Last month, a much-publicised summit took place between the EU and AU, ostensibly to chart the two regions’ relationship for the next few years. Postponed for a year, the summit was the sixth in a series that has been ongoing since 2000, the same year that China-Africa summits began as well.
The unusual feature of this summit, however, was the first ever commitment from the EU to spend a specific sum of money in African countries – €150bn ($168bn) – over the next seven years – that’s close to $25bn a year.
To understand the scale of this in terms of public finance, the European Investment Bank (EIB), a key EU Development Finance Institution, has invested a total $65bn in the continent since it started operations there in 1965. Or, to understand the scale of the promise in investment terms, the current stock of European FDI in Africa in 2017 was around $250bn, suggesting a significant uptick.
Exciting times perhaps, especially after headlines on the China-Africa summit, held two months prior, which focused on an “underwhelming” $40bn financial commitment from China over three years (these headlines were wrong – see my analysis of the summit outcomes ). The hope from the European side was to close the summit with a feeling that the region was closer than ever to Africa, including versus China.
The problem was it didn’t. Which means the next steps will be complex, especially on the European side. But first, why didn’t the EU emerge “winning”, despite the big money pledge?
Little to no progress
Prior to the summit, African experts and commentators broadly focused on three asks.
- First, for the EU to really listen to African demands and anchor new commitments in pan-African visions for the future, such as Agenda 2063 – including the expansion of the African Continental Free Trade Area (AfCFTA) and local manufacturing of vaccines.
- Second, for the EU to review and strengthen the commitments already made 22 years ago, many of which have not been fulfilled, such as on trade.
- And third for the EU and AU to start moving the relationship towards learning from each other and recognising what Africa brings to the partnership, rather than a traditional donor-recipient framework, including in areas such as migration or intellectual property.
It is possible that in preparing for the summit, the European Commission spent too much time coalescing member states around the financial pledge, meaning that other issues became overshadowed. Furthermore, from the African side, it is also clear that translating the broad asks above into a clear unified position through African Union bureaucracy posed challenges.
That said, even where there were clear African demands – such as on a waiver to enable transfer of intellectual property for local vaccine manufacturing – the summit made little to no progress. Contrast this to a surprise announcement at the preceding China-Africa summit for a donation of 600m vaccines plus 400m locally manufactured vaccines.
Three steps for Europe
So what next for the EU and African countries? Since many African demands and aspirations remain unanswered, three steps now lie with the European side.
1. Make the financial pledge a reality
First, Europe should ideally work hard to make the financial pledge a reality. This will be a challenge, not only because the pledge is very broad – for instance there is no clarity on what proportion is public or private, or a division between sectors it will focus on – but more because of fundamental internal changes it requires.
As mentioned earlier, the EIB, as well as many member states’ banks and firms, already has a footprint in Africa, but it is either fairly small, or where there are larger financial investments they are skewed towards natural resources and extractive industries.
By contrast, Asian counterparts such as China and Japan have delivered on infrastructure. This is partly because institutions that European money flows into such as the World Bank, Germany’s KfW or France’s AFD are risk averse and inadequately organised to deliver on regional projects (even in the exciting digital arena) or more focused on policy-related lending. Being laissez-faire about the financial pledge, even if ex-post monitored, will not deliver.
2. Rebuild trust
Second, Europe should also start to work hard to seriously rebuild trust, for example through its approach to intellectual property as well as other issues such as migration. The opportunity on vaccines was there, yet kicked across to Geneva’s World Trade Organisation. Expanding pathways to legal migration are as important as managing refugees.
What Europe does in international forums and domestically in the next few months and years on these issues will be watched closely for signs of real shifts.
3. Review approach to trade
And third, Europe will have to review its approach to trade, which did not progress at the summit, although an acknowledgement of the AfCFTA crept its way in. But the fact remains that Europe’s Economic Partnership Agreements as a bilateral mechanism are divisive and not delivering balanced trade for Africa. Exploring a continental-wide preferential trade agreement would show the EU recognises that imbalances need to be addressed.
What can Africa do?
Can Africans also act? Certainly. Africans should immediately put in place an independent African entity to assess progress on the agreed outcomes of the summit – especially the new financial pledge, perhaps via some sort of “EU-in-Africa” monitor. Africans should also continue to come up with and push ideas such as those above that will make good the intentions of the summit.
We can look to Europe’s own policy vis-à-vis other countries to find ideas. For instance, the EU itself seeks to establish geographical indications in markets such as China to raise the value of its own trade – Africans can do the same with respect to both the EU and Chinese markets.
If we don’t articulate our demands, we will never get them. Even if the summit didn’t bring the two regions much closer together, the potential for a transformed and more equal relationship remains.
Hannah Ryder is CEO of Development Reimagined, an African-led international consultancy based in China.