Emerging global powers are turning their attention to Africa, forging new trade deals and investing heavily in the continent in the wake of a resources boom and a widening consumer class, according to LSE IDEAS.
The revival of Africa’s fortunes is outlined in a new report issued by the London School of Economics and Political Science today, which is critical of the recent G8 Summit’s failure to acknowledge the shift in global power relations.
The LSE Ideas report describes Africa’s growing importance in the global supply chain, with the continent now home to seven of the 10 fastest growing economies in the world.
The dramatic change in Africa’s fortunes is attracting the interest of China, India, Brazil and Korea, all emerging powers who are strengthening their trade ties, financial investment and diplomatic activity across the continent.
Dr Chris Alden, Head of the Africa Programme at LSE, says the BRICS countries alone (Brazil, Russia, India, China and South Africa) now account for US$340 billion of Africa’s total trade, while Europe’s pre-eminent position has been reduced to a 30 per cent share.
“With China leading the way, emerging powers are bringing financial capital, business acumen and new models of development and diplomacy to the continent,” Dr Alden says.
“In doing so, they see in Africa a resource partner and export market, and a relatively uninhabited geopolitical space in which they can leverage their growing influence. In many respects, this is an expression of wider global trends characterised by the shifting balance of wealth and power away from the US and Europe to the rapidly growing economies.”
The interaction with the emerging powers comes in many forms, from the expansion of Indian mining companies into Zambia and Democratic Republic of the Congo, to the infrastructure construction undertaken by Chinese firms across the continent.
“Less heralded, perhaps, has been the activism of Turkish diplomacy and NGOs in Somalia and Brazil’s solidarity discourse rooted in cultural and ethnic ties,” according to the report.
Personal income in Africa is rising, linked to the production of a 300 million-strong consumer class, although roughly half of all Africans still subsist on US$1.25 a day or less, while modest overall gains have been made in the fields of health and education.
Dr Alden says despite Africa’s return to the international spotlight, G8 leaders largely ignored the continent the recent G8 in Northern Ireland.
“Africa featured primarily as a rising security threat, in contrast to the 2005 Gleneagles Summit where the leading industrialised nations pledged to double their aid to the continent by 2010. The sting of domestic economic gloom has long since muffled any contrition felt by many G8 governments unable to meet their aid commitments.”
Africa’s reviving fortunes come with a caveat, however.
“The impact of these countries deepening their political, economic and security ties across the continent should not be overlooked. Africa may be in the limelight, but the continent’s history is one of false dawns and unfulfilled potential: the danger is that African states will be unable to capitalise on the attention currently being lavished upon them,” Dr Alden says.
The full LSE Ideas Africa Report can be downloaded at http://www.lse.ac.uk/IDEAS/publications/reports/SR016.aspx
21 June 2012