African foreign policy: looking west together

It is clear that we must find an African solution to our problems, and that this can only be found in African unity. Divided we are weak; united, Africa could become one of the greatest forces for good in the world. – Kwame Nkrumah

Africa’s history with the West (when I refer to the west I am referring to Europe and the USA) is a tortured one. Slavery, colonialism, neo-colonialism, Cold War proxy conflicts all colour a set of relationships where the West still holds the upper hand. Whether it is trade, security, or healthcare policy, through aid, loans, the IMF, the World Bank, the WTO Africa still gets raw deal on the international stage.

The West however, is in a peculiar moment, both Europe and America are turning more insular. In America this is embodied by Trumps ‘America First’ policies which are alienating allies and narrowing American interests and engagement around the world. Sec. Tillerson’s recent trip to Africa was centred on security and criticism of China, but unlike previous administrations there was no Power Africa or PEPFAR (The President’s Emergency Plan For AIDS Relief) nor much talk about democracy or development, clearly the US agenda on the continent has narrowed. Europe is grappling with Brexit, populist right-wing politics, holding the EU together, a retreating America and a resurgent Russia. Their major engagement on the continent also centres around security with the addition of stemming the flow of migrants. Some in foreign policy circles see this shift inwards from the west as a problem for the continent. That without western money and support the war on terror will lag, aid and development funding will shrink and advocacy for democracy and human rights will be blunted. However, I see this as an opportunity, the perfect time for Africa to start playing a greater role on the world stage and pursuing its key interests. Africa can only do this if it works together, no one African country has the clout to be a player on the world stage but acting in concert as a continent Africa can make real changes to the terms on which the rest of the world deals with it and benefit people around the continent.

Too small to matter

Sub-Saharan Africa has a combined GDP of $US 1.5 trillion[1], which may seem large but is less than half of the US$ 3.9 trillion[2] spent by the US government last year. The largest economy in Africa is that of Nigeria with a GDP of US$ 404 billion[3], the most valuable company in the world is Apple with a stock valuation of over US$ 900 billion[4]. I cite these figures to illustrate a point, individually on the world stage African countries are economic rounding errors, Africa is largely talked in terms of natural resources or as a market with potential. The fundamental issue with this is that African economies operate in a world where the rules of the game are still dominated by Western nations and institutions. Trade rules are governed by the WTO, banking rules by western regulators, investment treaties are lopsided against developing nations, and development spending and their associated policies conform to priorities and ideals of the states that fund institutions like the World Bank. That African nations operate at a disadvantage on the world stage is not news, the key issue is what policies can African nations adopt to rectify this.

A united front: trade, tax and investment

While Africa is currently a bit more than just a drop in the ocean in terms of economic size, the continents GDP is projected to grow to approx. US$ 30 trillion[5] over the next 40 years and Africa will matter. However, the continent cannot afford to wait that long, the lopsided terms investment with which Africa deals with the west will continue to siphon off much-needed income and asset ownership off the continent, and trade rules continue to limit policy options (such as protecting infant industries) for African governments. Individually African nations have no hope of changing the status quo, as a continent with a smart policy approach at a time where western engagement in the world is limited by their own domestic focus, things can start to change.

Getting African countries to act together is a well-known headache. Africa has for over fifty years heard big talk from leaders on broad pan-African cooperation, numerous regional and trade blocs and the OAU and AU with ambitious agendas, though they never seem to get too far. In my view this is because African leaders have bitten off more than they are willing to chew with ambitious programs which have neither the political support, funding or organisational capacity to succeed. Rather than overambitious agendas, it may be more productive if African countries coalesce around a defined set of issues which are cross cutting and beneficial to all, making it easier to form and maintain a joint agenda. When it comes to a prospective joint African foreign policy to the west there are 3 issues which cut across all countries and which they could stand to benefit from; trade, taxes and investment treaties.

Trade, taxes and investment treaties.

Trade – unfair terms of trade faced by African countries, taxes – the inability to tax profits made in Africa and investment treaties which unfairly disadvantage African states in international arbitration and de-emphasize the link between FDI and development. These may seem narrowly economic and non-people or development focused agenda, however these issues have real impacts on people’s lives and livelihoods. Unfair terms of trade put African farmers and businesses at a disadvantage and restrict the policies that government can employ to support private sector growth. The ability of global corporations to avoid and transfer taxes off the continent means Africa loses out on more than US$ 50 billion[6] a year in tax revenue. If that were an African economy, it would be the 10th largest on the continent. Bilateral investment treaties which are an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state, protect the investments of foreign companies from what they see as unpredictable local courts and politics, forcing disputes to be settled in international arbitration centres which usually rule in favour of the investor over other concerns such as development, the environment or labour rights.

Why these three issues? First, these are three issues upon which the West is still the most influential, if we can force changes in western policy it can change the way others around the world and key institutions engage with Africa. Secondly these are three issues which can be connected to wider and more pressing concerns that the West has around security and migration. With better terms of trade and fairer investment, Africa has a much better chance at creating more and better jobs, governments will have more development policies open to them, and more revenue will allow governments to invest more in job creation, and anti-terrorism initiatives. Third, with tax evasion a priority even in the West making tax evasion in Africa part of the narrative is not an impossibility. Finally, this set of issues is narrow enough and beneficial enough to most African states that a coherent negotiating position can be built out of it.

So, what exactly is it that Africa should be aiming for with this new focused foreign policy. On trade the goal is twofold, first shielding African farmers from the hefty agricultural subsidies that western farmers get and allows them to dump cheap produce on the continent and second is loosening the rules that stop African nations from adopting industrial policies such as infant industry protection and product imitation that both the West and East Asia used. On taxes, the goal is to tax profits where they are made with the goal of ensuring that money made on the continent pays its fair share. On the investment treaties it would be impossible to change them whole sale rather the goal would be to insert clauses that make protection of the environment, labour and development into the body of the treaties rather than just as principles in the preamble.

To achieve these goals African countries would have to present a united front, combining their influence, negotiating teams and knowledge to match those of western nations. Crafting and deploying public narratives in Africa (that together they are fighting to free the continent from restrictions and better the lives of African citizens) and in the West (that doing this wont cost strained public finances anything and has the potential to stop the migrants and contain the security threat).

For too long African foreign policy has either been a tool for the West or the weak entreaties of states wielding no influence. The West is weaker and less united than it has since at least the 1930s, facing challenges externally while dealing with internally divisive politics and social cleavages. This is the perfect time for Africa to start changing the status quo, to start changing the terms on which the West sees and deals with Africa. To do so Africa must look West but do so together, around a common set of focused objectives that everyone can rally around and that would resonate with the wider public at home and abroad. Even if only half the agenda succeeds it would be a victory for the continent and the first step towards an African foreign policy agenda finally free from its western past.

 

 

 

[1] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=ZG

[2] https://www.cbo.gov/publication/52408

[3] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=NG

[4] https://uk.reuters.com/article/us-apple-stocks/apple-market-value-we-may-need-a-bigger-chart-idUKKBN1D20BQ

[5] http://blogs.lse.ac.uk/africaatlse/2013/12/05/african-wealth-will-double-every-decade-for-generations-to-come/

[6] https://www.theguardian.com/global-development/2015/feb/02/africa-tax-avoidance-money-laundering-illicit-financial-flows