Introduction
Is Africa rising again? A recent report by the Economic Commission of Africa (ECA) shows that Africa is expected to grow from 2.8% in 2023 to 3.5% in 2024 and reach 4.1% in 2025, mainly buttressed by net exports, private consumption and gross fixed investment. The continent is predicted to dominate the world’s top 10 highest-growing economies in 2024 and to be the second fastest-growing region after Asia. In its 2024 report of Africa’s latest macroeconomic performance outlook (MEO), the African Development Bank Development recognised the efforts of policymakers in the continent to drive economic diversification in key growth sectors and the implementation of domestic policies aimed at consolidating fiscal positions.
Despite these projections, the continent is still contending with major difficulties in the wake of a series of multiple shocks including the COVID-19 pandemic, the Russian-Ukraine war, and major climate emergencies which have severely limited Africa’s growth potential, pushing at least 18 million people into poverty as a result, while 144 million non-poor became more vulnerable to falling into poverty. Additionally, Africa’s debt has been rising exponentially constraining growth and limiting its capability to cope with future crises. Africa’s total debt stands at $1.8 trillion, a fraction of the overall outstanding debt of developing countries with countries dedicating 65% of their GDP to debt servicing. Over the past decade, interest payments alone on debt in Africa have risen by approximately 132% to the detriment of spending on education, healthcare, and investment.
Recent appointments in key processes and political institutions, regionally and globally, however, show promise of a fighting chance in achieving these economic projections and placing Africa on a trajectory to be a “Rule Maker”, where for the longest time, it has remained a passive receiver rather than an active contributor, in a global financial system that has been unfair to her needs and, has deliberately fixed the continent in low-level global supply economic order as largely an exporter of primary commodities and importers of finished goods, making it susceptible to consistent structural trade deficits and as such, unable to finance its development agendas and even more difficult to service her external debt and her ability to obtain foreign currency has grown at a rate lower than its debt servicing costs.
Africa Leading the Charge for Change
The African Union (AU) in 2023 gained a permanent place in the G-20 (now G-21), and in many ways cemented all 55 African countries' voices in the tapestry of global diplomacy, paving an opportunity to address the global economic imbalances. While the G20 Common Framework, which sought to bring together public and private international creditors to provide debt relief to Debt Service Suspension Initiative(DSSI)-eligible countries during the Covid-19 pandemic was a welcome initiative, only four African countries that defaulted on their debt have been able to apply i.e. Zambia, Ethiopia, Chad and Ghana in a process that has been long and arduous, with Zambia just recently reaching an agreement with its bondholders and its official bilateral creditors, almost four years since it applied to the framework. The AU now has newfound leverage to demand an integrated negotiation framework to address the coordination problem of creditors within the G20 Common Framework.
Civil Society movements including AFRODAD, have already presented to the AU in a collective statement, key asks on debt and tax justice, food sovereignty, and just transition among others which it can begin championing within the G20. Together with Brazil's Presidency in 2024 in the G20, the AU can strengthen south-south cooperation and spotlight the region’s common interests of overcoming exclusionary growth, debt vulnerabilities, and climate change, and amplify the calls for reforms of international economic and financial governance. Additionally, the AU’s initiative of establishing the “Africa Club” during the 37th Head of States Summit to influence and amplify Africa’s influence in the global financial system and align its functions to Agenda 2063 is a welcome move.
Even more promising, a host of African countries like Egypt, Burundi, South Africa, Rwanda, Ethiopia, Namibia and Kenya hold strategic placement to be leveraged while shaping Africa’s position in the global order. Egypt is the chair of the UN General Assembly’s Ad Hoc Intergovernmental Committee leading in framing the terms of reference for the UN Framework of UN Tax Convention (which will potentially move global tax rules setting within a UN Framework and not the OECD, which benefits a small group of wealthy countries) after years of UN member countries majorly from the Global South calling for the establishment of an intergovernmental tax body, a call that Civil Society Organisations have massively supported Egypt’s appointment is therefore, a strategic opportunity in ensuring Africa’s needs for fair tax rules are well captured at a time when the continent is losing $88.6 billion through illicit financial flows.
A section of countries in the East Africa region are leading the charge of solidarity and have a golden opportunity to shape the agenda and discussions for Africa’s structural transformation and influence much-needed development financing to the continent. The G77+China and the Non-aligned Movement represent a significant voting bloc at the UN, and as fate may have it, Uganda assumed the chairmanship in the two significant bodies this year during the NAM Heads of State Summit and the Third South Framework under G77+ China. As Africa pushes for fairer international trade practices, debt cancellation, and increased climate financing which are all crucial aspects of achieving Agenda 2063, Uganda is uniquely placed to also strengthen South-South cooperation in articulating and promoting shared interests, particularly in the reform of the Global debt architecture.
Burundi's co-chairing of the fourth financing for Development (FfD), (with South Africa co-facilitating) process offers a chance to influence how development financing is structured for Africa. Additionally, Ethiopia's hosting of the 1st Preparatory Session towards the Fourth UN Conference on Financing for Development (FfD4) is another strategic advantage. Botswana, as the current chair of the UN's Group of Landlocked Developing Countries (LLDCs) and the upcoming host of the UN's third LLDC conference in December 2024, has a strategic opportunity to champion the specific challenges faced by these countries, particularly those in Africa. Meanwhile, Namibia's co-facilitation role in the UN's Summit of the Future negotiations presents a chance to reshape global governance for the 21st century. This could involve better reflecting the needs of Africa's young and resource-rich population, who deserve a stronger voice in shaping the international order. Namibia's leadership can ensure that African concerns are effectively heard and addressed in this crucial process.
The Time is Ripe
Indeed, the time is ripe to lead the charge! The African Development Bank’s Annual Meetings in Nairobi this week, themed "Africa's Transformation, the African Development Bank Group and the Reform of the Global Financial Architecture," affirms the critical role that Africa’s regional bodies can play in ensuring global economic and financial systems work for the continent.
Continental unity, technical expertise, and a long-term vision for Africa's role in the world order will be the cornerstones of success to leverage her newfound strategic positions including as envisioned in the Harare Declaration; pushing for reforms of the global debt architecture that equalises loan contraction process reform of debt sustainability frameworks and credit rating assessments and where necessary, agitate for collective default as part of Africa’s new position and consensus on African sovereign debt to allow the continent regain its financial independence.