Apart from the continued warfare in Ukraine, two of the stand-out geopolitical events in 2023 have been the broadening of the membership of BRICS and the G20 countries.
According to several authoritative political commentators, the recent inclusion of the African Union (AU) in the group of 20 influential countries and the European Union region, will have a far greater effect on the shifting sands of the world economic order than the inclusion of six more countries in the BRICS-grouping.
Read more in Daily Maverick: The African Union’s long walk to G20 membership has paid off, now the hard work starts
The latter is widely regarded as an anti-America club and is not expected to pose a meaningful threat to the principles of democracy and free enterprise that are embedded in North America, Australia, most European countries and several emerging markets (commonly referred to as “The West”).
The Group of 20, however, is a vastly more representative forum for deliberations on crucially important issues facing the world, especially nuclear disarmament, reducing global warming and encouraging free trade. With the African Union now included as a permanent member of the G20, on par with the European Union, the total country membership has more than doubled to 101 and the name has changed to G21.
Until now, South Africa has been the continent’s only representative at the G20. The latest development raises the question over which country was most involved in lobbying for AU membership. The US would be a good guess, as it has lagged behind China in strengthening economic and diplomatic ties with Africa.
The most obvious immediate interest in forging closer ties with African countries is related to the continent’s abundance of metals and minerals, especially those that are required for the inevitable switch to green energy. Lithium-ion batteries that are used for nearly all electric vehicles use five critical minerals, namely lithium, nickel, cobalt, manganese, and graphite. Africa enjoys a dominant global position with regard to reserves of these and also other minerals required for the development of renewable energy.
The United States has historically not maintained strong commercial diplomatic ties with Africa, with Kenya and South Africa being the exceptions. The US could nevertheless enhance its credibility as a sincere partner in future socio-economic and political liaisons with Africa by a reminder of its exceptionally strong support to end constitutional discrimination in South Africa during the 1970s and 1980s.
The Comprehensive Anti-Apartheid Act (enacted in the US in 1986) banned new investment in South Africa and ultimately played a key role in the disinvestment of several hundred companies. Since 1994, most of these have returned and today there are an estimated 600 US companies operating in South Africa.
In the race to secure critical minerals for energy transition, the United States will have to consider closer cooperation with African countries producing such minerals. It also needs to counter the dominance of China. According to research by the Washington-based Centre for Strategic & International Studies (CSIS), the Democratic Republic of the Congo (DRC), exports all of its cobalt to China, which then adds considerable value in manufacturing downstream products, including lithium-ion batteries.
China is by far the largest exporter of such batteries, but the rapid acceleration of export restrictions on natural resources (such as cobalt) is concerning. In recent years, China has imposed export restrictions on 35 natural resource products, compared with 17 from Russia and zero from the United States, Australia, and European countries.
The chances of securing global security of critical minerals will be considerably enhanced if the US and the EU collaborate in expanding the Minerals Security Partnership (MSP) to include relevant African countries.
In order for such an exercise to be mutually beneficial, it would need to focus on creating substantial socioeconomic benefits for participating countries, especially in the further beneficiation of minerals and export incentives, whereby infrastructure investment, job creation and fiscal revenues could be enhanced. In a continent struggling to contain public debt and provide basic services to a rapidly expanding population, closer cooperation with advanced nations would be a boon.
Africa’s new-found membership of the G21 guarantees new investment opportunities in the field of energy transition, which is destined to act as an economic growth driver well into the future. DM