There has been intensified geopolitical jostling in the Asian sphere towards the African continent in recent years, driven by, on one hand, Asian regional dynamics, and on the other, the opportunities that changes in Africa’s political economy have presented to external players. The promising narrative of ‘Africa’s rise’ has seen a growing number of Asian states vying to hold sway in Africa’s expanding markets and infrastructure development agenda. The struggle for influence is also manifesting strongly in the diplomatic arena. It is no coincidence that Japan’s Tokyo International Conference on African Development (TICAD) has gained more strategic focus – centred on Japanese corporate interests – or that in recent years; India has sought to leverage its relations with the African continent through, among others, the India Africa Forum Summit; and that South Korea now also exercises its middle power ambitions in Africa. Clearly, Africa is a terrain where the resource, energy and security interests of Asia’s major powers converge and at times collide.
This has had a striking impact on how the major powers of the Global North – specifically, the Atlantic sphere – have started to engage with Africa. Development assistance, the traditional framework for relations between Africa and Europe, is being recrafted to more clearly reflect the geostrategic interests of European states. The European Union’s proposed new ‘Comprehensive Strategy with Africa’ carries a range of goals that signify new strategic intent on the part of the EU.
Increasingly too, Western states are redefining their orientation towards Africa in overt resource diplomacy and investment promotion terms. The United Kingdom’s 2020 initiation of the UK-Africa Investment Summit (which was held as the Africa Investment Conference in 2021), and Russia’s creation of a similar forum (namely, the Russia-Africa Summit), are recent examples of a new positioning pivot towards Africa by the Global North. It cannot be overlooked that these new Global North forums are largely reactive to long-standing patterns of engagement that Asian players have established with Africa.
Given the global recovery imperatives that lie ahead in the post-COVID era, it is reasonable to expect that geopolitical jostling for a stake in Africa’s resource economies and infrastructure development agenda will intensify. However, this carries dividends neither for the African continent, which faces a distinct set of recovery challenges, nor for external powers.
From the continent’s perspective, a pathway of international relations that advances Africa’s development interests is more desirable than one where the continent is caught between the competing agendas of the major powers, with little bargaining capacity for the continent. Similarly, for external powers, more can be gained from forging synergies and exploiting complementarities, than rivalry. The trilateral agenda that has emerged in recent years in the arenas of African infrastructure development and renewable energy – some examples of which can be seen between Japan, the UK, India and Turkey – offer more in the way of leveraging opportunities for both Africa and external interests.
Further, it is clear that infrastructure development will assume new urgency in the post-COVID era. However, given the pandemic’s amplifying impact on inequalities, = as well as its long-term, structural consequences for national and labour economies, production systems and markets across Africa, it is also clear that the infrastructure development agenda has to shift. While the mega-projects of the past have a place in Africa’s recovery, the implication is that new blueprints are required for the infrastructure development agenda ahead. These include social infrastructure, and programmes that connect resource and industrial sectors. The African Union’s Agenda 2063 prioritises the sectors of agriculture and science and technology, as well as industrial development. Africa’s sector-based expansion presents a range of opportunities to external actors. In this regard, an important lesson to be taken from China’s role as infrastructure financier, constructor and operator on the continent, and the negative impact this has had in several African states, is that the infrastructure development agenda ahead needs to be built on sustainable financing mechanisms as well as transparency.
Furthermore , although both Asian as well as Western powers have expressed greater economic interest in Africa and have made many diplomatic overtures such as creating/ holding investment summits, existing trade and foreign direct investment (FDI) trends indicate that there remains significant room for expansion and diversification. The cases of Japan and the UK’s economic footprint in Africa are illustrative: Africa’s share of Japan’s global trade is around two percent, while the continent attracts less than two percent of Japan’s total FDI. The UK is the fourth largest investor in Africa, contributing six percent of its total FDI stock to the continent. Yet, Africa captures three percent of global UK FDI. These patterns have remained remarkably constant over the past decade, suggesting that the dividends of Africa’s commodity-based expansion that underpinned its ‘rise’ since the 2010s, have mostly benefited China. Further, in the case of both the UK and Japan, there is significant concentration of their involvement in terms of geography and economic activities. The UK’s African investments are centred on the extractive sector, with more than half of FDI in mining and quarrying, and a third of its investments going to South Africa. In 2018, up to 80% of Japan’s Africa investments were to South Africa.
These patterns are exemplary of an important dynamic in major power engagement with Africa in the contemporary era: that it has largely been shaped reactively to compete with Chinese interests and capital on the continent. Clearly, looking ahead, different bases for engagement have to be established, where other major powers differentiate themselves more effectively from China in terms of their capital and their contribution to the African economy. This, most of all, points to engagement beyond resources and extractives. Much potential lies in diversification, including in sectors such as financing/financial services, the broader services sector, sciences and technology, and green energy. There is also scope for a bigger range of firms from the industrialised world, beyond the multinational corporations, to become active in Africa’s political economy. SMEs have the benefit over MNCs of being able to establish economies of scope; this is a firm-level resource that is advantageous in a fast-changing terrain like Africa’s.
In all, it is certain that with the imperatives that the post-COVID world will face, along with Africa’s long-standing development needs, that the continent has little choice other than to navigate the stormy geopolitical changes. This means engagement with powers along both North-South and East-West axes.
For their part, major powers have an important role to play in Africa’s post-COVID recovery. As suggested above, there are distinct opportunities in a variety of economic sectors and in focused, sustainable infrastructure development on the continent. With the Africa Comprehensive Free Trade Area (AfCFTA) finally entering into force in 2021, the continent’s growth potential is accentuated: the AfCFTA seeks to consolidate a population of 1.2 billion and the combined Gross Domestic Product of 55 member states. Yet it is important to point out that demographic size does not necessarily translate into market size and buying power, and that various structural conditions, including high levels of informality and unemployment, as well as a lack of physical and economic connectivity across the continent, are impediments to AfCFTA’s trade integration objectives.
Further, the continent continues to face long-existing structural challenges – related to governance, political capacity and political strife – that have been compounded by the pandemic. As such, all the economic promise that may lie in Africa’s expansion, has to balance against structural conditions, particularly in relation to governance and peace and security. With this, the most important role for major powers is to support improvements in these dimensions in Africa’s political economy.