According to the Global Risks Report, some of the most severe risks the world may face over the next decade against a backdrop of rapid technological change, economic uncertainty, a warming planet and conflict is one that would not easily rebound from continued shocks. As cooperation comes under pressure, weakened economies and societies may only require the smallest shock to edge past the tipping point of resilience.
“Geoeconomic rifts” have become a key feature of today’s global order, changing the way trade works, the way money works, and how politics work. Analysts argue about these rifts in terms of big powers like the US, EU and China, but they have effects that go far beyond global power plays. This is clearest in Africa, which is navigating the complicated world of global trade and growth while economic paradigms and alliances are changing all the time.
There are disagreements about trade, investment and growth that are at the heart of these geoeconomic splits. One side is the traditional form of globalisation led by the West, which includes free trade agreements, multilateral institutions, and aid for development. AfCFTA and the Belt and Road Initiative are two examples of the growing trend of economic nationalism and regionalism. These different points of view show how hard it is to balance the advantages of globalisation with the need for independence and self-reliance. In the traditional model, working together can lead to more market entry and economic growth. On the other hand, economic nationalism and regionalism put more emphasis on working together to support local growth in domestic industries.
African countries need to be tactful as they try to navigate these rifts. One side of things is China’s Belt and Road Initiative, which offers business opportunities and new infrastructure. A lot of African countries have been very open to Chinese funding because it promises to bring them together and help their economies grow. However, this increase of capital comes with its own problems, such as worries about the long-term viability of debt, damage to the environment, and effects on society. On the other hand, regional unity and economic cooperation are being pushed through programmes like the AfCFTA. By encouraging trade within Africa and coordinating trade policies, the AfCFTA could help the continent’s economy grow and become less dependent on markets outside of Africa. To reach this potential, however, many problems must be solved, ranging from practical issues to strong protectionism among member-states. African countries are at a crossroads because of these opposing forces. They could become too dependent on one trade partner if they give in to the allure of Chinese investment. Or do they put more effort into regional unity, which could turn off investors from other parts of the world?
The rise of economic nationalism in traditional Western powers makes things even more complicated. Protectionist views are growing in places like the US and the EU, making it harder for African producers to get to important markets. Tariffs, trade hurdles and non-tariff measures could undo the progress made over many years of opening up trade and markets. African exporters have to rethink their trade plans and look for new trading partners because of these problems. To depend less on Western markets, they need to look for new ones in Asia, Latin America and the Middle East. To make the economy stronger and more self-sufficient, African countries should also work on improving regional economic cooperation and trade within Africa.
African leaders need to take a more nuanced and strategic approach to trade and growth in this situation. They need to make the most of the chances that programmes like the Belt and Road Initiative and the AfCFTA offer while lowering the risks that come with being economically dependent on other countries and letting outsiders get involved. To do this, strong policies at home, investments in infrastructure and people, and a dedication to sustainable and inclusive growth are all needed. In addition, African countries need to get involved with the rest of the world to change the rules of the game so that they benefit. To do this, we need to push for fair and balanced trade deals, improve regional institutions, and form partnerships based on mutual respect and goodwill. By standing up for themselves on the world stage, African countries can make sure they are not just players in the game of geoeconomic rifts but also shapers of their own futures.
When we talk about geoeconomic rifts, the idea of choice is very important. African countries shouldn’t just accept the results of changing global dynamics; they should take action to control their own economic futures. For this to happen, the traditional story of Africa as a passive receiver of aid and investment needs to be changed to one in which Africa is an active player in global trade and development. Using technology and new ideas is one way to show that you have control. The world is becoming more digital, and African countries have a unique chance to skip standard development paths and use technology to boost their economies. Agenda 2063 and the African Digital Transformation Strategy are two examples of projects that use technology to help solve important problems in development. These problems include making it easier for people to get an education and medical care, increasing the output of crops, and encouraging people to start their own businesses.
Furthermore, African countries should put a high priority on investing in both physical and digital infrastructure to improve connection and make trade easier within Africa and with other countries around the world. For Africa to reach its full economic potential and join global value chains, it needs better transportation networks, updated ports and airports, and more Internet access. At the same time, long-term sustainability and reducing the damage that economic growth does to the environment depend on investments in green energy and sustainable infrastructure. Not only will these investments make jobs available and boost the economy, but they will also help African countries grow and improve their health. By focusing on long-lasting infrastructure, African countries can lead the way in promoting green growth and lowering carbon emissions. They can also meet the urgent need for energy sources that are both reliable and cheap. This all-around method of building infrastructure will help Africa have a bright and stable future.
Along with investing in infrastructure, African countries need to put a high priority on developing their human capital to make sure their people have the skills and information they need to do well in the 21st-century economy. Investing in education, training and building up people’s skills is needed to do this, with a focus on STEM – science, technology, engineering and math – areas and learning how to use technology. African countries can benefit from a demographic dividend and long-term economic growth by giving their people the skills and tools they need to succeed in the global market. In addition, African countries need to be involved in making the global trade agenda so that it fits with their needs and goals.
This can be done by forming partnerships with countries and groups that share similar views, using international organisations like the World Trade Organization, and pushing for changes that encourage fair and equal trade. By speaking out louder as a group on the world stage, African countries can fight back against protectionism and unilateralism and make the international trading system more open and built on rules. This teamwork will not only help African countries, but will also help keep the world economy stable and growing. By taking an active role in the global trade agenda, African countries can also deal with important issues like lowering trade hurdles, supporting long-term growth, and encouraging economic diversity in their own areas.
Ultimately, managing geoeconomic rifts needs a comprehensive and proactive approach that takes into account how economic, political and social factors interact with one another. African countries should take advantage of the chances that come with programmes like the Belt and Road Initiative and the AfCFTA, while also lowering the risks that come with being economically dependent on other countries and having outsiders meddle in their affairs. Amid the prevailing geoeconomic divisions, African countries are actively investigating diverse approaches to strengthen their economies and establish a stronger foothold in the international market.
An example of such a strategy is the creation of special economic zones (SEZs), which function as hubs to facilitate international trade, encourage foreign investment and stimulate industrial expansion. Ghana has the Meridian Industrial Park, which is strategically located on longitude zero and latitude zero to capitalise on the nation’s centre of the world’s geographical position and facilitate commerce throughout Africa. Egypt has the El Robbiki Park, Ethiopia has the Bole Lemi Park, Kenya has the thi River, Nigeria has the Lekki Zone, etc. These parks exemplify Africa’s determination to capitalise on geoeconomic changes to its benefit by providing infrastructure and incentives to entice both domestic and international industries in search of entry into African markets.
Africa can be a leader in sustainable and inclusive development in the 21st century and beyond by taking control of their destiny, spending on infrastructure and people, and influencing the world’s trade plans.
In sum, geoeconomic rifts are changing the way the world works and affect trade, finance and political relationships around the world. During these changes, the conflict between globalisation and economic nationalism makes it harder to decide on a strategy for Africa. It is hard for African countries to balance the appeal of projects like China’s Belt and Road with efforts to bring the region together like AfCFTA. But there is a way to make the economy more stable: invest in infrastructure, human capital and sustainable growth. African countries can become leaders in inclusive, sustainable growth by seizing chances in these gaps. This can help them shape their futures and affect global trade plans.