It’s time for the G7 to deliver on Africa

This year’s G7 leaders’ summit, which began yesterday in Schloss Elmau in the Bavarian Alps and is set to conclude on Tuesday 28 July is taking place at a time of great global upheaval and uncertainty.

Every year, the country holding the G7 presidency invites partner countries to attend parts of the summit. This year, Germany invited Senegal, which holds the rotating chair of the African Union (AU), Argentina, India, Indonesia and South Africa.

The war in Ukraine erupted just as the global economy was beginning to recover from the devastation of the Covid-19 pandemic. From an African perspective, the G7 Leaders’ Summit must focus on the immediate and urgent need to end the war in Ukraine, but the G7 must also address the unfolding multiple crises from Cape Town to Cairo.

While the G7 heads of state represent only 10% of the global population but almost 40% of global GDP, their decisions can have a lasting impact on the fight against global inequality and hunger, investment in energy transition and climate action, advancing gender equality and ending gender-based violence.

With South Africa and Senegal as AU chair attending the G7, it is important to reflect on the history and purpose of the G7, especially considering the economic challenges faced by the global economy. Any African perspective of the G7 Summit must consider the colonial and neocolonial history between the G7 member states and Africa, especially that of the summit host Germany and Africa.

The foundational purpose of the G7 forum — the US, UK, Canada, France, Germany, Italy, and Japan — was an intervention in global financial and economic governance. The forum first met in 1975 to discuss and take pertinent resolutions on the worldwide economy and the global financial architecture, such as responses to the oil crisis in the early 1970s and the exchange rate changes resulting from the US departure from the gold standard in 1971.

Similar to today, these decisions were of great significance and had a lasting impact on the other 188 countries in the global economy, most of which were, at the time, newly independent, some affected by armed conflict, and had little to no industrial capacity, poor economically but rich in raw materials.

There has never been any doubt that these countries, many of which are in Africa, want to develop and move from net receivers of so-called aid to self-reliant net providers of innovations and solutions to the challenges and problems confronting them and the world. Colonialism, underdevelopment, inequalities, poverty have been and continue to be a major global crisis that has dragged on for ages, compounded in Africa by exclusion from global value chains and, sustained illicit financial outflows, and worsening threats from pandemics and climate change, among other challenges.

Africa has warned that it has a significant infrastructure gap that must be closed to facilitate the AU’s effort at an African renaissance with its 15 Flagship projects. The G7 has a present and historical duty to assist by drawing on their financing commitments for Africa. A reminder that Africa contributed just 3% of global emissions but is already dealing with the unaffordable impacts of a changing climate on infrastructure, communities and livelihoods, driving further inequality.

Some can argue that the G7s first three fossil-fuel-powered industrial revolutions coupled with colonialism have enabled them to grow exponentially in technological, social, military and general economic prowess but also at the expense of the environment and the climate. Post-colonial Africa has effectively been a net provider of the materials required for this advancement with little sustainable development of any of its economies. The net result is structural global inequality and poverty and a climate crisis that hugely impacts global economic stability.

The question is whether the G7, under Germany’s leadership, will turn years of talk into meaningful, just and sustainable action.

The fourth industrial revolution, defined by technological advancements that characterise human endeavours of the current and future, is here. Some may even argue for a fifth industrial revolution with the pace of technological evolutions. But this revolution comes at a time when climate impacts demand a different path for economic development.

As a result, climate change is no longer a buzzword; COP26 was about what the world must do to avert, reverse, and mitigate the climate crisis and how it will fund such efforts. With Africa broadly lagging far behind industrially and with a significant infrastructure gap, unending illicit financial outflows, and minimal access to advanced technologies, some still expect a just transition to be accepted by all and move smoothly with successful outcomes.

Very little has been forthcoming by way of genuine development partnerships on the part of the G7. By this, I am referring to a departure from aid politics and relations to something more innovative and revolutionary as the fourth industrial revolution itself. I am referring to investment and partnerships that would trigger hastened sustainable industrial growth and development in Africa that the AU in its Agenda 2063 is pushing for, as well as industrialisation more broadly to realise the UN’s Agenda 2030 to avoid, reverse, or mitigate the poly pandemic.

Germany has a role to play if it wants to. Many argue that Foreign Direct Investment in Africa is key to sustainable recovery and growth. Indeed, fresh funds imply the erection of factories, stimulation of sustainable industrial development, research and development, employment creation and sustainable livelihoods and value addition to commodities in the case of African minerals and divestment from fossil fuels and investment in renewable energy.

German investment in Africa stood at 1% of its total external investment in 2018. Last year, the G7, hosted by the UK, pledged to invest $80-billion in Africa.

There is potential for mutual benefit for Germany and Africa in German foreign direct investment , as with G7 FDIs in Africa. This case has been made by African, broader margins and developed economies leaders many times over. The recent tour of Africa by German Chancellor Olaf Scholz, six months into his term of office, attests to the importance both parties attach to this relationship. One continuing from former Chancellor Angela Merkel in 2018, just before the pandemic, is evidence of a positive trend over the last four years.

But the plight of Africa for covid vaccines, vaccine nationalism, and slow and ultimately muted resolutions on the TRIPS waiver proposals have made things difficult for Africans. The slow and minimal assistance in developing local pharmaceutical manufacturing capacity on the continent has not added as much enthusiasm and hope as a genuine development partnership could have.

According to Germany, they want to use their presidency of the G7 to foster a “sustainable planet, healthy lives, investment in a better future and a world that is stronger together.”

But to date, the G7, as a collective, has failed to take the action needed. For example, the G7 failed to assist meaningfully with vaccine access and other measures to mitigate the economic impact of the pandemic on Africa and its effects on its people.

G7 leaders can listen to the science and should affirm their commitment to an inclusive finance, preparation and prevention approach to global health challenges. To avoid repeating the current unequal and unjust response that keeps life-saving medicines, technologies and recipes to produce them out of reach to African countries.

In addition, the G7 and the G20 committed to reallocating $100bn of Special Drawing Rights out of $650bn to help International Monetary Fund member countries facing economic crises.

However, to date, African countries received roughly $33bn. For comparison, the US received $113bn and the $100bn, which African countries desperately need, has yet to be reallocated.

The G7 has promised much to Africa through endless so-called aid offerings. For decades, G7 leaders have pledged to allocate 0.7% of their respective countries (GNI) to international aid to support Africa and other continents in need.

However, Global Citizen reports that by 2021, G7 countries did not even reach half of that and collectively provided 0.32%. More concerning is that even if this “aid” arrives often, it is counteracted by African countries’ trade deficits and illicit financial flows. Africa needs development partners who care about its citizens’ environment, climate and economic and social wellbeing.

Any development support that ignores Africa’s post-colonial challenges relating to trade, food sovereignty and energy sovereignty will merely deepen Africa’s economic challenges. The G7 can be genuine partners to Africa.

To do this, the G7 must invest in a global financial and trade architecture that enables African countries to produce their own food and energy to meet their domestic needs, facilitate technological transfer to enable sustainable essential manufacturing and industrial activity and invest in public education, research, and development. This will support real, sustainable, productive jobs and livelihoods on the continent.

The G7 summit will come and go, as many have done. But this summit presided by a presidency that has professed a genuine interest and intent for development partnership stands a chance to leave something more memorable.

What can it leave behind? For starters, a positive resolution on special drawing rights assistance for Africa, interventions on illicit financial flows and encouragement of investments through effective, sustainable development partnerships.

This article was supported by the Heinrich Böll Stiftung Southern Africa as part of the Foundation’s Encountering the South project