Collecting and evaluating this data from emerging economies is especially challenging, as there is no standardised reporting. The data that do exist, however, reveal some clear trends on the size and scope of the burgeoning relationships between emerging economies and sub-Saharan Africa. For the first time this year, the DATA Report examines these growing relationships and offers some initial recommendations on how they can be improved and maximised in the coming years.
Emerging economies have become increasingly engaged in sub-Saharan Africa over the past two decades, deepening their economic and diplomatic ties across the region and providing larger amounts of development assistance and loans.
Many of the new relationships between emerging economies and countries in sub-Saharan Africa are driven by trade and investment interests, a trend that has sparked a renewed sense of economic opportunity in the region and has contributed to the growth rates achieved in many African countries in recent years. The most recent data show that South–South foreign direct investment (FDI) tripled from $14 billion in 1995 to $47 billion in 2000, and that South– South trade accounted for more than 26% of global trade in 2008. While these figures do not represent all activity on the continent, they indicate a trend of growing business and investment among emerging markets.
This chapter attempts to provide a snapshot of the current state of engagement between emerging economies and sub- Saharan Africa, in order to highlight the growing importance of these relationships. ONE has chosen to profile a handful of these countries, focusing on their activity and potential as donors rather than examining the full breadth of their trade, investment and natural resource interests across the region. As these relationships continue to expand, ONE hopes that there will be increased reporting, transparency and, ultimately, improvements in policy and coordination.
Although emerging economies are rapidly becoming key players in global development, their activities in sub- Saharan Africa are not well documented or easily monitored, making it difficult to assess their scope and to make accurate comparisons.
Evaluating official development assistance (ODA) from emerging donors is extremely challenging. The DAC provides a standard definition and criteria for what resources qualify as ODA. Non-DAC donors have no similar framework or any obligation to make their development assistance data publicly available, and the figures they do publish do not undergo the same external validation process that is applied by the DAC. These challenges are often exacerbated by the fact that many governments in emerging economies are characterised by low levels of transparency and have unreliable in-country mechanisms to collect any data that do exist. As a result, data on emerging donors’ development assistance and other flows to Africa are often inconsistent and out of date when compared with those of donors that are members of the DAC (which itself is plagued by a time lag between ODA disbursements and reporting).
A lack of clarity around the details of new trade, investment and lending agreements with sub-Saharan African countries (most notably in extractive industries) has also sparked concern in recent years. As noted above, most engagement among emerging economies and countries in sub-Saharan Africa is currently based on trade, investment and informal flows of assistance, areas that have few mandatory guidelines to govern interactions. Although there are some new mechanisms dedicated to monitoring such engagement (for example, the Natural Resource Charter and the Extractive Industries Transparency Initiative), most emerging economies were not involved in establishing these initiatives and do not yet participate in them.
Challenges aside, the growing relationship between emerging economies and sub-Saharan Africa tells an interesting, dynamic story that is already helping to expand the development dialogue and redefine the global community’s view of the region as a trade and investment partner.
Although engagement among sub-Saharan African countries and other emerging markets is expanding in varied and complex ways, the countries profiled in this chapter reveal some common trends that offer up a number of broad policy recommendations for the future.
Above all, as emerging economies and sub-Saharan African countries continue to deepen and expand their relationships, it is critical that they work to adopt processes to guide, monitor and account for their activities and to assess the impact that new policies and projects have on the livelihoods and rights of African citizens. Without these mechanisms in place, suspicions about emerging economies’ intentions in the region will continue.
Emerging donors should establish clear missions and strategies for their development assistance, trade and investment policies in sub-Saharan Africa. As their potential as donors grows, they should agree to transparent, accountable disbursements of development assistance, commit to clear pledges and timely collection of data, and strive to ensure that their development assistance policies meet the reporting requirements of the OECD DAC.
Related to this, emerging economies should also follow the aid effectiveness principles outlined in the Paris Declaration and the Accra Agenda to maximise the impact of their funding, improve partnerships with recipient countries and enhance coordination with developed country donors. In the years ahead, the G20 can be an important forum for coordination among developing countries, emerging donors and traditional, developed country donors.
Emerging countries should also increase their efforts to track trade and informal aid flows, and also support transparency and accountability efforts on the continent. They should sign up and agree to fully implement initiatives such as the Extractive Industries Transparency Initiative, the Natural Resource Charter, the Stolen Asset Recovery Initiative and the UN Anti-Bribery Convention.
Finally, the fact that some emerging economies are still major development assistance recipients themselves will become increasingly challenging for global financing mechanisms such as the Global Fund to Fight AIDS, Tuberculosis and Malaria. China and India remain two of the largest Global Fund recipients. Although Russia has recently begun receiving support from the Global Fund again, its plan to transition from recipient to donor should be an example that is followed by China, India and other emerging donors. China also recently became a net donor to the Global Alliance for Vaccines and Immunisation (GAVI), which is a step in the right direction.
G20 countries and other emerging economies are playing a larger role in the global economy and are already having a significant impact in many African countries. To gain clarity around these relationships and to maximise their support for poverty reduction efforts, strong commitments will be needed from emerging economies, as well as technical assistance from the global community. With this elevated status comes new responsibility, and these countries must ensure that engagement in Africa is carried out in a way that feeds into the continent’s own plans to achieve sustained and equitable economic growth, reach the Millennium Development Goals and eradicate poverty in the longer term.