The 54th World Economic Forum in Davos Switzerland, concluded on Friday, the 19th of January, paving the way for a hot new year full of prospects as well as uncertainties in the world as there are fresh calls for reforms to global governance throughout the panel discussions hosted.
Along with talking about their goals for the year, global leaders from business and politics have been widely reported to have engaged in “positive”, ” forward-thinking ” conversations as they considered solutions that are expected to make the world a better place. But did they? Really? Amid the hush-hush on Ukraine, Gaza, and Secretary Bliken’s rush to leave Davos for West Africa?
UN Secretary-General António Guterres was so much concerned that geopolitical divisions were hindering a global response to challenges like climate change artificial intelligence, and other important matters that are now directly impacting the world’s economy.
Guterres said he foresees generative AI “will worsen inequality”, and condemned tech companies for making profit with “clear disregard for human rights” in this era of ungoverned digital existence. I’m with him on the inequality tangent. It is almost as just yesterday, when I was looking for graphic designers to hire on a contract basis. It was so difficult for me to get the good ones because they preferred to work with more recognised institutions and not a start-up. Two of the reasons they stated were that I could not pay them what they were worth and I could not guarantee the job security that may come from a bigger company. Today, I don’t even have to go looking for designers. AI has solved that for me and it has made it easier for companies to let go of skilled personnel whose outputs can be better delivered by robots.
So, when Guterres said “we have not yet an effective global strategy to deal with” the challenges posed by either climate change or artificial intelligence”, I understood clearly what he was driving at, especially on the AI front.
Although Davos is mostly a private event, its impact on policy in the nations of the world, even nations that are not represented on the big platform, is undeniable; at least, in part because of the growing importance of corporations and their capacity to affect the economic narrative of the nations in which they choose to invest or withhold their money.
In light of this, international talks regarding tensions in the Middle East, Ukraine, and Africa—the very cradle of humanity—took centre-stage this year on the forum’s high-level platforms. As the effects of these themes were assessed by the panellists and the listening audience, naturally, worries about trade, investment, inflation, growth, debt, food, energy, security and the ever-changing political landscape that both large and small enterprises must traverse globally were also explored. Nonetheless, four issues surfaced time and again: climate change, war, artificial intelligence, and the volatility of global economic forecasts.
I will share an opinion on the first three briefly, and move on to what the world’s chief economists have called a highly divergent situation for the global economic outlook in 2024.
My takeaways from the discussions on artificial intelligence, war, climate change, economic uncertainty
Artificial intelligence is an exciting topic everywhere any day. It is described aptly as a disruption with both good and bad news attached to its fast-paced advancement. It is also said to be the primary factor contributing to disinformation across the world, given AI platforms are producing convincing half-truths at the speed of light. Thoroughly thought-through global regulations must be put together and swiftly implemented before any more harm is caused.
And when these regulations are being formulated, Africa must be heavily represented at the frontline.
The forum estimated growth to be 3 percent in 2023. It is 2.8 percent this year, which is a little less. This indicates that compared to the previous ten years, poverty is becoming slightly more pervasive. The world’s wars are impeding growth because they are limiting the potential for investments and commerce due to the spillover effects of the conflicts and coups that are taking place in Europe, the Middle East and Africa
Reviving growth in a highly divergent global economic situation:
There are compelling arguments for a new approach to economic growth that balances long-term sustainability and equity. Although Ngozi Okonjo-Iweala and David Rubenstein acknowledged in their ‘No Recovery without Trade and Investment’ panel that prediction accuracy is challenging, there could be ways to prevent the world from being overwhelmed by the dangers and surprises that these challenges bring with them. Collaboration, alliances, investments in labour, skills and people as well as a new, stronger, more cohesive global economic governance were all ideas that came out of almost all the discussions I have reviewed. For instance, during his speech, Antonio Guterres stated: “We can’t build a future for our grandchildren with a system built for our grandparents”. He further called for the world to start reconsidering how we did things generally. A rebuilding process of course, in my opinion, allows Africa a chance to secure that frontline seat at the table.
