By Afshin Molavi
21 June 2015
When the 22 countries of the Arab League met in their Cairo headquarters last month to discuss common security concerns, there were 10 African representatives in attendance. In discussions of the Arab world, one unmistakable factor is often missed: the Arab world is heavily African. Algeria, Comoros, Djibouti, Egypt, Libya, Mauritania, Morocco, Somalia, Sudan and Tunisia are all Arab and African states.
Last week there was another gathering in Egypt, of 26 African leaders who signed the historic Tripartite Free Trade Agreement. The accord links nearly half of African countries with a collective GDP of $1.3 trillion and a population of some 565 million in a customs union that will ease trade barriers and potentially set the stage for a larger continent-wide free trade agreement over the next few years.
After decades as a global laggard, Africa has joined the most important geo-economic movement since the industrial revolution: the rise of emerging markets, the growth of a new global middle class, and rapid urbanization. These three powerful economic drivers will continue to dramatically transform our world over the next several decades, lifting millions from poverty, reshaping global trade patterns and altering geopolitical alliances.
Consider that in the year 2000, the entire continent had a collective GDP of $600 billion, roughly equivalent to the economic output of Spain that same year. Today, Africa’s collective GDP stands at some $2.2 trillion.
Africa has seven of the 10 fastest-growing economies in the world. Its population now exceeds 1 billion and rising. By 2030, one in five people in the world will live in Africa, which will be the youngest continent on earth. By 2040, 25 percent of the global workforce will be there. Africa’s importance to the global economy will only rise.
Of course, tremendous challenges remain. Thirty of Africa’s 54 countries are among the least developed, according to the United Nations, and far too many rely on food imports and therefore price volatility.
Weak infrastructure - from chronic electricity shortages to dilapidated roads and ports - remains a major impediment to sustained growth. Some argue that this will handicap trade agreements from the get-go. Furthermore, the continent is diverse, and the catch-all “Africa” fails to distinguish between countries with radically different histories and levels of development.
Egypt’s prominent role in the negotiations that led to the free trade agreement demonstrates its role as an African bridge state - one that can leverage its commercial and diplomatic networks, particularly across the Arab world, toward greater integration between the Middle East and Africa.
The African growth story has largely been missed by most non-African Middle East states, and by a Middle East media focused more on the multiple crises in the region, U.S. foreign policy and the Iran nuclear talks.
The United Arab Emirates (UAE) is the exception. It has emerged as a key trade and investment partner for Africa. Investments by UAE state-owned entities in sea port infrastructure (DP World) and telecommunications (Etisalat) have supported the continent’s connectivity both internally and with the world. UAE-based power companies have invested in electricity supply in a small but growing number of African markets.
UAE-based airlines - Emirates, Etihad and Fly Dubai - are growing their African networks. Emirates in particular have emerged as the most important foreign carrier in several of the continent’s largest markets. Dubai International Airport has become a virtual “Africa hub,” and the city has emerged as a key logistics and financial gateway linking Asia to Africa.
Other Middle East states should follow suit, joining China, India, Turkey and the UAE in viewing Africa as a tremendous opportunity for trade growth and investment, rather than a continent to be “saved.”
Many African states stand at a crossroads, driven by a rising and increasingly urbanized middle class, steady growth and greater global integration. “Across Africa, we’re seeing more and more countries ‘open for business,’ with a more amenable policy and regulatory environment,” said Peter Lewis, director of the Africa Studies program at the Johns Hopkins University School of Advanced International Studies.
“We’re also seeing much lower debt loads, better budget balances, realistic exchange rates, low inflation rates, and in most countries in Africa the macroeconomic picture has been much more favourable and pragmatic.... Urban economies are not only bringing up a lot of growth in the informal sector, but they’re generating formal sector gains as well.”
However, several African states face the tremendous challenge of terrorism. The rise of Boko Haram represents a setback to Nigeria and parts of central and West Africa, but also a setback to humanity: the group’s depravity rivals that of the Islamic State of Iraq and Syria (ISIS), to which it has pledged allegiance.
Middle East and African governments and civil societies thus have a common enemy, so security and intelligence cooperation should become an integral part of their engagement. The Arab world and the broader Middle East should take a more active role in the momentous developments reshaping Africa, as well as the dangerous movements trying to turn back the clock.
Afshin Molavi is a senior fellow and director of the Global Emerging and Growth Markets Initiative at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies (SAIS) and a senior research fellow at the New America Foundation, a Washington DC-based think tank.