The 54th World Economic Forum took place in Davos, Switzerland from the 15th to the 19th of January, 2024. Themed, Rebuilding Trust, the annual event featured over 200 sessions that shape the trajectory of the world’s economic landscape. Amidst the diverse narratives throughout the 5-day event, one that resonated particularly strongly was the future of Africa. Fueled by discussions on scaling the African economy, the discourse oscillated between the optimism of Africa’s rise and the contemplation of whether the’ sleeping giant’ is yet to awaken. In this newsletter, we delve into the key takeaways from Davos 2024, and the promise, potential, and mutually beneficial partnerships that emerged from Africa’s representation at this global economic congregation.
Private Sector Action Plan
African leaders proposed the Private Sector Action Plan – a collaboration between the World Economic Forum and the African Continental Free Trade Area (AfCFTA). This initiative, comprising 40 global companies, signifies a paradigm shift in how Africa seeks to engage with the global economy.
The Private Sector Action Plan aims to cultivate an environment where African businesses can thrive globally by leveraging the unique strengths of both local and international entities. It also aspires to position Africa at the forefront of global supply chains. This forward-looking initiative points to a collective recognition that sustainable economic growth in Africa necessitates collaboration and synergy between the public and private sectors.
Timbuktoo Startup Fund
While the strategic alliances forged through the Private Sector Action Plan, Davos 2024 were great, the Timbuktoo Startup Fund – an initiative driven by Presidents Paul Kagame of Rwanda, Nana Akufo-Addo of Ghana, and the United Nations Development Fund was an equally monumental announcement. With an initial target of $1 billion, the Timbuktoo initiative signals a bold commitment to harnessing Africa’s youthful population through entrepreneurship.
The fund is poised to provide crucial financial support to innovative startups across the continent, fostering economic growth, job creation, and technological advancements. By encouraging entrepreneurship, the Timbuktoo initiative seeks to contribute to the development and empowerment of Africa’s youth in the rapidly evolving global economic landscape.
AfCFTA’s Unleashed Potential
At the core of Africa’s economic resurgence lies the African Continental Free Trade Area (AfCFTA). As the largest free trade area by population and economic size, AfCFTA is projected to host 1.7 billion people and oversee $6.7 trillion in consumer and business spending by 2030.
Wamkele Mene, Secretary-General of AfCFTA, emphasized the progress made since the operationalization of the agreement. With 47 countries having ratified the AfCFTA, the continent has witnessed the initiation of trading in earnest, with goods moving seamlessly across borders.
The AfCFTA is not merely a trade agreement, it is a testament to Africa’s commitment to unity and collaboration. It signifies a collective effort to remove barriers and create an environment where the continent can fully leverage its abundant resources.
Davos 2024 saw a robust affirmation of Africa’s intrinsic agricultural spirit. Vice-President Kashim Shettima of Nigeria, speaking from the vantage point of one of Africa’s largest economies, underscored the importance of agriculture in driving growth. Shettima painted a vivid picture of the transformation needed in the agricultural sector, emphasizing the shift from antiquated practices to modern, efficient methodologies.
Agriculture, according to Shettima, holds the key to unlocking Africa’s potential as a driver of growth and change on the global stage. He spoke passionately about the historical evolution of agriculture in Africa, from using rather crude methods in the past to now embracing modern agricultural practices. Shettima stressed the need for farmers to leverage Africa’s youthful population to increase yields and position the continent as a powerhouse in the agricultural sector.
Investment and Access to Capital
Mary Vilakazi, CEO-designate of FirstRand Ltd, Africa’s largest lender by market value, brought a pragmatic perspective to Davos 2024.Recognizing the imperative of capital access for African countries, Vilakazi acknowledged the existence of structural and regulatory barriers that hinder trade.
During her address, Vilakazi highlighted the frictional cost of trade in Africa, amounting to approximately $5 billion annually. She emphasized that addressing these barriers would not only facilitate smoother trade but redirect significant capital back into African economies. The solution, according to Vilakazi, lies in stronger public-private collaboration and a commitment to creating environments that support frictionless trade.
Wielding Power in a Multipolar World
In the broader context of global power dynamics, particularly the schism between the global North and South, leaders at Davos 2024 acknowledged the need for a recalibration. Rwandan President Paul Kagame, in a session addressing global inequality, emphasized the importance of capacity building to ensure that Africa remains up-to-speed with global developments, especially in times of crisis.
Ngozi Okonjo-Iweala, Director General of the World Trade Organization (WTO), added her perspective, noting that the world is now characterized by multiple power points in a multipolar landscape. She advocated for a bigger role for multilateral organizations, such as the WTO, in shaping equitable outcomes for people and the planet. While acknowledging the shifting balance of trading power towards the South, Okonjo-Iweala highlighted the need for global collaboration to navigate the complexities of our interconnected world.
Enoch Godongwana, South Africa’s Minister of Finance, offered a contrarian view by making a case for BRICS, the intergovernmental organization comprising Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the United Arab Emirates, Iran, and Ethiopia. He emphasized the critical need for reform in international, multilateral institutions to mobilize savings in the South and ensure a better development agenda.
The discussions at Davos underscored a nuanced understanding of power dynamics and the need for collaboration on a global scale. While recognizing the challenges, leaders from Africa articulated a vision for the continent to play a pivotal role in shaping the future of a multipolar world.
Davos 2024 affirmed that Africa’s voice is not merely rising; it is resonating globally, ready to shape a future characterized by economic vitality and collaborative progress. The journey is ongoing, but the echoes of Davos 2024 suggest that Africa’s economic renaissance is not a distant dream but a palpable reality, awaiting its full realization on the global canvas.