Africa: trade, democracy or both?
The 20th OECD international economic forum on Africa, which takes place today, is a propitious occasion on which to take stock of Africa’s current position, politically, economically and - of course - in terms of COVID-19.
In its latest ‘Freedom in the World’ report, Freedom House marks 2019 as the 14th consecutive year of global democratic decline. Africa has not been spared this trend. And given major democratic setbacks on the vast African continent in 2020 into 2021, it is safe to assume that this trend is continuing.
Notable backsliding includes the violence, repression and fraud surrounding Uganda’s elections in January this year. Popstar and opposition leader Bobi Wine, with whom the FNF has a relationship, was subjected to house arrests and relentless threats. He has had no choice but to approach the domestic courts to nullify the election result. Yoweri Museveni (76), who has been in power since 1986, exemplifies the use of nominal elections to perpetuate his power along the lines of Vladimir Putin. This is a wider trend: token elections but little substantive democracy.
Another regrettable example of this trend is to be found in Tanzania, where dramatic scenes unfolded during the 2020 elections. These elections were also marred by violence, repression and fraud. Since John Magufuli’s election to power in 2015, the country has seen a dramatic curtailment of fundamental democratic freedoms and witnessed a swift slide into authoritarianism.
Ethiopia’s democratic trajectory was, until recently, manifestly upward in light of various reforms introduced by Prime Minister Abiy Ahmed after he took office having won a democratic election in 2018. The Prime Minister concluded a historic peace agreement with Eritrea, which paved the way for his Nobel Peace Prize in 2019. However, hopes for a democratic ascendency in Ethiopia have come to an abrupt halt as a result of ethnonationalist challenges to the federal constitution of the country. This has brought the country to the brink of civil war, and has resulted in repressive government measures.
The rise of China has come to challenge the widely accepted position that democratic advancement was a precondition of sustained economic development. But China’s authoritarian political system and hugely successful economy have led many on the African continent to reconsider this long-held assumption. The unanswered question is whether - in an African context - economic development may be secured over the long-run without democracy.
China’s footprint in Africa is significant, and as it grows so does China’s influence - both political and economic. A substantial amount of African infrastructure projects are either being funded or implemented by Chinese companies (State Owned Enterprises in particular), oftentimes both. This trend emerged well before China’s Belt and Road initiative was publicised. China, which has a significant interest in Africa’s raw materials amongst other things, is now Africa’s largest trading partner.
Chinese companies are virtually always able to bid for infrastructure projects at lower costs than western countries, but more often than not, these projects come with large debt owed to China. The African reaction to Chinese involvement has been mixed: some have welcomed China’s willingness to invest and its indifference to local authoritarianism while others have resorted to calling this a new kind of colonialism. Between 2010 and 2016 alone, African countries went from owing US$10 billion to over $30 billion. In light of this, one must give serious consideration to the question of whether African countries are likely to become further enmeshed in China’s economic foreign policy, as well as emulate the Chinese model of governance, or whether the merits of democracy in Africa will reassert their importance. One issue for the future is whether the USA and Europe will seek to renew their efforts to engage African countries and to encourage liberal democratic values.
Also of significance is the establishment of the African Continental Free Trade Area (“AfCFTA”) which came into force on 30 May 2019 after being ratified by 22 African countries. Its aim is to create the biggest free trade area in the world in terms of the number of participating countries (55). The project is ambitious in various respects, and there are many challenges that it faces, both internal (especially in the form of consensus around tariffs) and external to the project.
One of the largest obstacles overall comes in the form of poor infrastructure, a project-external issue with complexities of its own as highlighted above. Other major obstacles include underdeveloped regional value chains, poor manufacturing capacity, weak export specialisation, long-standing export of primary commodities to traditional markets as well as expensive and complicated customs between African countries.
Here, an important question arises: first, will African countries commit to the goals of AfCFTA or allow the primacy of sovereignty and domestic protectionism to flout the ambitions of the free trade project? AfCFTA, unlike the origins of the EU, is not a political project to use trade as a bulwark against authoritarianism. Instead, it is an economic initiative without obvious ambitions to instil liberal democracy as a political system in member countries.
Finally, the catastrophic consequences of COVID-19 on the continent cannot be underestimated. Tanzanian President John Magafuli has claimed that the country is ‘Covid-free’, and at the time of writing this article, Tanzania has only had a total of 509 cases and 21 deaths, with no new cases since the middle of last year - according to official statistics. Reality, however, suggests a very different story. The severe undercounting of COVID-19 cases and deaths on the African continent - whether due to rogue leaders, abysmal healthcare systems, weak statistical capacity - or a combination of all three - deserves far more attention than it is getting. The devastating effects - both intrinsic and extrinsic - of the pandemic remain to be seen. It is not without reason that one of The Economist’s cover stories earlier this month was ‘Africa’s long covid - the toll on growth’.
If frank engagement takes place, the discussions at this year’s OECD forum will be anything but easy and straightforward.
Cecelia Kok is the Head of Research and Advocacy Projects at FNF South Africa.