Potential Future Global Shocks – Implications For AfricaCategorised in: BLOG
The future is no longer is as predictable as it used to be. Humanity is now grappling with and getting used to this fact. A lot of what was ordinarily known with certainty in the past is not as reliable as the world expects anymore. Weather and climate change trends pose huge challenges. Even long standing academic concepts such as the law of demand and supply in determining market prices are being put to test, as highlighted by Microsoft magnate Bill Gates in one of his publications in the recent past, albeit with some faint scholarly opposition to his views. He has a lot to speak for him though, including his lucrative interaction with the world of doing business. It can be rewarding to listen to such a man. Let me not digress though.
Our world is spinning pretty fast and calling for a futuristic approach to managing virtually all occupations currently known to man.
We must all keep tabs on how the future is unfolding else the future will cast upon us huge and uncomfortable surprises. One source of knowledge for one seeking to stay in pace with global changes affecting all manner of business is the annual Global Risks Report produced by the World Economic Forum. Their 13th edition highlighting global risks for the year 2018 makes very interesting revelations that we ought to wake up to and respond to. I will focus this piece of writing on some highlights of the above report which the continent of Africa should be seriously concerned about. The report points out future shocks likely to hit the world, some of which I want us to relate to our circumstances on the continent. They are not predictions but rather food for thought and action.
Among the likely occurrences, in future, is the death of trade where bilateral trade wars cascade and multilateral dispute resolution institutions are too weak to respond. According to the above report, political commitment to globalization has weakened in the wake of the global financial crisis and even minor disputes could trigger the start of crumbling. There are deeper protectionist tendencies all over the world and the global trade system is threatened. Relating this to Africa, it helps to refer to The African Continental Free Trade Area and a look at what related achievements have been realized, nearly a year after the relevant agreement was first signed in March 2018, in Kigali.
By February 2019, six countries have not even signed the agreement whereas 39 of those that have signed it have not proceeded to ratify it. Nigeria, the largest economy on the continent, has been reported to be particularly reluctant to participate in this agreement in case it hurts Nigerian entrepreneurship and industry. They are among those that have not signed it. As such protectionism is rife on the continent, the prevailing poverty and trailing position of the continent on the global wealth scale notwithstanding. African countries seem not to realize that their dismal economies have nothing to benefit from continuing to play in isolation. The prevailing lack of urgency to unite for trade portrays the message that as a continent, we do not sufficiently realize that in the face of global trade trends, each of our countries is individually endangered – including the largest of them. Our countries are hesitant to let go of the culture of playing small. There is likely to be a high price to pay if this goes on because our isolated economies are too weak to wield any favorable influence for themselves on the international stage.
Another cited danger is simultaneous failure of breadbaskets, facilitated by disruptors such as extreme weather, political instability or crop diseases. Generally, Africa is entirely unprepared for extreme weather events. For example, according to FAO, only an average 7% of arable land in Africa was under irrigation by 2015, with the scale for Sub-Saharan Africa tipping to an even smaller 4%. The rest of the continent’s farming activity runs on rain fed agriculture. Notably, Africa is also no stranger to civil strife, and in many instances political conflicts have matured into prolonged wars as have been seen in Somalia, South Sudan, the Lake Chad Basin, DRC and Central African Republic, the Horn of Africa and Mali. Africa has largely not portrayed adequate internal preparedness to handle own conflicts and arrest them in time. The continent has exhibited potential of political and military conflict of catastrophic proportions. Such conflicts can completely cripple food production if not checked.
It has also been advised by experts that climate change will continue to generate more pests previously unknown and result in higher crop losses. As a result, there is need for increased safeguard over the continent’s food production chain. In 2003, African countries agreed under the Comprehensive Africa Agriculture Development Programme to allocate at least 10 percent of public budgets to agriculture in order to achieve 6% growth in agriculture. By 2010, seven years later, Sub-Saharan Africa was allocating only 3% of total expenditures on agriculture on average, and the entire continent was doing slightly better at 3.9%. It is highly unlikely that the continent will be able to address challenges of extreme weather in the agriculture sector with this sluggish approach to uplifting the sector.
Notably though, the need for sustained growth in food production is highest for Africa. It is estimated that of the 2.4 billion people projected to add to global population between 2015 and 2050, 1.3 billion will be added in Africa, 0.9 billion in Asia and only 0.2 billion in the rest of the world. Feeding the continent in years to come therefore requires careful planning because the threat of breakdown of the food production cycle due to disruptions is most sensitive for Africa.
As important as the above may be, Africa should also be concerned about the emerging trend of war without rules. This has manifested inform of cyber attacks as per the Global Risk Report for 2018. Cyber attacks have happened between super powers, as an indicator of a shift away from conventional warfare with agreed norms and protocols. Cyber warfare is devoid of any rules so far and scenarios of cyber spying are not so farfetched for Africa either. In the recent past, China has had to deny allegations of having bugged the headquarters of the African Union to copy data to Shanghai. The growing disregard for conventional war should concern Africa because it is an indicator of potential reckless attacks by super powers of weaker nations in future. It is even a possibility that cyber spying may escalate to physical aggression on account of animosity created between involved nations. If this was to happen, African states might find difficulty defending themselves against superior nations.
The above scenario is worsened by the fact that world over, democracy is showing signs of strain against economic, cultural and technological disruptions. Democracy buckles appear imminent and it is likely that the sense of accountability of super powers to the rest of the world will weaken. This creates room for bullying of weaker nations by the super powers. Whereas Africa itself may not suffer a lot from internal faults in democracy due to the fact that democracy in the continent has not developed to high level generally, the breakdown of social and political order that is likely to manifest in the rest of the world as a result of erosion of democratic tendencies may create a global jungle where weaker parties are devoured by giants. This would be highly adverse for Africa in present day circumstances.
Conclusively, whereas there are positive steps taken by continental leadership towards unity, especially as seen from regional economic communities on the continent such as the East African Community, Southern African Development Community, Economic Community of West African States and others, as well as visible efforts to address threats to the continent such as the African Continental Free Trade Agreement, Comprehensive Africa Agriculture Development Programme and similar others, there is similarly an impending need for African states to dissolve walls around their individual identities and apply themselves more to implementing initiatives aimed at addressing challenges anticipated in future on a continental scale.
Raymond Mugisha – CRA, MA. EPM, BSc. Eng
References – FAO, Shenggen Fan and Anuja Saurkar, www.ifpri.org, www.au.int , www.bbc.com