- Every so often, Africa is being forced to choose sides between China, Russia, and the West.
- However, to win big, Africa must speak in one voice and trade as a unit in the new world order
- What’s more, Africa’s vas resource endowments can strengthen the continent’s resilience of its Transatlantic Alliance.
From friend-shoring brought about by COVID-19, then the Russia-Ukraine war, and now escalations in conflict in the Gaza strip, a new world order is taking shape, and Africa must align itself.
The big question for Africa is who to ally with and who to forego. Alignments with China are almost unavoidable, yet they place African economies at loggerheads with the West. While support for Israel pays off, it turns African countries into easy targets for the increasingly complex terror networks taking root on the continent.
Then there is the need to diversify sources of food and fertilizer imports, and even when trade is possible, the supply chain route becomes a problem.
By definition, friend-shoring or allyshoring refers to the act of manufacturing and sourcing from countries that are geopolitical allies. This makes friend-shoring very much synonymous with forming a trading bloc just short of favorable trading pacts characteristic of trade blocs.
Essentially, friend-shoring has brought about the rerouting of supply chains to countries that are seen as politically and economically safe or low-risk. Countries or traders are having to take sides to avoid disruption to the flow of business following the disruption of traditional trade routes.
The US has made it abundantly clear that it intends to obtain components and raw materials from those it deems as “friendly countries with shared values.”
“Rather than being highly reliant on countries where we have geopolitical tensions and can’t count on ongoing, reliable supplies, we need to diversify our group of suppliers,” asserted US Treasury Secretary Janet Yellen.
“We have a group of countries that have strong adherence to a set of norms and values… and we need to deepen our ties with those partners and work together to make sure that we can supply our needs for critical materials,” she explains.
That be as it may, the question obtains: which African countries fit the description of ‘friendly countries with shared values’ as defined by the US? Is an African country that trades with China, which the US considers not to have shared values, going to be considered a friendly nation to policymakers in Washington?
Take, for example, major US companies such as the tech giant Apple that have made friend-shoring moves and shifted their iPhone production line from China to India. This is a huge statement that has even bigger financial implications.
Consider this, Reuters reports that “only 5 per cent of Apple products are made outside of China, but recent JP Morgan analysis suggests this could rise to a quarter by 2025.”
“The practice (friend-shoring) has stoked concern within the international community about the possibility of further geopolitical fragmentation and deglobalization of the world’s economy,” writes.
The question becomes: is the new world order a fragmented one, or as the World Economic Forum (WEF) puts it, “is this the decline of interdependence between nations, global institutions, and enterprise?”
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Can Africa plug into new world order as a trade bloc?
Rather than individual African countries attempting to take sides, this is perhaps the time when the continent needs to speak in one voice. To do so, Africa can use its newly formed trading bloc to make significant moves in business.
Africa represents 54 countries and it were to trade as such, it would make it impossible for any other nation in the world to isolate it, giving the new world order narrative an African flavour.
However, a risk abounds as individual countries can easily be isolated because most African countries produce similar raw materials.
“As the Transatlantic Alliance strives to ensure successful defense of a rules-based international order, expand markets, build supply chain resilience, and reduce strategic dependencies on Russia and China, geopolitical and economic tailwinds favor Africa as an investment destination,” notes the World Economic Forum.
To exercise its power, the WEF advises that; “however, Africa must come prepared with a unified, clearly-articulated theory of development and philosophy of engagement.”
Globally, two major great-power sides are competing and Africa is caught up in the line of fire. On the one hand, you have what the WEF calls the “Transatlanticism’s vast network of democratic alliances” and on the other hand you have the “authoritarian surveillance-state systems led by Russia and China.”
At the moment, no single African country can avoid trading with China or Russia yet in the same vein, none can muster the courage to antagonize the US-led “Transatlantic vast network of democratic alliances.”
The Transatlantic Alliance includes the US and Canada in North America; and a NATO-EU strategic partnership between member-states of the North Atlantic Treaty Organization (NATO) and the European Union (EU).
All these are major powerhouses with historic influence on Africa and major trade pacts that African nations cannot afford to lose like the US’ AGOA trade deal with East African countries.
While the US classifies Russia as “an immediate disruptive threat to the free and open international system that recklessly flouts the basic laws of the international order,” Africa is almost entirely reliant on Russia for cereals and fertilizer well into the foreseeable future.
In other words, Africa’s agricultural productivity almost depends entirely on Russia. It should be noted that the agriculture sector employs over 80 percent of Africans and represents a significant percentage of its GDP.
What’s more, African economies are dependent on fuel from Russia. Yet, Russia’s invasion of Ukraine caused disruptions at Black Sea ports and forced a spike in fuel prices and subsequently triggered higher commodity prices, costly food, high inflation, and it even reduced financing flows into Africa.
“Russia also undermines constitutional order in Africa by engineering security-for-resources dependency with autocratic regimes, especially in the Central African Republic, Mali, Burkina Faso, and the geopolitically important Sahel region,” notes the World Economic Forum.
China is currently Africa’s biggest investor in terms of Foreign Direct Investment (FDI) flow. Yet this big investor is considered by the US and the Transatlantic Alliance as ‘its most capable strategic competitor.’
The WEF says the US and its allies consider China as “the only country with both the intent to reshape the international order, and, increasingly, the economic, diplomatic, military and technological power to advance that objective.”
“For instance, China does not adhere to global trading norms, choosing instead to double down on an authoritarian state-centered, non-market economic system, which reinforces a zero-sum dynamic where China’s growth and success come at the particular expense of Transatlantic Alliance countries,” explains the WEF.
So as the ‘big boys’ flex their muscles, Africa needs to make a stand and it can only do so effectively if it speaks in one voice through its African Continental Free Trade Area (AfCFTA).
“As the Sino-Russian axis of autocracy continues to challenge long-held security and economic assumptions, Africa has become an invaluable partner in the Transatlantic Alliance’s goal of strategic resilience. Cooperation with Africa may build on existing strategic frameworks, including Africa-EU Partnership and NATO-AU Cooperation, complemented by bilateral relations between member-states,” the WEF notes.
The WEF adds that African nations will comprise 25 per cent of the world’s population by 2050 and, therefore, are legitimate stakeholders in the international new world ord
“The 54 nations of Africa are the largest voting bloc in the United Nations (UN) General Assembly, and their vote will be crucial to protect the legitimacy and values of a rules-based international order.”
“Africa’s resource endowments can strengthen Transatlantic Alliance’s resilience against strategic vulnerabilities to Russia’s weaponization of hydrocarbons, and China’s coercive policies that distort global markets.”
The UN explains that Africa is home to 30 per cent of the world’s mineral reserves, eight percent of the world’s natural gas, and 12 per cent of the world’s oil reserves. Africa also has 40 per cent of the world’s gold and up to 90 per cent of chromium and platinum.
Likewise, Africa has the largest reserves of cobalt, diamonds, and uranium and is also home to 65 per cent of the world’s arable land and 10 per cent of the planet’s internal renewable fresh water source.
In recognition of these strong economic facts, it is time that Africa does not make trade deals from a weak end, Africa should no longer be an innocent bystander nor a victim, no, it is time for Africa through its AfCTA to make a stand.
Whether it be trading with the China-Russia-led authoritarian bloc or the Transatlantic Alliance, Africa should realize its power and significance and make pacts that favor its people-centered development policies.
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