AU’s G20 membership: Signals redesign of global trade, finance, investment architecture

• Opens economic advancement for Africa

The group of the world’s 20 leading economies (G20) has admitted the African Union (AU) as a permanent member, a development termed by many as a “later than never” acknowledgment of Africa’s relevance on the global stage.

Until now, South Africa was the bloc’s only G20 member and the AU had advocated for full membership for seven years in its quest to gain meaningful roles among the global bodies and also accord the 55 member states access to reforms in the global financial system such as the World Bank which had hitherto played a passive role in cushioning Africa’s debt profile.

The AU’s G20 membership which was granted following a concession at the 18th G20 heads of state and government summit in New Delhi, India, is expected to see Africa get investment and political interest from a new generation of global powers beyond the U.S and the continent’s former European colonists.

Becoming a high-profile G20 member just like its counterpart, the European Union is also expected to help the AU, comprising 1.4 billion people, challenge the status quo that has seen the world’s second most populated continent after Asia, pressured to take one side or another among global powers as seen in the aftermath of Russia’s invasion of Africa.

Policy makers and commentators have also  commended the entry of the AU into the “G20 club” as a golden opportunity  for the ‘global south’ including Nigeria, to expand their roles and make their voices heard louder within the G20 in an organisation where G7 countries have long played a dominant role.

Fadhel Kaboub, president of the Global Institute for Sustainable Prosperity, said the development means that the AU now has an opportunity to use its G20 permanent seat to craft a win-win pathway for the entire world with an uncompromising demand to redesign the global trade, finance, and investment architecture.

Rama Yade, a senior director of the Atlantic Council’s Africa Center and senior fellow for the Europe Center, noted that Africa’s inclusion in the G20 membership is an indication that the continent is embracing a culture of geopolitical neutrality which  it has been advocating for in recent years, while also reaching a central position in multilateral discussions.

Yade expressed optimism that as a full member, the African Union with a gross domestic product (GDP) totaling three trillion dollars in GDP will weigh in on G20 commitments and prioritise its primary interests, such as debt restructuring, the reform of the international financial architecture, and climate funding. She added that the necessity to bring a more unified African voice in the international gatherings could accelerate African integration and stronger reforms of the African Union.

The professor of African affairs at Mohammed VI Polytechnic University in Morocco stated further: “The AU is still too dependent on foreign support, which makes up 65 percent of its budget. How can it occupy the G20 seat and make its own choices without budgetary sovereignty? The G20 is only a step, as Africans know that only a seat at the United Nations Security Council will position their continent to wield true political sovereignty. The charge is historic for African Union leaders. But anything less would do a disservice to a continent that, by 2050, will have 2.5 billion citizens emerging on the world stage.”

Hakainde Hichilema, the Zambian president, while welcoming the move, noted that the AU’s arrival in the G-20 is a recognition of its rise as an important player in the global economy.

“Africa’s permanent membership of the G-20, means it has been recognised as a key player on the world economic landscape. African countries must now leverage this position to accelerate development of their economies & their young populations,” he stated.

However, analysts at the  Institute for Security Studies (ISS) headquartered in Pretoria, South Africa, warned that the AU’s permanent membership in the G20 could be a step into choppy waters. This is as the union, consisting 55 African countries, would be forced to  ‘navigate the Ukraine issue, rising tensions between China and the West, and seemingly now also those between China and India’ which the continent does not have a common position about.

The independent research institute which provides authoritative research, expert policy advice and capacity building, advised that the AU would have to devise policies on many issues it probably has not considered, such as North Korea’s nuclear weapons or  issues it is deeply divided on such as whether Israel should be an observer at the AU.

“The AU and the global south are clear in their demands for a greater voice in global economic and political governance – and rightly so. Gaining a seat at the G20 table will give the AU a chance to redress these deficits. But it will also test whether the AU can translate  rhetoric into reality,” ISS analysts said.

Meanwhile, President Bola Tinubu has expressed Nigeria’s readiness to play a prominent role within the G-20, calling for global unity and cooperation in addressing pressing challenges, promoting inclusion, and constructing a more equitable world order.

Addressing world leaders at the just concluded G-20 Leaders Summit, the Nigerian president stressed that most of the world’s pressing issues are “international in character and cannot be addressed without multilateral cooperation.”

He said: “This is why the role and contributions of the G-20 in shaping a new world order that is fair and rules-based can not be over-emphasized. A world that lives as one family, but is divided by staggering income inequalities and uneven access to basic social goods by the vast majority of our people cannot result in a peaceful and secure world where shared prosperity is achieved.

“I hasten to add that such rules and global governance structures of our collective dreams must be collectively designed, collectively owned, and collectively managed. This is consistent with the true spirit of One Family, mutual respect, and sustainable development.”

President Tinubu also noted that the African Union’s inclusion in the G-20 would open opportunities for future membership of the group in a manner that reflects the relative balance of power and inclusiveness 

The Nigerian leader welcomed the decision on the issue of African Union (AU) inclusion in the G-20, saying it “opens opportunities for future membership of the group in a manner that reflects the relative balance of power and inclusiveness of humanity as ‘One Family’.

Reflecting on the theme of the Summit: ‘One Earth. One Family. One Future’, President Tinubu emphasised the interconnectedness of global affairs and the need for collaborative efforts. He also called for strengthening international frameworks for resource mobilisation and governance based on justice, equity, and fairness principles.

“The need for us to work together as one family has become more imperative. We must strive to create a world of inclusiveness in which everyone has access to the necessities of life, and in a manner that widens and strengthens the ownership of our planet regardless of one’s economic, social, and political status,” he said.