Geopolitics is replacing globalisation as the world’s governing philosophy,” stated an IMF report earlier this month.
Long-term development assistance is declining, with individual providers now prioritising their narrower trade interests and control of critical resources, leaving a huge hole in finance to drive development. And global trade uncertainty heavily impacts Africa by inflating trade finance gaps, stalling foreign direct investment, and disincentivising value-added manufacturing.
Yet despite these uncertainties, this new paradigm could be good news for Africa over the longer term. For much of the post-independence era, Africa’s economic story was too often framed by others. The continent has habitually been seen through the lens of aid, resource extraction and periodic crises such as famine, civil war and political instability.
Today, across Africa, a more confident and outward-looking agenda is now taking shape. And this in the context of economic performance, which remains resilient despite global headwinds.
However, GDP has risen largely on the back of population growth and the commodity supercycle rather than genuine gains through productivity and innovation. If Africa is to create the tens of millions of new high-quality jobs it needs and move to middle-income status, it must pivot decisively to innovation-led growth driven by data and frontier technologies.
There are many challenges in achieving this, not least the skills challenge across the continent. Investors and entrepreneurs need an enabling ecosystem to innovate; a better educated population, a business-friendly fiscal environment, industrial parks and special economic zones alongside the building of a data economy where data centres, cloud infrastructure and secure connectivity are essential.
To harness these opportunities African countries are no longer waiting for a single patron, donor or bloc to define their development path. They are – to coin a phrase – multipolar in their approach, engaging with the Gulf, India, China, Europe, the United States, Turkey, Japan and other emerging partners across Asia and Latin America. And private sector partnerships are now key.
In a world of trade wars, Africa has agency over its own tariffs and regulatory environment to unlock the huge potential of private sector intercontinental trade. With trade between its constituent nations representing only 12% to 18% of the total, in contrast to 60% to 69% in Europe and 50% to 60% in Asia, the opportunity is transformational. Whilst the African Continental Free Trade Area is still in its early stages, its strategic importance is clear and will be driven by agile, entrepreneurial partnerships.
For senior decision-makers, the implication is straightforward. The new world disorder presents an opportunity for Africa to take more control and forge new bilateral partnerships that will charge its potential. We saw this only last month with President Macron’s visit to Kenya to strengthen France’s ties with English-speaking African countries, at which French shipping group CMA CGM committed $820m to modernise the Port of Mombasa. A good example of the new paradigm at work.
In today’s world order there is enormous opportunity for those who approach the new reality with agility and pragmatism, with a hard-headed assessment of their national – and African – interests front of mind. Africa’s pivot is not about turning away from old partners. It is about refusing to be limited by them. The continent is building a broader set of relationships on more equal terms. That is good for Africa, and it should be good for the world.
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