Envisioning New Partnerships For Africa’s Future: Making Global Governance Work in a Post-2015 World

GGF 2022 Global Development Governance Working Group • September 2013

Executive Summary

Who sets the post-2015 development agenda? To what extent does Africa’s future depend on China? What role does global governance play in encouraging development outcomes?

Although conclusive answers are beyond the scope of our report, these big questions motivated us, as a working group of young professionals from China, Germany, and the United States, to imagine what the world could look like in 2022 – 10 years from when our working group first met.

Over the past year, we have worked through a scenario methodology, a process that has been developed for strategic planning in both governments and corporations. While such a method cannot predict the future, it can help a group break out of linear, trend-based thinking to instead create a wider set of plausible and internally consistent futures, to play out certain scenes in great detail and to trigger potentially innovative thought experiments, all without abandoning the broader picture of how current influential factors fit together. The process is not meant to provide conclusions. Rather, it should stimulate further discussion about important scenarios that may be off the beaten path of historical trend analysis, and about how these scenarios can inform our discussions of current policy options.

As we combined our collective insights about the future of global development governance, we narrowed our focus on three key questions:

What will be the key sources of development finance in 2022?
Who will take action to shape this future, with what incentives?
What actions can diverse stakeholders take today to improve outcomes and mitigate risks?

To structure our analysis, we focused on financial flows as well as the associated institutions, norms, goals and multi-sector relationships in 2022. To make these questions more tangible, we concentrated on Sub-Saharan Africa, as it has been a primary focus of the development aid agenda and is also a dynamic region likely to experience drastic change over the next decade.

This report outlines the three main scenarios developed by the working group, as well as key insights and policy recommendations that emerge from them. It is important to note that while all scenarios are illustrative rather than predictive, they use specific names and numbers to make the visualization and discussions more vivid.

We developed three scenarios through several phases. First, we created a list of factors that could affect the future of global development governance, ranging from the relative economic positions of each region to technological innovations and paradigm shifts in institutional culture. Second, narrowing to a shortlist of critical factors, we defined how each factor influenced and was influenced by every other factor. Third, using the matrix of relationships among factors, we calculated all possible factor combinations that could occur simultaneously, and these groups of internally consistent factor definitions became the templates for our scenarios. Fourth, we created a detailed storyline and timeline of how each scenario could unfold over the next decade, outlining the resulting threats and opportunities for stakeholders. Finally, looking backwards from 2022, we defined strategies to prepare for an uncertain future, asking what various stakeholders could do to mitigate the threats and take advantage of the opportunities that our three out-of-the-box scenarios had brought to light. We drafted policy recommendations based on those strategies that would be most effective across all scenarios.

Three Possible Futures for Development Governance

Scenario 1: “Africa Left Behind” features outdated global governance. There has been little progress either on a compelling post-2015 development agenda or towards more development-friendly global governance of climate change or trade. Ineffective domestic governance in many Sub-Saharan African states has been compounded by corruption, conflict and vulnerability to natural disasters. Social, political and economic tensions between the US, the European Union, China and other rapidly growing emerging economies undermine development cooperation. The outcome is a situation in which African countries cannot climb up the value chain, remain restricted to the export of raw materials and exhibit increasing levels of economic inequality and political polarization. Developing countries in Southeast Asia, instead of Africa, benefit from the spillovers of China’s rise. Contrary to popular expectations, our factor analysis produced a scenario in which rapid economic growth in China does not translate into inclusive economic growth in Sub-Saharan Africa.

Scenario 2: “Cut-Throat Competition” presents a scenario in which global development governance has unraveled. Traditional development assistance is replaced by corporate and philanthropic funders, who make use of innovative – but uncoordinated – financing mechanisms, such as peer-to-peer lending. At the same time, there has been a lack of progress in any other realm of global governance, such as climate. Economic hardship in former donor countries reduces their abilities to tackle global development challenges, weakening bilateral and multilateral development institutions. As a result of this more fragmented and private sector–driven approach, only countries with already strong investment climates can compete effectively for finance. Competition creates a sharp division of African states into “winners” and “losers.” The winners become increasingly independent from traditional aid and integrated into partnerships for growth, whereas the losers are more marginalized and excluded.

Scenario 3: “Africa Rising” is characterized by a new, more flexible system of global development governance. This scenario has resulted from Africa’s growing attractiveness to private investors, partly due to greater political stability under a new generation of African leaders, combined with world-class infrastructure improvements. As a consequence, development finance has shifted away from Official Development Assistance (ODA) toward leaner bilateral aid agencies (including from emerging donor states), making way for private sector and philanthropic investments and intra-African regional sources. More diverse financial sources reinforce greater policy freedom for African states. Although traditional ODA accounts for only a small portion of finance to Africa in 2022, it has played a positive role over the decade in reducing aid dependence. Regional integration and cooperation increases among African states.

