Sustainable Development in Africa and the role of the G-20

Sustainable Development in Africa and the role of the G-20

Authors: Catherine Grant Makokera and Faith Tigere

The Group of Twenty (G-20) remains the premier forum for international cooperation on global economic governance and finance. Representing a large chunk of the global economy (86{fdf3cafe0d26d25ff546352608293cec7d1360ce65c0adf923ba6cf47b1798e1}) and world trade (78{fdf3cafe0d26d25ff546352608293cec7d1360ce65c0adf923ba6cf47b1798e1}), it is not surprising that over time the Group’s mandate has expanded to address other issues. Through the different summits that have been held, issues ranging from development, environment and health have been included on the agenda. In addition to that, the adoption of the UN’s 2030 Agenda and the Sustainable Development Goals (SDGs) has required the G-20 to adjust its approach to development issues. This has resulted in the G-20 adopting a range of plans to contribute to the implementation of the SDGs.

The G-20’s policies and plans have an impact on Africa’s overall economic development. As such, the participation of Africa in the G-20 process is crucial. South Africa is the only permanent member of the G-20 from Africa. It bears a huge responsibility in ensuring effective participation for its interests as well as those of the continent where necessary. Representative agencies who have an observer status, such as the New Partnership for Africa’s Development (NEPAD) and African Union (AU), similarly have a role to play. These African institutions have an opportunity for more effective participation now that there is space provided for greater participation by the NEPAD Agency and the AU Commission (rather than representation only through the rotating political heads of the organisations).

The G-20 has stated that Africa’s development remains a priority for them. An analysis of the G-20 agenda indicates key issues are included that are of relevance to Africa such as infrastructure, food security and human resource development. Initiatives that have been introduced include the G-20 Energy Access Action Plan in Sub-Saharan Africa (Antalya Summit), Support for Industrialisation (Hangzhou Summit) and the G-20 Africa Partnership (Hamburg Summit).

Bearing in mind that Africa’s economic development is also a priority for African states and the AU. The AU has developed its own Agenda 2063 – a strategic framework for Africa’s sustainable socio-economic transformation and integration to be implemented over a five-decade period. The agenda is summarised in six aspirations and still needs to be fleshed out to identify a concrete set of objectives. A comparative analysis of the AU Agenda and the UN 2030 Agenda shows there are significant overlaps between the two agreements. These overlaps include the objectives of poverty alleviation, achieving food security, full access to education, sustainable development, achieving sound health and wellbeing, and achieving gender equality in all spheres of life.

As the UN SDGs and the AU Agenda are aligned, it becomes easier to incorporate developmental issues in the G-20 agenda. The G-20 has indicated a commitment to the UN SDGs and some goals have been explicitly incorporated into the agenda. For example, the goal to alleviate poverty has seen support from initiatives such as the G-20 and Low Income Developing Countries Framework (Antalya Summit), Good Practices on Family Farming and Smallholder Agriculture (Hangzhou Summit) and the G-20 Initiative for Rural Youth Employment (Hamburg Summit).

Through the work of the G-20 Development Working Group (DWG) , a level of continuity in terms of African objectives is ensured. The main objective of the group is ensuring the consistency with the G-20 framework, engaging developing countries, and focusing on tangible outcomes for low-income countries to mention just a few. The original agenda for the DWG was agreed in the Seoul Declaration and included infrastructure, trade, human resource development, food security, financial inclusion, private investment and job creation, growth with resilience, domestic resource mobilisation, and knowledge sharing.

There are many benefits that can be gleaned from the G-20 by developing and least developed countries alike. A number of analysts and researchers have made useful suggestions of how Africa can benefit from the G-20 process. These include the following from the Think-20:

  1. Ensuring that the representative agencies at the G-20 are fully resourced and supported.
  2. A close cooperation by all the different countries to implement the SDGs to ensure that no one is left behind.
  3. Prioritising areas where there is a significant overlap between the G-20 initiatives, DWG and the UN SDGs.
  4. Implementing G-20 commitments that support the SDGs and African development.
  5. Bridging the gap between existing initiatives and to build linkages across different initiatives by the different summits.
  6. Encouraging international finance institutions to embed the SDGs in their work.
  7. Promoting capital flows from surplus countries to profitable opportunities in sustainable infrastructure and climate finance.

These are just some of the recommendations made to fully reap the benefits of the G-20. South Africa as a permanent member could also identify some focus areas that it could prioritise and seek to obtain tangible results. In addition to that, South Africa could continue with a balanced approach to the three dimensions of sustainable development (economic, social and environmental) and specify contributions towards both the environment and the social dimension.

Our most recent paper on the G-20 explores these issues in more detail and makes additional recommendations for the engagement of African policymakers with the G-20.

