Africa and the G20: collaboration for shared prosperity

Abdel Fattah el-Sisi, President, Arab Republic of Egypt, and chair, African Union

In Osaka, I will have the honour of participating in the G20 summit in my capacity as chair of the African Union. Recently, we celebrated with fellow African nations the entry into force of the agreement establishing the African Continental Free Trade Area, a landmark arrangement aimed at boosting intra-regional trade and unlocking investment potential. This is another step that highlights the promising prospects of Africa as envisaged in Agenda 2063: The Africa We Want. A closer collaboration between Africa and G20 members can help overcome challenges and achieve aspirations for sustainable development and shared prosperity.

Africa’s promising prospects

The reality and dominant narratives about Africa in global markets are changing. While the global economic outlook is morose with a sluggish growth rate, Africa has been growing at 3.5% annually. Moreover, under current forecasts, Africa is home to nine of the 15 fastest-growing economies in 2019. More importantly, the current economic expansion in Africa stands on firm ground, since our middle class is expanding at a remarkable rate. This is a promising development, as it provides for stronger domestic consumer spending, which is expected to double by 2025 to reach $2.1 trillion.

Furthermore, it implies more sustainable tax revenues as well as more socio-economic stability.

Africa is set to be the fastest-growing continent in terms of population, accounting for more than half of the global population growth until 2050. African nations need to guarantee this means a young, healthy and skilled population. This requires us to do more to end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases, address the growing burden of non-communicable diseases and invest more in education in order to reverse the forecast rise in extreme poverty by 2030. In addition to sustained political will, more resources coupled
with bolder development cooperation will be necessary.

One avenue is to scale up and accelerate Africa’s industrialisation process, which is expected to double the continent’s manufacturing output by 2025, creating an additional 14 million jobs, according to recent studies. We are working closely with the United Nations Industrial Development Organization, the African Development Bank and other partners in this area to bring about an industrial transformation in Africa. In this regard, aligning G20 initiatives with industrialisation priorities in Africa is a much needed endeavour.

Amid mounting global trade tensions, African intra-trade is rising, without being limited to commodities as has historically been the case. Commerce in manufactured products, including technology-intensive ones, is expanding. In this vein, African leaders have pushed hard to agree to the AfCFTA to benefit our consumers, enable businesses to profit from economies of scale and facilitate the formation of regional value chains. Furthering regional integration is one of our main priorities under Egypt’s 2018 African Union chairmanship.

Persistent challenges

Despite these promising signs, Africa’s share in global gross domestic product remains a tiny figure, around 2.8%. It conducts less than 3% of total trade and accounted for less than 3% of foreign direct investment inflows in recent years. Hence, the challenge of integrating Africa in the global economy and developing its productive capacities is very much acute and persistent.

Other structural challenges such as high levels of indebtedness and the infrastructure gap continue to hamper our common development efforts. In the past, debt relief initiatives helped alleviate financial pressure on many countries. Currently, at least 16 African countries are either in debt distress or at high risk of debt distress. These debts take a toll on a country’s capacity for public spending on medium- and long-term development priorities and its ability to mitigate shocks.

Infrastructure development has been credited for leading much of Africa’s growth during recent years. Yet there
is an estimated infrastructure need of $130–170 billion a year, with a financing gap that reaches $68–$108 billion. Investment in infrastructure is challenging: it requires multi-year sustained financing, which is difficult to secure for any government, and more so in developing African nations. Such investment would promote connectivity across the continent and provide new opportunities for development and job creation. The G20 Compact with Africa has a key role to play in this area.

For instance, projects to upgrade digital infrastructure are under way in many parts of Africa. They are critical to expand opportunities for e-commerce and harness the potential of digitalisation. But today, only 22% of Africans have broadband subscription, compared to 97% in the developed world. In this regard, access to affordable technologies remains a challenge that needs to be addressed in collaboration with partners and businesses.

Further cooperation on global challenges

Africa is not immune to global challenges. It has been hit hard by the effects of climate change. Africa’s highest mountain, Kilimanjaro, has seen its iconic glaciers shrinking, Mozambique was hit by unprecedented cyclones earlier this year and the Nile delta is being eroded because of rising sea levels. Africa has been paying the price of a global warming that it did not cause. Combined with its detrimental impact on water resources, climate change has been hard-hitting in rural communities in Africa. Equally worrying, evidence has shown that women are more likely than men to be affected by climate change, reversing decades-old efforts aimed at women’s empowerment.

More recently, automation and the broader fourth industrial revolution have been provoking a high level of global uncertainties, with predictions of job losses varying widely from 20% to 80%. We should work together to expand opportunities where artificial intelligence and other frontier technologies could be employed to address developmental needs and favour job creation in agriculture development, healthcare provision and education services.

This year, we are looking more closely among African nations at avenues to jointly overcome challenges and harness opportunities for growth and job creation. In the same vein, Africa and G20 countries can collaborate closely in a spirit of partnership and mutual respect, with the objective of leaving no one behind, as envisaged by the 2030 Agenda for Sustainable Development.