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AFRICA’S DEVELOPMENT CHALLENGES: THE GLOBAL GOVERNANCE AND GEO-POLITICAL INTERFACE

AFRICA’S DEVELOPMENT CHALLENGES: THE GLOBAL GOVERNANCE AND GEO-POLITICAL INTERFACE

The current age of interdependence which has brought people, countries, and regions closer together as never before has rather exposed Africa’s marginalisation and its structural vulnerability. This is because the changing global environment has hardly had positive spinoffs for 1.2 billion Africans who make up the population of the continent’s 54 countries. Rather, their plight has been determined by corruption, poverty, joblessness, inequality, disease, conflict, famine, and militarized and gender violence. That these morbid symptoms persist is not only indicative of a poor articulation between economic growth and structural change in Africa; it is also an indictment of the paralysis in global governance.

Global governance is very much about ‘governing without government’ where nation states in the main provide the necessary steering mechanisms for generating global public goods across different multilateral actors, structures, institutions, and norms. However, while the United Nations represents the de facto steward of global governance, it is a system that is erratic in its functions, flawed and inadequate in its structures, and capricious in its rules and norms. In short, global governance is devoid of any grand logic, made up as it is of an anarchic and borderless web of state and non-state actors whose interactions occur through infinitely elastic circuits of formal and informal processes.

Quite crucially global governance represents a calculus of power which in essence has pronounced effects on the asymmetries between rich, emerging, and developing countries. Put crudely, it defines the fault-lines between the global North of developed countries and the global South of developing countries. It is in these fault-lines where Africa’s 35 least-developed countries (LDCs) find themselves more vulnerable to external forces and dynamics over which they have little control such that the emancipatory underpinnings of global governance have proven to be far-fetched. Instead, global governance represents a form of neo-liberalism which legitimizes the hegemonic structures and power divisions of the current global order.

The Impact of Global Issues on Africa

The first issue to consider is the contagion effects of the 2008 global financial crisis which continue to haunt African countries in the form of volatile currencies, reduced inward investment flows, shrinking remittances from abroad, and declining commodity prices. While most rich and developed countries found the fiscal space to make counter-cyclical adjustments in order to cope with the effects of the crisis, African countries were forced to adopt restrictive fiscal and monetary policies, without much relief from the major donors of the G-8, the European Union, the World Bank and the International Monetary Fund. Under China’s leadership in September 2016, the G-20 (a mix of 8 developed and 12 developing countries) launched its ‘Initiative on Supporting Industrialization in Africa and LDCs’ as a means of supporting economic diversification and reducing reliance on commodity exports in an attempt to move African producers up regional and global value-chains. The effects and efficacy of this initiative remains to be seen.

A second area relates to climate change which poses distinct threats to Africa’s ability to achieve the ambition set out in the UN’s Sustainable Development Goals. The African Common Position on Climate Change adopted in 2009 and Africa’s ability to shape negotiations have been consistently undermined by a self-interested worldview among the rich industrialised countries. This has been compounded by the post-Kyoto Protocol’s struggle to impose governance order on the principle of ‘common but differentiated responsibilities’. This principle is based on the imperative that the historic emitters of the West shall make greater commitments in greenhouse gas reductions and funding allocations. Meanwhile, African countries have continued to face mounting climate-induced challenges such as increasing food insecurity, energy poverty, and rainfall variability, all of which have been exacerbated by insufficient financing for adaptation and mitigation.

The continent contributes a mere 3.8% of global greenhouse gas emissions, but its low adaptive capacity accentuates its vulnerability. The 2015 Paris Agreement goes some way to ramping up climate financing to $100 billion by 2020 and includes plans to mobilize $1 trillion per year—the so-called “Clean Trillion”—for renewable energy. However, these pledges could turn out to be more perfunctory than real because in global climate governance, Africa is a major stakeholder yet has continued to suffer from ‘pledge fatigue’ where much is promised but little is delivered, with obvious and serious developmental and environmental implications.

The third illustrative area concerns international trade and Africa’s participation in the Doha Round which started in 2001. In what is highly problematic, this Round’s original letter and spirit as a ‘development round’ has been significantly diluted by the neo-mercantilist posturing of developed countries, especially by the US under Trump. In particular, the promise of ‘special and differential’ treatment for African countries has not moved beyond best endeavour in improving their capacity to trade and addressing their multiple supply-side constraints. In the World Trade Organisation (WTO), the Africa Group—supported by the G-20 of emerging economies and the G-90 of developing countries—made a case for greater policy and development space in negotiations in order to offset the aggressive push by developed countries for greater market access in services and industrial goods. During the Uruguay Round, African countries could not offer much in the complex, cross-cutting negotiations on reciprocal tariff reductions and mutual concessions agreed to by developed countries.

