The G20 summit, a gathering of the elite group of the world’s really big economies, held last weekend in Canada. Of the 54 countries that make up Africa, only South Africa is a member of the group. This is really nothing surprising.
South Africa, hosts of the on-going football World Cup, is the continent’s biggest economy with a total GDP of $506 billion. The football fever in South Africa significantly stole the spotlight off the G20 meetings, but does not undermine the importance of the meeting for Africa.
Africa remains strategically important to the G20. That, of course, explains the invitation of President Goodluck Jonathan to the meeting, even though Nigeria does not belong to the club. Africa is the foundation of the global supply chain with 40 per cent of global mineral reserves, strategically located between hemispheres and time zones, a billion people and over a quarter of UN member states (and therefore votes) gathered together.
But last weekend’s meeting was essentially not about Africa. It was about a group of economic giants enormously challenged at this time. It was about 19 countries plus the European Union (EU), which comprise 85 per cent of global national product and 80 per cent of world trade, battling to maintain their export openings, at a time when Africa is asking for more windows for its products. According to Jonathan, “as long as we are not encouraged to export our produce, then we will continue to be begging.”
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As pundits predicted, last weekend’s meeting was a clash of EU and US economic views. Ahead of the meeting, the EU, in an attempt to check the debt crisis of Portugal, Italy, Greece and Spain (referred to as the PIGS economies), had embarked on intense budget cutting measures. This, the United States sees as having the potential to dent its own economic recovery. As the world’s largest trading bloc, the European Union (EU) represents seven percent of the world’s consumers but a fifth of world trade. The dramatic fall in the value of its currency thus has major implications.
If the euro doesn’t recover, exports to Europe will fall because they’ll be more expensive relative to goods already made in Europe. Similarly, the US, China, and other nations may find it more difficult to export in general, since competition would intensify with European companies, whose goods and services have suddenly become cheaper. EU officials say budget austerity promotes the stability and market confidence that are prerequisites for their role in overall recovery.
There are lessons that Africa can learn from the differing economic views of EU and US at this time. Key is the fact that national and regional interests are core to international economic diplomacy. The debt crisis of its member states, particularly Greece, is pushing EU into an existential challenge that is diverting them from making allowances for other interests, even those of the U.S, their traditional allies. One of Africa’s problems in international diplomacy has been its inability to clearly articulate and follow its strategic self interest. That was the continent’s challenge at the Copenhagen climate change conference last December.
Notwithstanding G20’s new promises for Africa, it is heart-warming that many countries on the continent are on the verge of economic take-off. While the G8 remain locked in an emotive humanitarian conception of the continent, African leaders must intensify efforts to create environments that are welcoming for the proper diversification of their economies and for private sector engagement in key sectors. That is the way to keep Africa away from its dependence on aid from the West.