Insights

After constructing three alternative, internally consistent pictures and histories of the future, we consider what these scenarios suggest about the world today. The scenario-building process supports several key findings:

African development rests on African solutions. The development agendas of African states should ultimately be defined by Africans themselves, and good governance in Sub-Saharan African states is a critical factor to make that possible. Sustainable growth requires skilled leadership, not just in the national executive but across the spectrum of civil society organizations, opposition political parties, technical or academic researchers, and private businesses, all of whom can hold governing bodies and each other accountable for development results.
China’s development will not guarantee Africa’s success. Contrary to what many trend analyses suggest today, China could grow without bringing African economies along if various internal and external factors keep African states at the lowest end of the value-added chain, with persistently uncompetitive industrial capacities.
Infrastructure improvements in Africa are critical. Although the need for infrastructure investment is not a new insight, “leapfrogging” infrastructure was a key factor distinguishing our scenarios, particularly in telecommunications and transportation. Both new investment and maintenance of digital and traditional infrastructure remain essential for supporting private investment and providing public services.
Economic reforms alone are insufficient. State stability, capacity and effectiveness are also necessary for long-term African development. In addition to African domestic leadership, the US, the EU and traditional donor institutions must actively make way for African decision-making. While first steps in this direction were taken with the High Level Forums on Aid Effectiveness, African regional cooperation or partnership with other emerging regions could help smaller developing countries to meet international bodies on a more equal footing.
Policy coherence beyond aid is crucial for development. The post-2015 development agenda should take global governance seriously, on issues ranging from trade and climate to energy policy and cyber security. Global development governance is linked to the governance of other policy areas in which all countries have a stake.

Policy Recommendations

Based on the insights drawn from the three 2022 scenarios, we formulate three sets of recommendations for today’s policymakers, including examples of concrete actions for specific stakeholders to take:

Strengthen partnerships for development: Shift the paradigm of development towards mutually beneficial partnerships on concrete issues in order to deepen linkages between African states and between African states and non-traditional financial sources. For example:

African Ministries of Health can collaborate on disease surveillance and public health infrastructure.
Philanthropists and African Ministries of Education can establish within-African education exchanges.
The African Union (AU) and an emerging Brazil, Russia, India, China and South Africa (BRICS) development bank can cooperate on cross-border infrastructure projects, particularly to facilitate intra-African trade.
African think tanks or locally organized discussion forums can host quarterly workshops to enhance citizen participation and domestic political accountability for development spending.
Entrepreneurs and individuals can strengthen links between diaspora and the continent – for instance, through the expansion of tools like an “African LinkedIn.”

Reform global institutions: Promote policy coherence. For example:

The G20 can include a Global Economic Council with representation from Sub-Saharan African states to include development goals in the context of broader economic governance.
The AU can set the agenda for the next United Nations Development Cooperation Forum to create an inclusive space for emerging economies, traditional donors, private sector investors and other stakeholders.
Traditional donors can shift their primary forum for coordination from the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD) to a more flexible and inclusive coordination mechanism, perhaps building on the the UN Economic and Social Council’s biennial Development Cooperation Forum.
OECD countries can enact coherent development-friendly policies consistent across other policy spheres such as agriculture and trade.
The World Bank and the International Monetary Fund can make symbolic and substantive moves towards greater representation of emerging donors and developing countries, including instituting more meritocratic rules for presidential selection.
Future development agendas can be “climate friendly” – for instance, by including indicators of vulnerability and resilience to help communities adapt to climate change.

Change the development finance landscape: Promote innovative financing mechanisms. For example:

Entrepreneurs can create citizen-to-citizen cooperative investment schemes, an expansion of existing micro-finance networks that already provide international micro-loans, using internet and mobile phone technology to reduce transaction costs. We coin the term “Citizen Development Assistance” (CDA) for this expanded platform.
African states can foster new business models based on the “Benefit Corporations” legislation already enacted in the US, enforcing positive social and environmental impact alongside a financial return.
Traditional donors can redefine ODA to reflect the broader reality of financial instruments for development. For instance, further emphasizing guarantees and insurance in the calculation of states’ development contributions can improve the current net flow–based reporting system.
As the scope of development finance options grows, think tanks and multilateral development institutions can provide training on new financing models for African leaders and potential investors.
African states with the petroleum or other resources to establish sovereign wealth funds can build the institutional frameworks necessary to protect them from negative political interference and ensure that they become engines of national and regional growth.

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