The Doha Round was thus seen as providing the corrective mechanisms not only for addressing the imbalances of the Uruguay Round but for fundamentally improving the capacity of African countries and other LDCs to benefit from participating in the global trading system under WTO rules and agreements. However, and to the contrary the Doha Round has rather become a veritable battleground between the North and the South in terms of how agricultural protectionism in the former can be traded off for market access in services and industrial goods in the latter. This again highlights the extent to which global trade governance in the Doha Round has only served to amplify the disparities between rich and poor countries, with those of Africa being the net losers.

What about “Africa Rising”?

Against this backdrop and despite the recent discourse about “Africa rising”, the cold facts point to the contrary. Optimism about Africa’s future was largely based on aggregate pre-2008 growth rates of 5.5%. This was mainly due to robust global commodity demand, principally from China. However, the global financial crisis together with the cyclical downturn in commodities has brought into sharp relief several causal factors which still retard Africa’s growth and development and underscore its vulnerability.

 Poverty is a major factor which affects close to 400 million Africans who continue to survive on less than $1.25 a day. Levels of poverty are exacerbated by joblessness, particularly among 200 million youth aged between 15 and 24. However, there is also the collateral impact of other factors such as rising levels of inequality, mortality, food and energy insecurity, poor governance and weak institutions, destructive conflicts, religious extremism, ethnic and gender violence, environmental degradation, and migration.

These vulnerabilities intersect with a harsh external environment where Africa’s marginalization has hardly been ameliorated even during the pre-2008 boom. The continent’s share of global GDP has remained stagnant as a whole at 2.4% and is barely above 1% for sub-Sahara Africa. Low growth is rooted in poor manufacturing output, weak domestic savings and investment, and declining trade and financial flows. Moreover, as a whole, Africa represents a mere 1.3% in global stock market capitalization (most of which is concentrated in South Africa); 0.2% of debt securities; 0.8% of bank assets; while the continent attracts a paltry 4% of foreign direct investment. Most perniciously, unregulated finance has resulted in capital flight and illicit financial flows. Global Financial Integrity estimates losses for both at a staggering $854 billion from 1970 to 2010.

If all these factors are taken into account, then global economic governance has hardly been a benign force in shaping Africa’s fortunes. The asymmetries of relative influence within the major global institutions amplify the marginal voice of African nations. Two examples help to make the point. In terms of voting power in the IMF, Russia carries the same weight as the 47 African members combined at 2.5%. And under the World Bank’s Heavily Indebted Poor Countries initiative, the 33 eligible African countries were forced to meet onerous debt relief benchmarks despite high levels of debt distress. This included an export-to-GDP ratio of at least 40% and a minimum threshold of fiscal revenue of 20% in relation to GDP. Such demanding debt relief burdens must be seen in the context of African countries having already paid $549 billion in cumulative debt service from 1970 to 2002.

In the area of global security governance, the authority of the UN regime has been compromised by its inability to assist with stabilising Africa’s 12 most fragile states. At least 60% of the UN Security Council’s business is taken up with African conflicts in terms of Article 24 of the Charter—yet in the Security Council Africa hardly has a voice, with its representation restricted to rotating non-permanent membership.

The significance of new alternatives and options

While there has been a procession of manifest failures related to the established global steering mechanisms, there are some fast-evolving alternative developments which are encouraging for Africa.  The countries of Brazil, Russia, India, China and South Africa which make up BRICS have now become critical players across Africa’s development landscape. From 2000 to 2016, BRICS-Africa trade has increased from $28 billion to $400 billion (a rise of 1350%). The “ICS” of India, China, and South Africa accounted for 91% of this trade in 2016. China is now Africa’s largest trading partner on a country basis: trade volumes between Africa and China increased from $170 billion in 2017 to $205 billion in 2018 (an increase of 20%, the highest since 2011). By 2012, about 2000 Chinese companies invested over $21 billion in 50 African countries and by 2014, China’s investment stock in Africa was over $32 billion. After China and EU countries, India is Africa’s third largest trading partner with total trade of $82 billion in 2015 and FDI stock of $65 billion. As the smallest BRICS economy, South Africa’s total trade with the rest of Africa stood at $45 billion in 2015 and its total investments were around $21billion—relatively small compared to other BRICS economies but large in per capita terms.

We should not forget nor ignore the transformative letter and spirit of the UN’s 17 SDGs, and the far-reaching potential of these goals for Africa over the next 15 years. Africans have a high stake in the SDGs since the 169 targets that they embody cover economic growth, social development, and environmental protection, all of which are of critical importance to the overarching goal of poverty reduction. The SDGs set a much higher level of achievable ambition compared to the declaratory objectives of the Millennium Development Goals (MDGs). 

