to 40% of the minerals key to renewable and low-carbon technologies and 60% of renewable energy sources such as geothermal, solar, and wind. The Democratic Republic of Congo alone has more than half of the world’s cobalt, a metal essential for lithium-ion batteries, according to a United Nations report on Africa’s economic development released last month. In addition, the Congo Forest, widely labeled the world’s second lung after the Amazon, absorbs 1.2 billion tonnes of carbon every year, vital for offsetting strategies.
However, this immense wealth is yet to benefit Africans, evidenced by the fact that GDP per capita rates have only climbed by 1.1% in the last 30 years, compared to over 14% in Asia. Through the G20 membership, African countries can renegotiate mining deals and concessions agreed upon in the past, in much fairer terms that reflect global standards. In addition, they can use the platform to call upon developed countries to meet their commitments of providing $100 billion a year in climate financing for developing countries.
Foreign direct investment is critical for Africa to leverage upon its wealth, and policymakers must seek out more investment in value addition and processing industries in the continent, and the construction of critical infrastructure such as pipelines and railways that ease the transportation of commodities. In the future, African countries can also negotiate for Free Trade Agreements with individual members of the G20, similar to the African Growth and Opportunity Act (AGOA) currently in place with the United States of America, and the Economic Partnership Agreement (EPA) with the European Union. Collective trade pacts with Turkey, Saudi Arabia, Japan, Russia, China, and India, should be on the pipeline; and Africa will surely get a better deal negotiating as a bloc with a market of 1.4 billion people.
International diplomacy
One of the major critiques of the multilateral frameworks as they exist currently is the lack of representation of the post-colonial world, i.e. developing countries often lumped together as the Global South in diplomatic nomenclature. Membership of the G20 could kickstart this reformation process, which should now extend to other arenas such as the United Nations Security Council (UNSC) and the Bretton Woods Institutions (The International Monetary Fund and World Bank).
“It is significant for Africa to be recognized and included. What it does with this membership remains to be seen,” said Steven Gruzd, head of the African Governance and Diplomacy Programme at the South African Institute of International Affairs. “It will certainly help put African issues on the international agenda, with AU in the heart of discussions.”
However, for that to happen, African policymakers will need to harness their ideas and structures; a task made difficult by the lack of harmony over the AU’s very own rules on unconstitutional takeovers of power. Since the onset of the COVID-19 pandemic in 2020, seven African countries (Guinea, Mali, Sudan, Chad, Niger, Gabon, and Burkina Faso) have experienced military-led coups, six of whom have been suspended from the AU pending transition to civilian rule.
In addition, there are brewing differences between member countries that may lead to conflict. Egypt has continually differed with Ethiopia over the filling of its mega Grand Renaissance Dam, DR Congo has filed a case in the International Court of Justice seeking reparations over Uganda’s occupation of its lands in the early 2000’s and continues to accuse Rwanda of supporting armed rebel groups in the EAC, and Algeria has cut off diplomatic relations with Morocco, including closing its airspace.
Speaking with one voice is a prerequisite to benefiting from the G20 membership.
Reforming global financial architecture
The G20’s Finance Track has played a leading role in developing G20 initiatives that have major implications for African economies, including the Debt Service Suspension Initiative (DSSI), the Common Framework for Debt Treatments beyond the DSSI, and the Sustainable Finance Roadmap. From May 2020 to December 2021, the DSSI suspended $12.9 billion in debt-service payments owed by 73 countries, most of whom are in Africa.
With strong representation at meetings of ministers, central bank governors, and technical working groups convened by the Finance Track and Sherpa Track, the AU can play a major role in reforming the financial architecture. The compounding challenges related to climate change and public health emergencies mean the continent requires more than $1.3 trillion annually until 2030, yet it only receives 3% of global sustainable development flows totaling just $30 billion annually.
G20 membership will enable the AU to shape a global development agenda better aligned with its own Agenda 2063 and to mobilize external financing for climate adaptation, energy transition, and infrastructure development. African countries can build stronger collaborations with partners in the EU, not limited to the governmental level, and leverage those partnerships for skill development, resource mobilization, and knowledge transfer.
The AU must capitalize on this golden opportunity to transform the continent’s fortunes. For that to happen, policymakers must play a key role in identifying opportunities and presenting effective work plans to achieve those goals. However, unity and decisiveness are vital in this.
Citations
Africa Business News. African Union and presidents welcome G20 membership. Retrieved September 15th 2023 from
Tieku, Thomas Kwasi. “The African Union: successes and failures.” Oxford Research Encyclopedia of Politics. 2019.
United Nations Conference on Trade and Development. Economic Development in Africa Report 2023. Retrieved on September 15th 2023 fromhttps://unctad.org/publication/economic-development-africa-report-2023