Kevin Tutani takes a look at what it means for Africa following the African Union becoming a permanent member of the G20
On the 9th of September, the African Union was made a permanent member of the G20, after a series of requests and proposals on the matter by a number of prominent leaders, including Prime Minister Narendra Modi, President Joe Biden, and President Cyril Ramaphosa, among others. The differences in the political persuasions of the leaders who supported Africa’s entry into the powerful organisation invokes a curiosity to understand the implications of the continent’s participation in the group, whether it will be of benefit or not, and to whom the benefit will accrue.
The G20 is a bloc of 19 wealthy and politically influential countries, which holds meetings, yearly, in order to coordinate policies in member countries, with the aim of directing the global economic landscape and other international priorities. The European Union, makes up the 20th member, with its seat, under the European Commission, representing every country within the EU bloc. The introduction of the AU, now makes it a group of 21 (19 countries, plus the EU and the AU), giving rise to the possibility of a name change to G21. It is also noteworthy to state that South Africa has been a member of the G20, since its formation, although its recent expressions under President Ramaphosa have shown a strong will to have the AU on board.
Formed in 1999, the original mission of the group was to coordinate financial policies of rich countries, so that they would be able to respond to global financial crises and promote global economic growth. Through time, the G20 has evolved from a strict focus on finance and economic matters, to include; climate issues, human rights, and political matters. It has become a hub where the prevailing global economic and political situation is determined and negotiated.
In order for the continent to benefit from the group, it needs to have both the capacity and the ability to negotiate at such an international level. Interestingly, at the existing multilateral bodies such as the UN, WTO, IMF, and World Bank, for example, African nations are struggling to sustain diplomatic missions which are responsible for negotiations at the organisations. With regards the World Trade Organisation (WTO), African countries are still skipping a number of Joint Service Initiatives (negotiations), since they do not have the finances required to sustain adequate staff at the institution’s headquarters in Geneva. As a result, several binding agreements will be approved, without the input of such incapacitated nations.
Apart from capacity, the continent needs to ensure that it has enough skills to negotiate at such a stage. Typically, this requires competent personnel with in-depth knowledge of agenda items and the relevant ideological awareness of how Africa’s expectations can fit into the G20 agenda. An understanding of the continent’s haggling abilities at other multilateral institutions shows that the Africa still has vulnerabilities and skills gaps in this area. Thus, an audit of the AU’s staff compliment is vital, in order to improve the G20’s membership value.
If asking the right questions is a part of a great evaluation process, then it is vital for Africans to interrogate why it is only now, that they are being accepted into the eminent group of 20. Additionally, support for AU’s membership has been coming from very unlikely participants, such as the US. Some experts have stated that the timing indicates that several advanced economies in the G20 are aiming to reduce the effectiveness of and cooperation in the BRICS economic bloc. After 15 years in existence, the BRICS has finally succeeded in organising the major “Global South” economies, thereby threatening the traditional multilateral order. Among the potential casualties (victims) of a successful BRICS grouping are; the use of the US dollar in international trade, the unrivalled military power of Northern countries (NATO), replacement of the IMF and World Bank as indispensable multilateral financial institutions, etc.
Additionally, China’s growing influence around the world, and more so in Africa, has left the continent’s traditional economic and political partners (the West), lagging behind. The new relationships which China has managed to create around the world are leaving Western nations with less bilateral opportunities. Under China’s flagship, Belt and Road Initiative (BRI), for instance, 150 countries received infrastructure spending or loans from Beijing, in a strategic mission to strengthen the Asian giant’s influence, globally.
The BRI may be one of the reasons why the US introduced an alternative infrastructure programme at this year’s G20 leaders’ summit. Unveiled as the “Partnership for Global Infrastructure Investment”, or the “India Middle-East Europe Economic Corridor” (IMEC), the programme will focus on railway and port investments, linking India to the Middle East, Europe, and USA (through ports). The project will be vital in expediting the export of oil from the Middle East to India, Europe, and the USA.
By joining the G20, the AU can now bring emphasis to challenges faced by the 55 African nations which it represents. There is also an opportunity to table solutions or proposals to address the world’s problems, from an African viewpoint. It is also noteworthy to be clear on the fact that the G20 does not have authority or power to enforce summit resolutions. However, the debates and contributions at the forum create room for cooperation and generally direct the policies of member countries in line with the decisions made at the summit.
