G20: Championing Africa amid global protectionism
Tendani Mantshimuli, Economist and Executive in Strategy Support & Governance, Liberty
Over the past decade, the world’s leading nations under the umbrella of the G20 have met in emerging market countries a total of five times, or six if you count Turkey among those. Through the presidency of nations such as Brazil, they have all told the story of a rebalancing of the global economy in favour of the more populated and younger south, moving away from the northern climes that dominated the post-World War II era.
This year, South Africa has to take that mantle and continue where India left off in its presidency, championing the Global South and urging international bodies to be more inclusive. We should do this while also focusing on putting Africa’s developmental agenda in the spotlight, a goal aided by the African Union (AU) now having a seat at the table. The body’s inclusion hopefully paves the way for other African countries to have a seat in their own right at future summits.
While the South African economy is the smallest among the G20 economies, at about 0.6% of their GDP, the country can use the stage afforded by hosting the summit to address Africa-specific issues like debt, inequality, and sustainability. Africa seeks greater equality in decision-making processes and a stronger voice in global institutions.
It is critical that we find innovative solutions for Africa’s high debt levels, which are often in hard currencies, and explore new funding models for much-needed infrastructure development. Public-private partnerships (PPPs) can attract investment and address some of the continent’s infrastructure gaps. Africa must move beyond raw material exports and develop local industries to create jobs and reduce dependency on foreign markets.
If African and other developing economies do not grow enough to create job security for their people, Western nations will continue seeing illegal migration as people seek better opportunities.
A persistent challenge has been uniting African leaders on a single agenda, and this year is likely to be no different. We have often lacked a unified front, exacerbated by conflicts and varying levels of economic development, which has only undermined our global influence. The AU should foster greater unity and a shared vision to strengthen Africa’s influence globally.
South Africa has a critical role in championing this agenda but must avoid being seen as dominating the continent’s narrative. This will be difficult to navigate given how the country has been dragged into the headlines around its land reform and transformation policies by the new US administration.
Land reform policies, while crucial for addressing historical inequalities, have created uncertainty for foreign investors, particularly in sectors like mining and agriculture. Poor communication around the policy has led to misconceptions, with social media amplifying fears of mass land expropriation. South Africa should balance its commitment to the policy, whilst maintaining investor confidence and economic stability.
While nationalist and protectionist policies have been on the rise, the Donald Trump-led US administration has escalated them to new levels. The spectre of escalating trade wars looms large, threatening global trade relationships built over decades. In such a world, South Africa should accelerate efforts to expand exports to other markets such as the EU, Africa (through the African Continental Free Trade Area), and Asia, reducing reliance on the US. If Africa can negotiate as a bloc, it would help secure better trade partnerships outside the US.
The US’s more aggressive stance on trade and diversity poses a significant challenge to this year’s G20 theme: solidarity, equality, and sustainable development. The recently appointed US foreign secretary has been critical of this theme, particularly regarding climate change and diversity, equality, and inclusivity.
Africa faces disproportionate impacts from climate change, including droughts and floods, which threaten food security and migration patterns. Keeping climate change on the agenda, while anathema to the current US administration, is something other G20 members must appreciate, particularly as it affects migratory patterns.
Addressing climate change and economic inequality is crucial to reducing migration pressures on both Europe and the US.
Developed nations should support Africa’s sustainability efforts to mitigate global climate risks and migration. Despite contributing minimally to global carbon emissions, Africa faces disproportionate climate change impacts, leading to economic instability and increased migration pressures. Without support from developed economies, African nations may struggle to implement necessary climate adaptation and mitigation strategies, exacerbating global climate risks and migration issues.
Equality, sustainable development, and climate change are not just African or emerging market issues, as evidenced by wildfires and floods in Europe and the US. Shying away from these issues does not make them disappear. The onus is on South Africa’s G20 presidency to keep these discussions going.
Standing firm on these principles aligns with South Africa’s and the continent’s long-term interests but may pose short-term economic challenges.