Continent’s influence as a single market has ramifications for how we will shape our role
YOU’VE probably heard the notion of the coming African Century, as a new wave of foreign investment and international interest descend on the continent to get into position in anticipation of future growth.
As The Economist reports, competition among foreign companies and governments to strengthen ties with Africa presents historic opportunities.
What is different about the rush of optimism for Africa in this New World Order, compared to the similarly high expectations which followed independence or the end of the Cold War, is the continent’s newfound potential for greater intercontinental collaboration, its commitment to market liberalisation and its embrace of Fourth Industrial Revolution-inspired technological innovation.
Africa hosts extraordinary market power. We have 20% of the planet’s landmass, vast natural resource wealth, and a population growing at a rate which should be larger than China within 10 years, but demographically primed for production.
According to International Monetary Fund (IMF) forecasts, sub-Saharan Africa’s contribution to the increase in the global labour force will exceed that from the rest of the world combined by 2030.
The embrace of 4IR-inspired digital production technologies has enabled the breakout of manufacturing to take shape. These enable us to serve as innovators and exporters of world-beating technologies.
There are risks and challenges to overcome. The continent is economically fractured into 16 trade zones due to geographic challenges, hosting an enduring lack of policy co-ordination.
Global conditions, such as migration patterns, are provoking a nationalist backlash in Europe and unfortunate incidents of xenophobia in South Africa. Conflict and competition between the US and China threatens to depress global demand, while instability in the Middle East has knock-on effects in crisis-prone areas of Africa.
But there are far more encouraging trends that appear to indicate that we are on the cusp of unlocking a new period of prosperity.
A recent study by the Boston Consulting Group highlights that between 2006 and 2007 as well as 2015 and 2016, the amount of capital African firms invested in Africa increased from $3.7 billion to $10bn.
Intraregional M&A deals jumped from 238 to 418; the average annual intra-African exports increased from $41bn to $65bn; and the average number of African tourists travelling within Africa rose from 19 million to 30 million – almost half of all tourists on the continent.
Now, consider the massive potential for growth if Africa is able to implement the recently forged African Continental Free Trade Area (AfCFTA), signed by 49 countries. Intra-regional trade encapsulates roughly 17% of exports as compared to well above 50% to 60% in Europe and Asia.
But according to the UN Economic Commission for Africa, Africa’s intra-regional trade is to increase by between $50bn and $70bn by 2040 solely due to the removal of tariffs proposed under AfCFTA.
The increasing economic influence of Africa as a single market has important ramifications for how we shape and determine our role in the international system; the responsibilities of global leadership we are able to assume alongside allies and partners.
Our continent’s leaders are rising to the challenges presented by the New World Order and are articulating alternative narratives on pressing global issues including international trade, and addressing challenges such as climate change and inequality.
It is critical that the philanthropic community, follow suit. Our philanthropic efforts are becoming more effective as they become more homegrown. Africa is self-addressing the critical challenges, investing in financial inclusion, renewable energy and intercontinental security, as examples.
I’m proud of the role of my foundation in working alongside private and public sector partners to spearhead conservation and anti-poaching initiatives to preserve our rich heritage and biodiversity.
Poaching is a major security issue, financing terrorism, human and drug trafficking and the arming of militias. Left unaddressed, the wider stability and economic growth of the continent is at risk.
There is work to be done amid the shifting geopolitical and commercial environment. Africans must continue to explore supporting the continent’s economic empowerment, pursuing greater market liberalisation through greater intra-African collaboration, and further fuel a culture of 4IR technological innovation-driven industrialisation.
We must together develop a deeper understanding of our newfound role in decision-making in this New World Order. Only then will Africans write for themselves one of the great economic success stories of the 21st century.