Photo credit: GovernmentZA on Visualhunt / CC BY-ND

Plugging Africa Into E-Commerce

Plugging Africa Into E-Commerce

In the final quarter of 2016 South Africa participated in two critical global economic governance summits as the lone continental representative: the 11th G20 summit hosted by China and the 8th BRICS summit hosted by India. Both hosts placed e-commerce on the agenda, signalling a desire to engage on the topic. Meanwhile, on the multilateral front the WTO is exploring new trade issues beyond the Doha Development Round, in which e-commerce features firmly. But what does this all mean for Africa?

In the past decade African states saw rapid economic growth tied to the commodities boom from the early 2000s, followed by the commodities bust.

While the boom resulted in some improvements in the average African citizen’s life, most states and their populations still face serious developmental constraints. Africa’s dependence on commodities has put growth prospects at the mercy of international markets, resulting in varied, episodic and skewed economic development.

The majority of African consumers and producers still face considerable barriers to doing business. The distances between consumers, retailers, and upstream suppliers, in conjunction with poorly developed infrastructure, mean that markets are somewhat isolated from their immediate geographic location. This isolation also means that competition is limited which adversely affects price, variety, and ultimately restrains innovative potential. The consequential, overarching issue arising from this is the limited economic participation within and among African states.

Fortunately, the march of progress has delivered a means of conducting business that transcends all these constraining factors – e-commerce.

The opportunity to market, buy and sell goods over the internet primarily offers consumers more convenience: more options are available, occasionally at better prices, and with more information. It also affords suppliers (notably SMMEs) better market reach, as markets can be better targeted and extended beyond immediate location, at more affordable prices since overheads from traditional brick and mortar operations can be avoided and numerous business functions either automated or outsourced.

As e-commerce makes markets and opportunities more accessible its development could benefit the marginalized members of society. Most notably it allows people who lack access to capital to pursue opportunities that weren’t economically feasible via old brick and mortar operations. Women in isolated rural settings subject to traditional gender roles would also benefit as they would be able to engage in long distance sourcing and selling.

However, e-commerce does require that consumers and producers have access to the internet on devices able to run applications or access web pages. It’s also helpful if options are available to affect payment electronically, but this is not a prerequisite for e-commerce, rather a facilitating factor. The recent increase in mobile technology uptake and the widespread use of ‘mobile money’ in Africa inspires some confidence that all the necessary components are present to build a growing e-commerce sector. Sadly, this is not enough.

Studies show that e-commerce sales can suffer from a lack of consumer trust in the absence of comprehensive, enforceable, consumer protection laws. Furthermore, even though transactions occur online suppliers might face order fulfillment issues given poor infrastructure and cross-border trade barriers.

Less than half of all African countries lacking have comprehensive online consumer protection legislation, and African states consistently rank at the bottom of the World Bank Logistics Performance and Doing Business indexes. Of moderate concern is the lack of fixed broadband connections within Africa, which is comparatively cheaper than mobile broadband connections. However, the adoption of mobile broadband connections does seem to be the best solution in the short to medium term as wider coverage can be granted at lower initial investment cost.

Clearly there are domestic issues that should be addressed first, but e-commerce by its nature is not contained within domestic markets. This means that agreements are required to regulate cross-border e-commerce transactions. Developed countries, like the USA and European Union, have already taken the lead in establishing frameworks for the inclusion of e-commerce in trade agreements, most notably the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). While the fate of these agreements in the wake of Donald Trump’s election victory in the US lies in the balance, both include provisions on e-commerce and both are considered very progressive in their content.

The TPP, for example, includes provisions on technical issues related to the cross-border transfer of information by electronic means, location of computing facilities, non-discriminatory treatment of digital products and the hotly contested protection of personal information.

These issues are by no means irrelevant in the African context and require due consideration as the conclusion and implementation of these provisions could impact Africa’s capacity to attract ICT investment and conduct cross-border e-commerce transactions. Considering that the majority of ICT and e-commerce enterprises are based in developed countries, the adoption of these provisions would naturally become the benchmark for the private sector. The result would be that African states and enterprises have to comply with such regulations which in themselves could prove to be new entry barriers.

Countries who are not members of such progressive preferential trade agreements like the TPP and TTIP are likely to become subject to these agreements at a later stage, either via the private or public sector adopting regulations. It is in the best interest of African states to effectively engage in multilateral negotiations on matters affecting the global regulation of e-commerce. Considering the stagnation in the WTO it’s worrying that South Africa, as the sole African representative in global economic governance fora like the G20, still seems reluctant to engage on the topic.

African countries should ensure that they create an enabling regulatory framework for e-commerce in their domestic markets, to harness the potential for economic growth. This should be done in a way that prevents further marginalization of African people, especially vulnerable groups, or exclusion from opportunities arising from 21st Century ways of doing business.

We have recently co-authored a discussion paper on the topic of e-commerce in Africa, available at GEG Africa, exploring the potential role of e-commerce in african development as well as its requirements.Pull QuotePill Quote

 Photo credit: Rakeman via Visual hunt / CC BY-NC-SA