As a new era unfolds, how should Africa calibrate?
Goolam Ballim | Jeremy Stevens | Simon Freemantle
Introducing a new series charting Africa’s place in a rapidly reconfiguring global political economy
- This note introduces a new report series that will attempt to steer the African narrative towards attuning to the structural changes in train across the globe. Indeed, in the aftermath of the Covid-19 pandemic, as society yearns for a return to the familiar, stability and calm, we question whether the evolving global business cycle will largely revert to the pre-pandemic pattern. Instead, we posit that the world may be on the cusp of a new age unfolding.
- We believe that the coming years will witness an array of structural changes across geopolitical and socio-economic spheres and, while such tectonic shifts would trigger bouts of instability and spawn a plethora of risks, they could also spur new growth vectors that would boost human welfare. To be sure, the coming decades may witness socio-economic progress that surpasses the already extraordinary transformational gains of the latter half of the 20th century. However, it is rare that the gains from sweeping global trends are universally shared or, at least, transmit everywhere simultaneously. It is therefore necessary to examine whether, specifically, Africa will have a seat at the table.
- As a result, the upcoming series of reports will highlight the far-reaching changes globally afoot and consider how Africa should position itself to participate. The series will principally focus on three interlocking and unfolding themes. In this brief note we introduce each theme and point to the ways in which we intend to interpret Africa’s engagement with them as this series unfolds.
- (1) A new geopolitical paradigm. Russia’s invasion of Ukraine and rising US-China tensions hasten the shift from an era of US-led unipolarity to one defined by more uncertain multipolar connections. A persistently elevated level of geopolitical risk has now enveloped the world, and apart from raising the risk of volatility in the global economy and financial markets, nation states, including across Africa, must consider how to calibrate for a new era of geopolitical strain and foreign policy demands. Indicatively, in its Apr:23 World Economic Outlook report, the IMF argued that global geopolitical tensions, and related “geoeconomic fragmentation”, could lead to a long-term loss of 2% of global GDP, that “geopolitical vulnerability is concentrated among emerging market and developing economies”, and that non-aligned countries may experience pronounced policy uncertainty as geopolitical rifts deepen and FDI flows are directed towards countries that more openly align to vying global powers. Economic decline in a worst-case US-China scenario for SSA could, according to the IMF’s assessment, be “permanent”. Yet, at the same time, incorporating a position of “active non-alignment” (see here), African governments could use their enhanced foreign policy influence to advance their domestic, and regional, strategic and economic interests. Our reports in the coming weeks will focus on this theme, specifically: the broad parameters of the looming ‘new Cold War’ between the US and China and the implications of the same for Africa; and a contemporary assessment of the tenor of China-Africa relations.
- (2) The energy transition. A global imperative to rapidly decarbonise to align with alarming IPCC predictions of climate-induced harm imposes abundant challenges and select opportunities for Africa. In short, amid generalised energy scarcity and the Paris Accord ambitions, Africa faces deep complexity in pursuit of raising living standards while aligning to the most significant energy-investment reset in history. Understanding the risks, and emphasising the imperatives and opportunities inspired by this reconfiguration, will be central to this new series.
- (3) New transversal technologies. Africa has eagerly embraced technology to leapfrog structural impediments to growth and wellbeing. Deepening this path will be crucial in the coming years as the continent seeks to bridge the divide between advanced and even developing world technological standards. Meanwhile, new transversal technologies are emerging and may prove simultaneously disrupting and advancing of human endeavour, again forcing African economies to rapidly adapt to evolving global norms. Indeed, emphasising this disruptive potential, in a recent WEF report it was argued that where in 2022 34% of all tasks were performed by machines (the remaining 66% by humans), by 2027 machines will account for 43% of all tasks, and humans 57% (see here).
- In closing: As the world sheds the yoke of the pandemic and humanity craves its historical rhythm, societies around the world will instead have to engage with sweeping structural shifts that will affect various facets of our lives in the coming years. Governments and business leaders will have to be at the forefront of embracing these changes, and Africa should be acutely alert to the perils of being unresponsive. This upcoming series of reports should illuminate possible paths of readiness.
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