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Explained: Why African Union joining the G20 has huge significance

Africa is catching the attention of new global players apart from the US and its former European colonizers. African leaders are no longer happy with the idea that the continent is just seen as a helpless victim of war, extremism, hunger and disasters. Girish Linganna explores.

Explained Why African Union joining the G20 has huge significance
First Published Sep 10, 2023, 2:58 PM IST

The African Union (AU), representing a bloc of more than 50 countries, has achieved formal admission as a permanent member of the Group of 20 (G20), signifying a noteworthy recognition of Africa’s increasing relevance to the rest of the world. The attainment of permanent G20 membership marks the ascent of a continent with a youthful population of 1.3 billion, projected to double by the year 2050 and makeup one-fourth of the world’s population. This comes after the AU’s seven-year-long advocacy for full membership, solidifying its status as a powerful acknowledgement of the continent’s growing importance. 

What does this mean for Africa? 

The African Union, which includes 55 member countries (even including the disputed Western Sahara), has been pitching for important roles in global organizations that were initially set up after World War II. These roles include positions in the United Nations Security Council. 

They also want changes in the way the global financial system works, especially with such institutions as the World Bank. They believe the current system forces African countries to pay more when they borrow money, which increases their debt.

Nairobi Africa Climate Summit

Considering Africa’s abundant natural resources, Kenyan President William Ruto highlighted the continent’s immense wealth during the inaugural Africa Climate Summit this week. The summit, held in Nairobi, concluded with a demand for equitable treatment from financial institutions, the fulfilment of the longstanding pledge by wealthy nations to provide $100 billion annually in climate funding to developing countries and the implementation of a worldwide tax on fossil fuels.

African leaders have demonstrated their readiness to engage in such united efforts. Amid the COVID-19 pandemic, they joined together in strong condemnation of wealthy nations stockpiling vaccines and collaborated to make collective purchases of essential supplies for the continent. With its prominent status as a G20 member, Africa’s requests will, henceforth, be more difficult to overlook or dismiss. 

What Does AU Bring to G20?

As a full member of the G20, the African Union can represent an entire continent that has the largest region where countries can trade without restrictions. Additionally, Africa possesses valuable resources that can be used to combat climate change. Africa experiences significant impacts from climate change, even though it is not the primary contributor to global warming. 

The African continent holds 60% of the planet’s renewable energy resources and over 30 per cent of the crucial minerals needed for eco-friendly and low-carbon technologies. A recent United Nations report on Africa’s economic growth released last month reveals that Congo, alone, possesses nearly half of the world’s cobalt, a vital metal for lithium-ion batteries. 

African leaders are growing weary of witnessing foreign entities extract the continent’s resources and then process them elsewhere for their own profits. They desire increased industrial development within Africa’s borders to boost their economies and reap the benefits locally.

India’s Pursuit of Africa’s Minerals

Energy market analysts note that African nations are being sought after globally due to their critical mineral resources. “Africa is becoming geopolitically crucial and India wants to capitalize on this opportunity,” says an expert. India harbours great ambitions in the field of electric mobility and green energy goals and has plans to build a supply chain for critical minerals. The Indian government has recently amended critical laws for easier entry of private investment into the field of critical mineral mining. 

Rare Earth: Africa versus China

Is it possible for Africa to become the world’s primary supplier of rare earth minerals surpassing China? Currently, rare earth mineral production remains predominantly centred in China, posing a significant concern for Western nations and their partners. China holds a 60% share of the world’s rare earth mineral production and an 85% share of the processing capacity, granting it a substantial advantage in the global market. 

Rare earth elements, comprising 17 essential metals, find application in electronics (such as computers, televisions and smartphones), renewable energy technologies (including wind turbines, solar panels and electric vehicle batteries) and defence sectors (such as jet engines, missile guidance systems and satellite technology -- notably in GPS equipment). 

In this context, the entity that holds sway over the production and processing of these minerals will likewise exert influence over pivotal future technologies. This is why the Western nations express dissatisfaction with China’s dominance over these minerals, viewing it as the most significant geopolitical challenge to their market control. 

Apart from China, Africa, too, harbours these vital minerals, yet a deficiency in a cohesive geopolitical policy approach has hindered its progress in this competition. African leaders appear to lack a strategic perspective regarding the geopolitical importance and advantages that rare earth minerals could bring to the continent. Africa’s substantial potential in rare earth minerals remains largely unexplored due to limited exploration efforts. 

African governments and businesses do not have enough money to search for undiscovered rare minerals. So, foreign governments and companies are doing most of the searching, and that is not good for Africa. A significant factor that raises doubt about whether rare earth minerals will change the clout and well-being of African governments and their people is their unstable governance and political issues. 

Consider the Democratic Republic of the Congo, which produces 70% of the world’s cobalt, a crucial mineral for electronic batteries. Glencore Plc, a Swiss multinational company involved in commodity trading and mining, holds a dominant position in cobalt mining within the Democratic Republic of Congo (DRC). The second-largest player in cobalt mining in the DRC is China Molybdenum Group Limited. 

Children: Inexpensive Labour Force

Both China and various Western entities do not carry out cobalt processing in Congo. Instead, they import raw cobalt and conduct the processing within their own countries. As a result, African communities are left without opportunities for skill development within the rare earth supply chain. 

Children are essentially used as inexpensive labour, a significant concern that contravenes UNICEF regulations. The situation involving Congolese cobalt is noteworthy. One person aptly expressed it this way: “China extracts rare earth minerals from the land, while Congolese children offer inexpensive labour.” 

Nevertheless, in the rare earth metals market, there is an escalating geopolitical rivalry between China and the Western nations vying for control of the mining sector in Africa. The question that emerges is whether Africa can establish a strong position in the rare earth mineral sector in future despite the prevailing dominance of such foreign powers as China and the Western nations in its mining industry.

Robust Mining Policy Needed

From a geopolitical perspective, Africa has the potential to surpass both China and Western nations by devising a fresh strategic approach to this lucrative billion-dollar mining sector. However, at present, crucial African countries, such as the DRC, Namibia, Uganda and Angola, must prioritize the development of a robust mineral policy through inter-state collaboration to gain geopolitical influence in the global mineral market.

African nations currently lack the organization needed to fully capitalize on the potential benefits offered by rare earth minerals present in many of their countries. The solution lies in establishing appropriate policies that can reduce the influx and rapid outflow of ‘hot money’. Many African countries are capable of effectively implementing the correct mineral policies once they are in place. In Uganda, there is a significant amount of misinformation circulating regarding its mineral resources.

Africa is catching the attention of new global players apart from the US and its former European colonizers. China trades a lot with Africa and lends them money. Russia gives Africa most of its weapons. Countries from the Gulf region invest a lot in Africa. Turkey has its biggest army base and embassy in Somalia. Israel and Iran are trying to make more friends in Africa. African leaders are no longer happy with the idea that Africa is just seen as a helpless victim of war, extremism, hunger and disasters and that it has to choose sides among big global powers.

The author is a Defence, Aerospace and Political analyst based in Bengaluru

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