AU must use G20 membership to boost Africa’s role in shaping global financial systems

At the 19th Group of 20 (G20) Summit in New Delhi, India, in September 2023, the African Union (AU) became a permanent member of the bloc. Before AU membership, South Africa’s efforts to advance Africa’s interests as the continent’s sole representative had been insufficient since the group’s inception in September 1999.

Over the years, Africa has advocated for increased involvement in international organisations and reforms to global financial systems, driven by the continent’s recognition of the need to secure a more substantial role in global decision-making processes and a greater say in discussions and decisions that directly affect its interests.

The G20’s decision to include the AU as a permanent member reflects its recognition of Africa's economic potential and importance as a strategic partner. 

This acknowledgement is based on several significant factors such as Africa’s combined gross domestic product of $3-trillion, its abundant renewable energy resources accounting for 60% of the global total, its large youth population of more than 400 million aged 15 to 35 years, and its substantial mineral deposits crucial for low-carbon technologies.

The AU’s admission, therefore, presents an opportunity to strengthen African agency. However, the organisation needs to adopt a unified position to optimally leverage this development.

The AU’s admission as a permanent member of the G20 forum represents an opportunity to address longstanding imbalances – particularly the marginalisation of Africa in global economic governance. 

Historically, the continent has – compared with other regions – had limited representation in key international financial and economic decision-making institutions such as the Group of Seven, the International Monetary Fund and the World Bank.

By joining the G20, the AU gains a crucial platform to seek assistance from fellow bloc members in addressing Africa’s developmental priorities, as outlined in Agenda 2063.

Additionally, the AU can leverage the forum’s support to tackle the significant issue of illicit financial flows, which results in an annual loss of about $88.6-billion.

Moreover, permanent membership in the forum opens up opportunities for Africa to increase export revenues to G20 countries and participate in decision-making processes to tackle the climate crisis from the perspective of the most affected continent.

The AU’s newfound status as a permanent member of the G20 is not a guarantee of immediate influence. Individual African countries face distinct challenges based on differences in economic development, infrastructure deficiencies and political stability.

These issues present opportunities for cooperation and collective action through the AU which has struggled to effectively address the challenges due to its lack of supranational authority. This longstanding dilemma underscores the potential difficulty of effectively representing the unified interests of the continent in the G20.

The chair of the AU Commission, Moussa Faki Mahamat, speaking during the 37th Ordinary Session of the Assembly of the African Union in Addis Ababa, Ethiopia, in February 2024, criticised African leaders for their habit of making ambitious decisions without the requisite political will to carry them out.

This reality carries significant implications for the credibility of individual African states and the collective integrity of the pan-African organisation. 

Between 2021 and 2023, only 7% of the decisions taken by African states at the AU were translated into tangible action.

Mahamat highlighted that the lack of cooperation was evident at the member state level, and within regional economic communities where AU decisions were frequently disregarded or violated. 

Analysts have argued that the weakness of the continental body is a deliberate outcome of member states’ preferences to limit the powers of the organisation.

This contradicts the principles outlined in the constitutive act of the AU, wherein member states commit to “taking all necessary measures to strengthen common institutions and provide them with the necessary powers and resources to enable them to discharge their mandates effectively”.

Moreover, African countries often prioritise bilateral relations, resulting in negotiations focusing on individual interests rather than collective ones. This lack of unity has been evident within the AU, particularly in decision-making processes.

For instance, during the Libyan uprising against Muammar Gaddafi in 2012, Nigeria, South Africa and Gabon, as non-permanent members of the UN Security Council in 2011, supported Resolution 1973. This permitted international intervention in Libya, which led to criticism over a lack of coordination between the AU Commission and Africa’s representation at the Security Council in safeguarding the AU’s position.

Additionally, the lack of unity is further illustrated by historically low levels of intra-African trade, the second lowest among all regions globally. 

Intra-African exports account for 17.73% of total exports, compared to significantly higher percentages in the Americas at 52.68%, Asia at 58.47%,  Europe at 68.10% and Oceania at 6.41%.

Significant obstacles to intra-African trade include high non-tariff barriers, limited economic diversification, inadequate production capacities and insufficient infrastructure. Hence, the AU must prioritise identifying its strategic interests to harness the comparative advantage presented by the G20. 

This necessitates the formulation of negotiation strategies tailored to safeguard African interests.

Permanent membership of the G20 allows the AU to advocate for reforms in the world’s financial architecture, and to shape global economic policies to benefit African interests. Accomplishing this goal may, however, necessitate a recalibration of the continental body’s diplomacy in three ways.

First, the AU must discontinue participating in international engagements without a clearly defined agenda. To achieve this, there is a need to establish a follow-up committee to collate inputs for presentation during G20 meetings, and monitor as well as track the G20’s agenda, decisions and commitments. Establishing such a committee would amplify the continent’s voice within the G20 forum and strengthen the pan-African organisation’s agency, enabling it to identify areas where further action is required.

Second, the AU must allocate resources towards capacity-building programmes to strengthen its technical expertise and negotiation skills. This investment is crucial for empowering the organisation’s representatives to engage effectively in G20 discussions.

And third, as the agenda of the G20 extends beyond economic and financial matters to include geopolitical issues such as infrastructure, peace and security, global governance, environmental concerns and international terrorism, an opportunity arises to strengthen cooperation between the AU and G20, aligning with the continent’s development agenda.

The AU could leverage the competencies of the G20 forum members to facilitate the implementation of its flagship initiative, the African Continental Free Trade Area, thereby advancing the vision of a unified and integrated Africa.

Various G20 presidencies, such as France in 2011, China in 2016 and Argentina in 2018, have addressed development issues, including infrastructure and industrialisation – which are directly relevant to African countries. These instances illustrate the alignment of G20 initiatives with the AU’s Agenda 2063.

The alignments have, however, led to few substantive policy actions – presenting the AU with the opportunity to articulate Africa’s priorities, encompassing sustainable development, infrastructure investment, debt relief, climate change adaptation, and promoting inclusive growth.

Through consistent and clear articulation of these priorities, the AU can steer the G20 agenda towards solutions that foster collective benefits for the continent and lead to achieving the vision of a prosperous and vibrant Africa by 2063. DM

Hellen Adogo is a Researcher at the University of Johannesburg’s Institute for Pan-African Thought and Conversation.

Samuel Igba is a postdoctoral Research Fellow at the University of Pretoria’s Centre for the Advancement of Scholarship.