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The Commonwealth Essential For Africa’s Growth

The Commonwealth Essential For Africa’s Growth

The Commonwealth is often derided as toothless and little more than a talk and pomp show during its annual summits, but it has been providing huge, if often unseen, help, support and advise to its members – especially those from Africa – and has become an important factor in the continent’s economic growth.

The Commonwealth of Nations has gone through many changes since its nebulous origins in the late 19th century. For many decades it was predominantly a political body, with issues such as apartheid, and its troubled course toward the democratisation of all its member states causing ferocious debate and bad feeling among delegates at their meetings.

Increasingly, however, the focus of the Commonwealth has shifted towards economic matters. This is hardly surprising. Many of the countries which make up its 53-strong membership (plus one suspended member) had Third World status and, therefore, little or no influence within the organisation. But a lot of those countries have shaken off their reputations for poverty and instability and have become ‘emerging markets’. Not least of all among them are India, Malaysia and, in Africa, Nigeria, Ghana, South Africa and Kenya. This means that at a time when global economic growth is mostly stagnating, a lot of the economies within Commonwealth will grow rapidly over the coming years.

Nineteen of the Commonwealth’s member states are African. Not all of them can claim to be economic powerhouses. But the purpose of the organisation, which has representatives on all six populated continents, is to benefit all.

The numbers associated with the Commonwealth are staggering. More than two billion of the world’s seven billion people live within it. But with less than a third of the world’s population, trade within the Commonwealth stands at only about 20% of the global total. With many of its member states still developing or still yet to develop appreciably, the potential for the future is obvious. But even as matters stand, trade within the Commonwealth zone totals $4 trillion and is expected to reach $6 trillion in the next few years.

The Commonwealth as a business model was recognised officially in 1997 when the Commonwealth Business Council was established. Now, in a global recession, the world is being scoured for areas of potential growth. And hungry eyes are turning, once more, to Africa. Of course, for many centuries, that the rest of the world valued Africa for its natural and human resources was very much to the detriment of the continent and its people. So talk of its rich mineral wealth, still largely untapped, and of its burgeoning youth is bound to make some uneasy.

However, the environment required for business to flourish is not what it once was. And the Commonwealth’s declared values, over which it has in the past suspended members, ought to ensure that when the tide rises, all boats, big and small, rise with it.

Development as a goal

Direct foreign investment, always a good barometer of the state of a country’s economy, is dependent on many factors, whether they be economic, political or social. A country that embraces democracy, which invests in education, is committed to gender equality, health and has a fair and independent judicial system is one that can legitimately claim to be making the most of its human resources and to be building its economy upon solid foundations.

In its current position, the Commonwealth is committed to all of the above. Its Harare Principles, agreed in 1991, state: “We recognise the importance and urgency of economic and social development to satisfy the basic needs and aspirations of the vast majority of the peoples of the world, and seek the progressive removal of the wide disparities in living standards amongst our members.”

The Commonwealth operates by means of consultation and consensus. But it goes further than the uttering of mere platitudes.

Apart from going so far as to suspend Zimbabwe, which has since withdrawn from the organisation, and Fiji, which is currently still under suspension, the Commonwealth assisted in the transition to multiparty democracy by lending its collective experience and expertise and in post-election monitoring in Malawi, Tanzania and Kenya.

By means, also, of training and seminars, individuals within institutions essential to the maintenance of democracy are given skills they will need in their jobs. Even newly sworn-in government ministers have benefited from such programmes. More and more, the world is being driven by markets. That is not to say that politics has no role to play. Indeed, it was only a combined political will that avoided the worst (thus far) of the global economic downturn. But with political decisions leading to unprecedented levels of sovereign debt, it is ultimately for the markets to drive the growth that will begin to start paying it off.

In the 21st century, as Sweden’s Foreign Minister, Carl Bildt, pointed out, a country’s place on the world stage will be defined by its economy and its ability to integrate into global markets.

Speaking last year at the Bahrain Global Forum, Bildt said what was needed was “the institutions and practices of what is loosely described as global governance, to safeguard the sustainability of the process of globalisation”.

The Commonwealth is just such an institution. The Commonwealth Fund For Technical Cooperation (CFTC) also provides training to government officials, improving their skills in encouraging economic development, attracting investment and in combating illegal activities such as corruption and money laundering.

