Is Africa now the future of globalisation?

Columnists

Is Africa now the future of globalisation?

Wednesday, March 4, 2020 0:01

By MARTIN MACHARIA |

I recently travelled to eight countries within Eastern and Southern Africa. These countries included Tanzania, Rwanda, Malawi, Zambia, Botswana, Namibia, Zimbabwe and South Africa. One of my key goals during travel is to immerse myself in the lives of my hosts and their culture in order to show myself how much more I need to learn about the world.

We are currently living in a period where people questioning the viability and indeed the benefits of globalisation both as a concept and as a tool for promoting trade, development and movement of capital and resources.

Many argue that with events such as Brexit, the rise of Make America Great Again, China’s growing power and Russia’s imperial ambitions that nationalism is on the rise at the expense of globalisation.

This is evident from the increase in right-wing political regimes across the Western world and Eastern Europe that are keen on protectionist trade policy, closed borders and less movement of goods and people.

Even as some parts of the world head down this nationalistic, protectionist path, others have opted for a different path, entering bilateral trade and investment agreements aimed at opening markets and lower import duties.

Recently, African countries launched the $3 trillion African Continental Free Trade Area (AfCFTA). According to The Economist, only 15 percent of African exports is to African countries compared to the equivalent figures for regional trade in Asia and Europe are respectively 58 percent and 67 percent underlining significant opportunity.

Africa has signalled a renewed optimism on the growth of intra-Africa trade that will create new opportunities and enhance cultural and economic integration within the continent.

Various experiences including random conversations with traders, cops and fellow travelers in the respective countries drove me to the realisation that while globalisation is usually talked about in the context of the exchange of goods, capital and information between countries, really, the driving force behind it is people.

And African people are on the move. Young Africans are curious, ambitious and keen to learn and exchange ideas. This provides a different lens through which we can analyze and assess the benefits of globalization.

According to Bloomberg’s Terms of Trade segment, the amount of goods shipped around the world is not the best measure of globalisation. And whereas movement in goods may be slowing, that is an incomplete picture that does not capture the digital realm where the exchange of ideas and innovation are constantly happening.

Additionally, traditional trade measures do not reflect the real supply chain. A more accurate measure of trade and economic relationships involves not just where a product is made but where its value is added.

The African Development Bank has said that AfCFTA has the potential to increase the value of intra-African trade by 25 percent and boost total economic output $29 trillion by 2050. For the first time in a long time, Africa has chosen a different path from the west that is appearing to move towards protectionism.

The writer is public affairs consultant in Nairobi.