Africa needs a strategy for ‘emerging partners’
The global development landscape is changing rapidly with the growing role of China, Brazil and other "emerging" economies. In this new context, African countries have seen a significant increase in trade, foreign direct investment and official development assistance from the South. While China is the most significant partner, interactions are also increasing with India, Brazil, Malaysia, Turkey and several other countries, reducing Africa's dependence on its traditional partners and opening new policy space for African governments.
The changes have been rapid. Africa's total trade with emerging economies grew from just $8.8 bn in 1990 to $148 bn in 2007. Between 2003 and 2009, China forgave $2.57 bn in debt owed by 31 African countries.
However, "While some emerging economies have a strategy for Africa, Africa does not have a strategy towards the emerging economies," notes a new report of the UN Office of the Special Adviser on Africa (OSAA). So that both sides can gain from this relationship, African countries need to adopt a coordinated, coherent strategy and exercise greater ownership over their growing interactions with emerging economies, urges the report, Africa's Cooperation with New and Emerging Development Partners: Options for Africa's Development.
So far, the impacts of this new interaction have been mixed. African consumers have benefited from the influx of low-priced consumer goods. The provision of generic medicines and insecticide-dipped mosquito nets has helped fight disease. New roads and conference centres are being built.
However, manufacturers targeting their own domestic markets have been hurt by competitive imports from emerging economies. In large infrastructure projects, for example, Chinese competition has squeezed South African companies out of the market.
Meanwhile, Africa's exports to emerging markets are still dominated by unprocessed primary products. In China's imports from Africa, the share of oil increased from 22 per cent in 1995 to 78 per cent by 2006.
The main challenge for Africa is how to benefit from the new opportunities, while minimizing the negative impacts. The report urges African countries to take coordinated steps to ensure that cooperation with their new partners brings economic diversification and industrial development in Africa, while also supporting the continent's integration into the global economy.
The report urges African countries to adopt a strategy whereby trade with emerging economies is tied to measures to promote Africa's development and infrastructure needs. When seeking foreign direct investment, African countries should direct such flows to sectors that can stimulate domestic investment, create jobs, spur regional economic integration and boost productive capacity.
For their part, emerging economies must recognize that their long-term access to Africa's natural resources depends on developing a mutually beneficial relationship. Ultimately, South-South cooperation should not be pursued for its own sake, but rather "as a mechanism for ensuring a better quality of life for the world's poor," noted Cheick Sidi Diarra, the UN special adviser on Africa, at the 20 September launch of the report.
David Mehdi Hamam is chief of the policy analysis and monitoring unit and Katrin Toomel is a programme officer at the UN Office of the Special Adviser on Africa.