The major challenge of the SDGs is whether the necessary focus and concentrated effort will flow from so many goals.  The chances for success will likely be strengthened if some select priorities are identified for greater attention, and if the leadership of the G20 nations can reach some semblance of consensus in terms of supporting the SDGs.  Nevertheless, although the programmes of the traditional global multilateral institutions have largely failed to deliver from an African perspective, a diverse new ‘eco-system’ of development options has emerged for Africa. 

These include new types of international summitry and new institutions, such as those led by the BRICS nations, which could open new opportunities for African countries.  This new eco-system and greater diversity of development options offers a new mix of opportunities for Africa across the areas of trade, finance, investment, poverty reduction, business and industrial growth, infrastructure improvement, social development and environmental cooperation, and international and national security.

As such, the new strategic engagements above represent an à la carte menu of alternatives to Western dependence and they take on added significance in view of the African Union’s Agenda 2063. Inaugurated in 2013, this is a new and ambitious 50-year vision – developed by African strategists – to achieve an integrated and prosperous Africa which is guided by five10-year plans. The continental and international cooperation agenda will focus on the themes of inclusive growth and sustainable development; political and economic integration; good governance, democracy, and human rights; peace and security; and building global partnerships.

These reflections certainly point to the fact that the anachronistic features of the long-established arrangements of global governance—which remained rooted in old North-South divides—have failed to deliver for Africa, and arguably have even undermined effective collective action and problem solving across the African environment. However, out of this ‘crisis’ of global governance, Africa is now presented with new opportunities for international cooperation. These are coupled with a different set of institutional options that could empower Africa to participate in ways that reflect greater autonomy, self-reliance, and self-determination.  Although the emerging scenario does present Africa with an invitation to recast its lot in international governance, Africa’s climb out of a peripheral global position will nonetheless require its international partners to continue looking for what they can do together with Africa and avoiding talking only about what they can do for Africa.

Poverty reduction and lessons from China?

China’s commitment through the Forum for China-Africa Cooperation (FOCAC) has been to work with Africa to reduce poverty and is particularly important. And here we can draw from President’s Xi Xinping’s authoritative book Up and Out of Poverty for the critical lessons it provides for Africa. From his many years of facing the development and poverty challenges in the Ningde Prefecture, President Xi demonstrates the power of transformational leadership in making a difference in the lives of poor Chinese people. This has served as a model for lifting more than 600 million Chinese citizens out of poverty over the last 30 years. Indeed, the challenges which he faced in Ningde are very similar to those which confront the countries of the African continent.

President Xi’s imagery of the “weak hatchling bird” and the dilemma of whether it can be the first to fly is symbolic of a struggling economy and impoverished people. How their plight can be turned around through the judicious use of economic, cultural, and human resources is the essence of helping the weak hatchling bird to fly. Above all, according to Xi, the battle for development is a mental one and must begin by addressing the mind-set of communities and their leaders: they must believe that development is possible, whatever the odds may be. The weak hatchling will never take off if it depends on government aid, financial grants, and welfare allowances.

The fight against poverty also means taking advantage of the gifts of nature, where Africa enjoys an abundant largesse. For example, the advantages of agriculture in Ningde became the basis for building a foundation for industrial development. However, natural assets will not be turned into any added value unless accompanied by a unified voice among communities and people that are capable in Xi’s words of producing a “melodious, resonant, and beautiful song” that draws on internal coordination and cooperation.

The importance of leadership is self-evident in any poverty reduction agenda; leaders cannot afford to alienate themselves from the people at grass-roots level by serving their own interests or creating patronage networks that promote corrupt behaviour. As Xi says in the book: “Power is given to us by the people and we must follow the will of the people and work for the people”. Therefore, developing clean government is a long-term project and requires patience and commitment. As such, there is no quick fix to development and poverty since it is a gradual process requiring steady and systematic work. As Xi puts it, tackling poverty and development problems demands persistence and “work with quiet dedication like water droplets drilling through rock”.

The great challenges for Africa are two-fold; on the one hand, whether it can collectively address the deficits in global governance in an age where there has been a retreat from multilateral cooperation; and on the other, whether it can create a virtuous cycle of development out of the spectrum of new opportunities and options.

Dr Garth le Pere is Extraordinary Professor at the University of Pretoria.

AFRICA’S DEVELOPMENT CHALLENGES: THE GLOBAL GOVERNANCE AND GEO-POLITICAL INTERFACE