In a historic moment during the recent G20 Summit held in India from September 9th-10th, 2023, the African Union (AU) secured its place as the newest member of the G20, an exclusive group comprising the world’s 20 largest economies.
This pivotal development heralds a new era for Africa, offering a myriad of opportunities to foster trade, economic growth, and development across the continent.
Here is how the AU’s membership of the G20 will serves as a massive boost for African nations, economies, and global trade.
Elevating Africa’s Global Influence
Foremost among the benefits of the AU’s G20 membership is the elevation of Africa’s global influence. As the G20 sets the global economic agenda, AU’s inclusion allows the continent to actively contribute to these vital discussions. Africa, representing a substantial portion of the world’s population and possessing immense economic potential, now stands on an equal footing with other global economic powerhouses.
Championing Sustainable Trade
The AU’s entry into the G20 positions Africa as a champion of sustainable trade and development. This newfound role holds particular significance in the global fight against climate change. Africa boasts a remarkable 60% share of the world’s renewable energy assets, a valuable resource in the quest for a sustainable future. With its G20 membership, Africa can advocate for environmentally friendly trade practices and attract investments in renewable technologies, in which the raw materials to power this revolution is hugely deposited in Africa, thereby aligning the continent with the global shift towards sustainability.
Accelerated Industrialization through AIDA
Africa’s commitment to industrialization is evident through initiatives such as the Accelerated Industrial Development for Africa (AIDA), which has garnered the endorsement of African leaders. AIDA encompasses seven program clusters, including infrastructure development, capacity enhancement, and sustainable financing. By leveraging its G20 membership, Africa can tap into international resources, expertise, and partnerships to expedite industrialization efforts. This acceleration will enhance trade capacities and bolster economic diversification.
Unlocking Wealth through the Commodity Strategy
The African Union’s Commodity Strategy, an integral component of the AU’s Agenda 2063, is a flagship project, which was recently launched aimed at harnessing Africa’s abundant natural resources to drive economic transformation. The strategy envisions a future where Africa adds value to its commodities, extracts higher rents, integrates into global value chains, and fosters diversification with a focus on local content development. With G20 support, Africa can attract investments and forge partnerships that will maximize the benefits of this strategy, to unlock substantial wealth, creating jobs, and reducing dependency on raw material exports for African Countries.
Empowering SMEs and Local Enterprises
Small and Medium-sized Enterprises (SMEs) form the backbone of Africa’s economy. The African Union’s SME Development Strategy aims to integrate these enterprises into global value chains, enhancing their competitiveness. The African Union recently concluded its 2nd Annual MSME Forum, a critical gathering that brought Directors of SME Development agencies in African countries, to discuss and mobilize more African countries to participate in the World Trade Organization’s Informal Working Group on MSMEs. The forum also brought together Development Financial Institutions to deliberate how to provide access to cheap finance to SMEs.
With the G20 membership of the AU, Africa access to markets, investments, and knowledge-sharing opportunities can propel its SMEs onto the global stage, by leveraging the Enterprise African Network. This empowerment will not only drive economic growth but also create job opportunities across the continent, and promote inclusive development.
Transforming Mining for Sustainable Growth
The African Mining Vision (AMV) is Africa’s response to the paradox of vast mineral wealth coexisting with pervasive poverty. The AMV seeks to integrate mining into development policies at various levels, ensuring that mining contributes to local development, protects the environment, and generates fair resource rents. Through its G20 membership, Africa Union can advocate for responsible mining practices, fair revenue distribution, and the inclusion of mining in broader development and trade policies.
These benefits are not confined to Africa alone; the continent’s perspectives and contributions will enrich the G20’s deliberations, promoting more inclusive and sustainable global economic policies.
Africa’s entry into the G20 is a win-win for both the continent and the world, heralding a brighter and more prosperous future for all.