Such is the importance attached to its African members and the recognition of the formidable challenges that exist there, the CFTC has committed more of its resources to them than it has to anyone else.

The need to alleviate the burden of debt on the potential for growth has also been recognised and is being actively tackled by the Commonwealth’s Debt Management Programme. It has installed its Debt Recording and Management System (DRMS) software in 21 African countries. The software helps governments to keep a record of, and monitor, their external and domestic debt. Here too, in matters of debt management, the majority of the Commonwealth’s resources have been targeted at its African members.

But it is in trade, specifically, that the Commonwealth is seeking, ultimately, to benefit its African members. By means of its Hub and Spokes project, in which it partners the European Commission (EC) and the Organisation Internationale de la Francophonie (OIF), the Commonwealth provides policy guidance, advice and training in matters such as creating trade negotiation policies at national and regional levels, and World Trade Organisation (WTO) decisions. To this end, the project has forged partnerships with African institutions such as the African Union and the Economic and Monetary Community of Central Africa.

The newest member of the Commonwealth of Nations, Rwanda, has served as an example of what the organisation can do for a country that is making a genuine effort to leave instability and hardship behind it.

Guidance and support

The central African country was accepted into the Commonwealth in 2009 (one of only two which were not once a part of the British Empire) after six years of lobbying. This is remarkable considering the terrible events of its very recent past. The first effect of Rwanda’s membership was symbolic. It sent a message to the world that it was a very different country to that of 1994 and it was also a statement of independence from its French colonial past. And by belonging to such institutions which exercise a high degree of oversight in matters of human rights and democracy, foreign investors will feel more inclined to look at its prospects more favourably.

Since joining the Commonwealth (though not exclusively because it joined), Rwanda’s image has been transformed in the eyes of the international business community and it is a rising star of the World Bank’s Ease of Doing Business index, up whose rankings it has been making sizeable leaps.

Tanzania joined the Commonwealth as Tanganyika in 1961. It is exactly the kind of country that the Commonwealth, not to mention a whole host of other interests, wants to develop. The East African country is one of many on the continent that has valuable mineral deposits and, in its case, sources of oil and gas.

The organisation has provided assistance in forming export strategies in that country and lent its technical, legal and economic expertise in negotiating with private partners on energy projects and is well placed to offer continuing support as Tanzania looks to make more of mining and tourism especially.

The current food crisis, which is only predicted to deepen, has also, ironically considering the continent’s ongoing struggle with famine, propelled Africa forward as a potential ‘breadbasket’ for the world. It is predicted that 60% of the world’s arable land is contained in Africa and much of that belongs to Commonwealth member states.

Environmental conditions for agriculture are often ideal in Africa. All that is lacking is a developed agricultural industry. That is nothing new to the impoverished African farmers, but the continuing creep of globalisation is reaching them. In the face of, for instance, EU farming subsidies, the need for unity between Africa’s developing nations is essential. It is certainly the way the world is going, with trade zones, political and fiscal unions and partnerships continually adding new and higher layers of organisation to global business.

In this sector more than perhaps any other, the value of the Commonwealth’s knowledge and expertise cannot be overestimated, though its budget is not sufficient to make direct investments. Its policy, however, of placing experts from other member states within institutions which need them has a proven record of reaping rewards.

The Commonwealth has often had to answer accusations that it is essentially toothless. Unlike similar organisations, there is no obligation on its members to act in a prescribed manner. And its influence does not stretch much beyond itself. While this is true, it misses the point that what it can achieve among its own members is not insignificant. Being linked by a common history, even if not always pleasantly, does at least engender a spirit of cooperation and understanding, which is a solid base to work from.  Since decisions are arrived at by consensus, there is less chance of the quarrels and tensions of a voting system that would force members to act against their wishes.

And the very fact it has no formal charter means that, despite its size, which might otherwise be unwieldy, it is able to adapt to rapidly changing events, such as the current shake-up in the world’s economy.

More than anything else, the Commonwealth of Nations is an ideal forum for the pooling of experience and expertise, the exchanging of ideas and the offering of assistance.

For an African nation, whether it be sorely underdeveloped or experiencing unprecedented growth, where capacity building must include knowledge, technical assistance and support from friends who share their aims and values, the Commonwealth of Nations, remains relevant in the third century of its existence.

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Written by African Business Magazine

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