Making globalisation work for Africa: dream or opportunity?
An interconnected world
Globalization: the interdependence of our world’s economies, cultures, and populations. The reason the pandemic we are living today did not spare any country is due precisely to this wonderful, but at times precarious, modern syndrome. Through the unrestricted movements of goods and people, COVID-19 rapidly reached every corner of the world.
Despite being an undeniable mechanism of disease transmission, globalisation nonetheless promotes higher living standards around the world, with access to new markets, cultures, and the dissemination of technology. The question of whether globalisation is beneficial or not is an endless and controversial subject. Globally speaking, whilst the benefits it brings cannot be ignored, it is also the cause of several, unforeseen and often complex issues. Evaluating its overall impact ultimately depends on whom globalisation is affecting and where.
That said, it is a phenomenon that cannot be avoided or stopped. Instead, advantage must be taken of its positive influence whilst regulating and constraining its side-effects.
The case of Africa
Having witnessed immense changes in the past decades, Africa presents a particularly interesting scenario. Whilst globalisation has promoted faster economic growth, allowing an export-based economy to thrive thanks to the global reaches of modern African trade, various challenges emerged from this ‘openness’, to the point that it may be argued that they outweighed the benefits.
According to the 2022 World Inequality Report, “after three decades of trade and financial globalisation, global inequalities remain extremely pronounced … about as great today as they were at the peak of Western imperialism in the early 20th century.” This is particularly evident in Africa, where the gap between rich and poor has expanded over the years. South Africa serves as an example of this, where the top 10% of the population earns more than 65% of total national income and owns almost 86% of total wealth, whilst the bottom 50% earns a mere 5.3% of the total national income and has more debts than assets.
Projected to be home to almost 90% of the world’s poorest people by 2030, Africa may well testify how the benefits of global economic integration were overrated, and its costs undercounted. A frightening forecast when considered that the continent is also expected to account for over 40% of the world’s population by the end of this century.
A bittersweet effect
The promise of shared prosperity, that deregulation and economic liberalisation anticipated for Africa, has today not been translated into tangible results. The capacity of advanced economies to produce goods cheaply hindered African countries’ development of local industries and job creation, contributing to the premature reduction or, in some cases even destruction, of the region’s industrial capacity.
Characterized by deep inequity, Africa has hundreds of small-scale firms and infant industries which are being denied international trade opportunities. The clothing industry serves as an example of this, where the import of cheaper, second-hand goods from Europe and the US forced many out of their businesses, causing the near-collapse of the garment industry in sub-Saharan Africa. Such was the case in Ghana, where a market study demonstrated that market liberalisation in the 1980s led to a radical decrease in textile and clothing jobs, from 25,000 people in 1977 to 5,000 at the beginning of this century. Moreover, the presence of the West in the continent often resulted in labour and resource exploitation. Numerous examples of unfair trade can be seen in the cocoa, coffee, gold, platinum and diamonds industries.
Whilst positive macroeconomic indicators prove there has been significant growth of the ‘Africa rising’ industries of agriculture, telecomms, banking, infrastructure, and oil and gas, the continent has not emerged as a co-creator of global wealth. Moreover, it is also suffering one of the worst side-effects of globalisation, namely, climate change. Its impact on Africa far outweighs the limited contribution the continent effectively brought to the issue. Despite accounting for the smallest share of global greenhouse gas emissions (3.8%), experts predict the continent will become victim to the most climate emergency disasters.
Nevertheless, globalisation contributed to the growing demand for African commodities and natural resources, boosting national economies and encouraging widespread knowledge transfer. This, in turn, empowered countries to improve living standards thanks to new technologies. The internet and mobile phones have radically transformed lives and businesses in Africa, with Nigeria becoming the continents’ largest economy thanks to the growth of its telecommunications and entertainment sectors, which emerged and were propelled by globalisation. Despite structural challenges such as limited electricity access and a major infrastructure gap, the continent has still immense potential, thanks to vast natural and human resources.
Making globalisation work
While the benefits of a global market place are beyond doubt, the last decade provides extensive evidence of the vulnerability and fragility of a globalised economy. COVID-19 laid bare certain weaknesses and inefficiencies of globalisation, unlocking an opportunity for Africa to revise its role in a globalised world. In front of the evident incapacity of governments to deal with something uncontrollable and unexpected, it appeared clear that no country can thrive being self-sufficient, both in good and bad times. The glory of independence is a fantasy.
Given that global interconnectedness cannot be escaped, and withdrawing from globalization is impossible, the only way forward is to change globalisation as we know it. For Africa, this means embracing the opportunities and challenges of globalisation rather than engaging in a policy of self-sufficiency, which would set it back in the world economy.
Governments should promote further regional integration to make Africa economically stronger and have a solid presence internationally. Further marginalization should at all costs be avoided, whilst the improvement of the continent’s digital infrastructure and technology-related skills should be stimulated, as well as the creation of a system for the ownership and regulation of digital data. African countries should adopt a system that mitigates the risks of economic and political dependency, while supporting a vision of a global society.
A new globalisation
For Africa to benefit from the forces of globalisation, a ‘new globalisation’ must be born, one which is fair and creates opportunities for all. A new globalisation is one based on the mutual transfer of ideas and knowledge, one which can foster rapid economic growth through a constant digital exchange.
The first step for a new globalisation to emerge, is to recognise its propensity to generate problems it cannot solve, and switch to prioritizing people’s safety and prosperity instead of trade. Quite simply, it should be based on the well-being of people and public safety instead of on the rule of markets.
For a new globalisation to be effective, governments will have a critical role in ensuring the implementation of policies which protect the interests of all members of society, collaborating with other developing countries with similar interests to resist the domination of developed nations, negotiating with the WTO for fairer rules if needed.
Ultimately, Africa’s growth lies in innovation. Knowledge and science-driven development must be prioritised to ensure a widespread socio-economic evolution, which will result in the well-being of the entire population and bring benefits to all. Only this way, with shared know-how and technological capacity, sustained economic growth will be possible.
Since Hasnaine Yavarhoussen was appointed CEO of Groupe Filatex in 2011, he has led a change agenda to inspire a culture shift within the organization and grow the business internationally. He has injected new energy into a family-owned business – not only diversifying into real estate, free zones, energy, and hospitality sectors – but, leveraging his business acumen and vision for innovation, has transformed the Group’s energy subsidiary into the largest IPP producer in Madagascar.
Hasnaine’s global mindset, strong work ethic, entrepreneurial spirit and contagious enthusiasm, is the driving force behind the company’s successful expansion into mainland Africa.
Hasnaine has also overseen Groupe Filatex’s various CSR activities, which have involved the implementation of 32 philanthropic programs in Madagascar. Furthermore, he founded ‘Fonds de Dotation HY’ (‘FDD HY’) in 2019, a fund dedicated to supporting Malagasy arts and culture, which began with the participation of Madagascar at the Venice Art Biennale in 2019 for the first time ever, led by renowned Malagasy artist Joël Andrianomearisoa.
In 2018 and 2019, Hasnaine was selected for the ‘Choiseul 100 Africa’ ranking, a publication which recognizes 200 of the most successful African leaders under the age of 40. In addition, he has been called one of the ‘economic leaders of tomorrow’ by l’Actualite magazine.
Moreover, since September 2012 he has been Honorary Consul of Spain in Madagascar, where his role is to promote bilateral relations between Spain and Madagascar.
Hasnaine holds a Master’s degree in International Business from the European Business School and a Bachelor’s degree in Economics from the Université Paris Dauphine. Hasnaine speaks 5 languages: English, French, Gujurati, Spanish and Malagasy.