While some argue that Davos has become a “talk shop” dwindling in relevance, it is an indispensable platform that provides insight into the thoughts and plans of its attendees, who include billionaires, entrepreneurs, experts, academics, representatives of governments and international organisations.
Africa, Africans and African issues at Davos 2024
A sizable contingent of Africans attended the conference. Delegates discussed strategies to leverage trade opportunities to position Africa as a major player in the global supply chain, despite well-documented barriers—conflict being one of them—that are thrown at us as severely restricting the continent’s potential for wealth.
We leave ourselves up to the pessimistic predictions of the outside world when we engage in these kinds of debates.
I believe that should we choose to do so, we possess the strength to drive away the heavy veil of helplessness that has shrouded us for all these years following colonialism.
We have a new chance to shed the moniker ‘Africa the Sleeping Giant’ and truly rise to our moment if, as we have seen at Davos, the world’s economic structures are gloomy beneath the system of governance it has had for decades and new calls are being made by the likes of UN Chief Antonio Guterres for the world to develop a new governance structure so that the entire world, as dependent on each other, could rebuild and thrive together.
The first-ever Private Sector Action Plan was unveiled at Davos 2024 for Africa. This is an endeavour involving forty international corporations.
The World Economic Forum and the African Continental Free Trade Area (AfCFTA) Secretariat have put together a well-thought-out plan.
Industry leaders in four core industries have committed to goals, strategies and commitments included in the action plan, which is described as a bold and visionary white paper.
With a total value of US$130billion, these industries are automotive, pharmaceuticals, transportation and logistics, and agricultural and agro-processing.
What does this tell you, my cherished reader? These four are giant oil fields in our Alkebulan! With great potential. Because I am not yet a preacher, I won’t ask for a Hallelujah; I will only have you help me continue to walk the paths where this journey leads us.
The problems and the one-sentenced solution for the day
African countries face the pressing problem of accelerating economic growth. The pandemic’s combined consequences with the wars on the continent, the Middle East and Europe have hampered Africa’s attempts to thrive economically even more. Africa had the fastest-growing economies up until 2020. African economies are vulnerable due to their reliance on commodities for income, their dearth of domestic manufacturing, and their high debt loads, as revealed by the twin shocks. Ghana and Nigeria have seen multiple credit downgrades from rating agencies due to our debt profiles; and we are now having trouble raising financing on international capital markets.
In the upcoming decades, the continent is predicted to produce 12 million young people entering the workforce yearly, but only 3 million formal, paid employment are being created for each year. These projections came in from the World Bank in Africa two years ago. Today, the figures are almost irrelevant because as you read earlier, AI and the green transition was a popular topic. Leaders from industry and government emphasised the difficulties that the world’s economies would face in managing both the uncertainties and opportunities the knowledge that, over the next five years, jobs will shift globally.
Sadly, inasmuch as we will be witnessing these shifts, the world economy is weakening, and highly divergent as said by the cchief economists at Davos, and the per capita GDP of Africa is declining at an even faster rate, according to the World Bank, robbing the continent of the advantages that come with having a sizeable, youthful and vibrant labour force, which raises important concerns about what the future holds for young people and how to best utilise AI in anything they do.
To state more facts, growing financial distress among African countries has, in part, stunted economic growth in the continent, creating liquidity issues amid constrained fiscal flexibility.
In less than ten years, the average debt ratio in sub-Saharan Africa has nearly doubled, from 30 percent of GDP at the end of 2013 to nearly 60 percent by the end of 2022. More than half of our ‘vulnerable’ nations have huge debts to clear.
Africa is still a lot powerful. A giant asleep is still a giant unless it is killed in its sleep and severed for spoils. Gory, I know. But the continent still has its power, even with all of these realities in mind. All that are missing are the laws, the policies and the right steps and inputs on the global economic corridors. Playing catch-up after the rest of the world has deliberated and made decisions will not help the world’s situation. So as was appropriately written by Marrianne Williamson, our “playing small does not serve the world” and it is true there is“nothing enlightening about shrinking” so that our past slave masters feel secure having us around. “We are all meant to shine”, why then do we shrink so low and have.