This article is part of:Centre for Regions, Trade and Geopolitics
- Davos 2024, the Annual Meeting of the World Economic Forum, took place from 15–19 January in Davos, Switzerland.
- The programme embodied a “back to basics” spirit of open and constructive dialogue between leaders of government, business and civil society.
- African delegations discussed how the continent can leverage the potential of frictionless trade and engagement to become a major player in global supply chains.
“This giant is on snooze”.
So said Fifi Andrews, who moderated a session in Davos on scaling the African economy, raising the question: Is Africa really rising, or is the ‘sleeping giant’ yet to awaken?
Davos 2024 presented a timely opportunity to ring the alarm and delve into the policy and public-private partnerships that could rapidly scale the African economy.
The meeting saw a keen focus on economic growth from African delegates and the launch of the Private Sector Action Plan, a first-of-its-kind initiative between the World Economic Forum and the African Continental Free Trade Area (AfCFTA) Secretariat. The initiative is comprised of 40 global companies.
The announcement came after President Paul Kagame of Rwanda and President Nana Akufo-Addo of Ghana, together with the United Nations Development Fund, launched Timbuktoo, a start-up fund with an initial $1 billion target to leverage Africa’s youth and dynamism.
The fund is expected to provide financial support to innovative and dynamic startups, spurring economic growth, job creation and technological advancements across the continent. By encouraging entrepreneurship, the Timbuktoo initiative aims to contribute to the development and empowerment of Africa’s youth in the rapidly evolving global economic landscape.
Africa’s opportunities for growth, however, are hampered by well-documented challenges, not least of which is conflict.
Speaking at the On the Frontlines for Nature session in Davos, Emmanuel de Merod, Director of the DRC’s Virunga National Park, spoke on the violence, extreme poverty and environmental degradation in Eastern Congo – byproducts of the scramble for Congo’s resources.
Virunga National Park, perhaps best known for its endangered mountain gorillas, is a UNESCO World Heritage Site located in the eastern DRC. Virunga is the continent’s most biologically diverse protected area. Yet it exists within an ecosystem marked by protracted armed conflict and the violent extraction of minerals.
In some senses, that’s the story of Africa. Thriving in the face of adversity. Surviving against all odds. But this romanticised view of the continent often acts as a barrier to real-world solutions to many of the continent’s most pressing problems.
On real-world solutions
Speaking at a session where panellists discussed the schism between the global North and South, Rwandan President Paul Kagame alluded to capacity building as one way to ensure that Africa remains up-to-speed with global developments, especially in times of crisis.
We cannot address global inequality by mitigating crises as they happen. We need to involve developing countries from the beginning. There are tools available for Africa to deal with crises as well.—Paul Kagame, President of Rwanda
During the same session, Ngozi Okonjo-Iweala, Director General of the World Trade Organisation (WTO), said that we live in a multipolar world characterised by multiple power points. She pointed to a bigger role for multilateral organizations, such as the WTO, in shaping equitable outcomes for people and the planet.
At the same time, she said that the balance of trading power is shifting towards the South. Whereas North-South trade has remained stable over the past few years, South-to-South trade is on the rise, with the South now becoming a power trading bloc. According to Okonjo-Iweala, this illustrates that the global centre of power is diffusing, and we need to work together to remain on course.
We’re interdependent, and we need to work together. We need to solve the problems of the global commons.—Ngozi Okonjo-Iweala, Director General of the World Trade Organisation (WTO)
Taking a contrarian view, Enoch Godongwana, South Africa’s Minister of Finance, made a case for BRICS, the recently-expanded intergovernmental organization that comprises Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the United Arab Emirates, Iran and Ethiopia.
“The key issue is how do we mobilise savings in the south in order to ensure a better development agenda? That’s the most critical part. To do this there needs to be reform of the international, multilateral institutions,” he said.
While considering all these views, Africa remains a continent with incredible potential, perhaps only lacking the policies and regulations to steward its abundance of talent and resources.
Which is where the AfCFTA enters centre stage.
According to a World Economic Forum’s Insight Report – AfCFTA: A New Era for Global Business and Investment in Africa – the free trade area, one of the world’s largest by number of people and economic size, is projected to host 1.7 billion people and oversee $6.7 trillion in consumer and business spending by 2030.
Speaking at the African Economy of Scale session, Wamkele Mene, Secretary-General of AfCFTA, argued that the agreement has laid the ground for Africa’s potential to be unleashed.
Since the operationalisation of the AfCFTA, 47 countries have ratified the agreement. We have seen the start of trading in earnest and goods moving across borders. And we have developed a legal construct to make our single market more effective.—Wamkele Mene, Secretary-General, AfCFTA
At the same session, Kashim Shettima, Vice-President of Nigeria, said that Africa is the next global frontier because entrepreneurship is embedded into the psyche of the average African.
From where he sits, as the vice president of one of Africa’s largest economies, agriculture holds the key. 100 years ago, he said, people used horses and cutlasses to eke out a meagre existence. Now, farmers have to embrace modern agricultural practices and increase yields by leveraging our youthful population.
The continent is poised, he said, to be a driver of growth and change in the world.
Africa holds the promise, but we need partnership. I don’t subscribe to the idea of begging. We can carry our poverty with dignity.—Kashim Shettima, Vice-President of Nigeria
On investment
To become a driver of growth both locally and internationally, African countries need access to capital, something that Mary Vilakazi, the CEO-Designate of FirstRand Ltd, is well aware of.
FirstRand Ltd is Africa’s biggest lender by market value. Speaking at Davos, Vilakazi said that banks must prioritise businesses that create jobs and build the infrastructure required to generate economic capital.
She acknowledged that there were structural and regulatory barriers to trade and cited stronger public-private collaboration as an avenue to create environments that support frictionless trade.
The frictional cost of trade in Africa is about $5 billion a year. This is money that could go back into economies.—Mary Vilakazi, CEO-Designate of FirstRand Ltd
On wielding power
Speaking at the Middle Powers in a Multipolar World session, Demeke Mekonnen Hassen, Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia, said that Africa needs to prepare itself to compete in a multipolar landscape. He spoke about a continental shoring up in the areas of peace and security, the African economy and digitalization.
The deputy prime minister acknowledged Africa’s challenges, including climate change and the energy transition, under-development, the technological divide, the reskilling imperative and the debt burden. All that notwithstanding, he said that Africa is rising and African countries are quickly evolving to compete on the global level.
The establishment of BRICS is a good opportunity to strengthen multilateralism and create access for partnerships between developed, developing and underdeveloped countries.—Demeke Mekonnen Hassen, Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia
On 1 January 2024, Ethiopia joined the BRICS pact. Mekonnen Hassen added in his remarks that Africa is poised to “play a pivotal role internationally when it comes to trade, investment and other economic activities.”
This story was originally sourced from WEF