At the end of the September meeting in New Delhi (India), leaders signed a declaration which conveyed the agreements reached. The comprehensive declaration document contains the group’s decisions on 10 broad negotiation points (agenda items). A review of some of the resolutions made, can reveal some limitations, biases, and challenges besetting even this premium group. These include agreed positions on; international trade, responses to climate change, and sustainable economic growth (through increased FDI flows).
Regarding international trade, the grouping outlines that members will work to ensure that it is unimpeded and fair. However, the case has been that, for decades, even through the existence of the G20, international trade has been unfair and characterised by barriers which block out exports from Africa into advanced and emerging economies. Northern economies (particularly those in G20), are infamous for subsidising their farmers to a level where their agricultural produce becomes unsustainably cheap. In 2020, the OECD’s “Agricultural Policy Monitoring and Evaluation” report revealed that capable countries were subsidising their farmers to the tune of $700 billion yearly. This has worked against the competitive advantage of Africa, which originally produced cheaper agricultural commodities but lost competitiveness due to an incapacity to subsidise their farmers. Therefore, African nations which were supposed to be exporting to the US and EU, have now become net food-importers, owing to the insensitivity and unfairness of advanced economies. Ironically, the same Northern economies rebuke African nations for government interventions in their economies, labelling those which do as, “socialists” and “incompetent”. Therefore, one would be uniformed of past trade dynamics, if they expect that the G20 countries have an authentic commitment to encourage free global trade.
On the matter of climate change management, the G20 outlined that there is a need to massively scale down the input of coal power plants in electricity generation. Conversely, there is no similar focus on equally-polluting petroleum products. Since a great number of developing economies (including those in Africa) are dependant on coal for power generation, this commitment by the G20 will also be difficult to accept and align with. Moreover, most developing economies have to make a decision between fighting climate change or poverty.
Knowing the urgency of poverty in Africa, it is clear that it will be a priority ahead of climate goals. Further, the failure to equate the need to reduce petroleum’s part in the same manner as coal shows that clarity and comprehension of pertinent global issues is sometimes lacking in the grouping. Once more, this works to reduce expectations on the part of the new member (Africa).
The declaration on sustainable economic growth outlines that the G20 will encourage increased foreign direct investment (FDI) flows into member states in order to drive economic growth. If Africa experiences more FDI flows due to this commitment then there is reason to acknowledge the G20 for such a breakthrough. Nevertheless, for a continent which received only 3.5% ($45 billion) of total global FDI flows ($1.3 trillion) in 2022, it may serve the continent well to approach its expectations with caution as well. Typically, a disproportionate part of global FDI flows moves strictly within the advanced OECD economies and very rarely into developing regions such as Africa. Whether the G20 will be able to change this trend, remains to be seen.
It can be inferred, from the declaration points outlined that although the G20 is a prominent group necessary to participate in, expectations have to be rightly managed in order to avoid disappointment.
South Africa’s stake
Africa’s membership will enable SA to bundle its objectives with the rest of the continent. In this way, the urgency of African challenges is appreciated and addressed. As it stands, South Africa’s perspective on a number of global matters have largely been ignored in the international community and this has been ongoing for decades. Since SA faces much of the same problems with the rest of the continent, it will be harder for Africa’s position on global affairs to go unnoticed.
As can be understood from the various scenarios outlined above, Africa needs to manage its expectations now that it is a member of the G20. Although breakthrough resolutions can be secured through the group, it may not necessarily be assured that such will happen. Secondly, the AU needs to invest in capacity and personnel who will represent the continent adequately at this global platform.
Thirdly, there is a need for the continent to not be alienated from its other partners such as the BRICS, through the glitter of its new-found home in G20. Lastly, SA now has more leverage in achieving its objectives on the global stage, which can be utilised through coupling them with the rest of the continent’s.
Understanding how to leverage the greatest value out of the G20, or lack thereof, will determine whether the membership is useful or rather symbolic.
Kevin Tutani is a political economy analyst.
This article originally appeared on Africa Talks Business and is published with permission.