Is the African Union Evolving in the Right Direction?

Last month the African Union (AU) concluded its 37th summit, its first since being admitted into the G20, a group of countries that can be thought of as the economic and financial equivalent of the UN Security Council. But what exactly did this summit signify for African countries when it came to economic issues? And what should G20—now G21—member states expect of the AU this year?

To understand this, it is important to take a step back to the beginning of the AU.

On September 9, 1999, the African Union (AU) was first announced in Sirte, Libya, an evolution of the Organization of African Unity (OAU) created in 1963 with roots in anti-colonial struggles the pursuit of self-determination, and a forward-looking agenda for promoting economic and development coordination and cooperation among member states.

The economic agenda of the AU (then OAU) was, in early days, well developed and strong. For instance, in 1984, 1985, and 1986, the AU (then OAU) convened meetings of African leaders to determine their views and best practice on debt negotiations and management. However, the economic agenda slowly fell off, especially after a global debt cancellation program (known as the Highly Indebted Poor Countries Initiative - HIPC) was initiated in 1996 by the World Bank and International Monetary Fund (IMF). African economic policy was no longer primarily determined from within the continent. Meanwhile, other issues such as security began to dominate the agenda of the AU.

Fast forward 24 years, the AU transforming the G20 into the G21 certainly highlighted the potential of a stronger African voice in the global economic landscape. It was no coincidence that 2023 was the same year the AU had put economic issues back on the top of its agenda, with a focus on implementing its landmark trade initiative—the African Continental Free Trade Area (AfCFTA), operational since 2021.

As of 2023, Africa's GDP stands at an estimated $3.1 trillion, making it the eighth largest economy globally, with a population of 1.3 billion—similar to China and India. The continent is expected to experience substantial economic growth, with the IMF forecasting a GDP growth rate of 3.8 percent for 2024, outpacing the rest of the world. Undoubtedly, a significant share of global growth will be driven by Africa in the coming years, emphasizing the crucial role of the continent in the prosperity of other G21 partners. Not only this, with excellent demographics and renewable energy potential, the African continent is ideally placed to be the world’s next manufacturing hub after China. Africa's economic potential cannot be ignored; it is fundamental to the prosperity of all.

What was clear from this year’s AU summit was that African leaders realize this—and four particular outcomes demonstrated that.

1. AU leaders agreed that instead of trade, for the forthcoming year, education will be their primary theme. The focus makes sense given Africa’s large youth population and the need to upgrade and leapfrog systems in this new digital age. There is significant potential for African countries to learn from each other on what works, while ensuring, for example, that African curriculums are tailored to African needs. It is estimated that Africans speak over 1,000 and possibly 2,000 languages, meaning most Africans are bilingual, many trilingual. This is a huge asset, but it is also a challenge for education systems borrowed from monolingual former colonizers. This year, African leaders should try to lean into these challenges.
2. African leaders agreed how they will be represented at the G20, now G21. This was not a simple question—the European Union similarly had to review its representation when it became part of the G20. As the 2024 rotating AU presidency will be led by Mauritania (taking over from Comoros), Mauritanian leadership will clearly have a prominent role alongside representatives of the African Union Commission and African knowledge partners that will provide crucial policy-related secretariat support. It was also agreed that financial resources for the AU’s participation in the G21 would come from African member states and African financial organisations only, so as to preserve independence. Given that G20 Finance Ministers will have their first meeting of 2024 in late February, these decisions were very timely. A key question for the AU to determine now is what main issues the AU will want to encourage the G21 to consider, as well as the AU’s redlines on G20 issues.
3. At the 2024 AU summit, African leaders coordinated around new reforms of the international financial system. Development Reimagined published a policy brief ahead of the summit on key economic and financial issues for the AU, many of which were these mentioned by leaders. For instance, the brief’s proposal for G21 members to target various forms of finance toward African financial institutions such as the African Development Bank and Afreximbank was echoed by President Nana Akufo-Addo of Ghana, AU champion for financial institutions, highlighting trust in homegrown entities. He also made a proposal that all African countries should hold at least 30 percent of their foreign reserves in domestic financial institutions, to enhance Africa's fiscal autonomy.
4. E. Hakainde Hichilema, president of the Republic of Zambia, emphasized the urgency for reforms in the global financial architecture. He restated the commitment by African leaders to grow their economies, create jobs for the youthful population, and provide more business opportunities for African businesses, noting the unfairness in risk profiles attributed to African economies, including by credit rating agencies. This echoed the brief’s proposal for G21 members to reform the IMF/World Bank’s debt sustainability analysis.
5. Last but not least, on the sidelines of the AU summit, a new alliance known as the “Africa Club” was launched, which brought together five African-owned, African-controlled Multilateral Financial Institutions established by treaty. These institutions can be expected to use the new alliance to develop clear and unified positions on key issues and discuss innovative ways they can contribute to African growth, economic development, and integration.

The recent AU summit marked a crucial milestone, with Africa's economic agenda gaining renewed focus. President William Ruto, in his new role as the AU champion for institutional reforms, even presented a proposal for a yearly African Economic Summit to be hosted on the continent, just as was done back in 1984. Ruto emphasized the importance of holding such discussions on African soil, stating, "It is fair, it is better if we can discuss it here at home, fashioned in the way we think best it should be." He envisaged that stakeholders from around the globe, including governments, corporations, and philanthropists, could even be invited to contribute their perspectives and insights.

The fact is African governments have always been determined to shape the continent’s economic future and engage with the global community on their own terms. With the AU increasingly focusing on development rather than just security, and with a new proposed annual African Economic Summit, it looks like this might be happening, once again. But will it stick? Only time will tell. Deft management of foreign relations will be needed to ensure history does not repeat itself.

Hannah Ryder is senior associate for the Africa Program at the Center for Strategic and International Studies in Washington, D.C., and CEO of Development Reimagined. Etsehiwot Kebret is a development finance adviser at Development Reimagined focusing on special drawing rights, multilateral bank reform, the sustainable development goals, and African debt. Judith Mwai is a Research and Policy Analyst at Development Reimagined, where she leads the firm’s work on Africa-China diplomacy, UN engagement, and support for international development in partnership with China.