How Russia-Ukraine war ends, and implications for Africa

The war in Ukraine and the related rivalry between the US and China loom large in every discussion of international relations. How might the war end, and how will these scenarios affect Africa?

African projections for the next 20 years The futures and Innovations from the Institute for Security Studies show that economic growth in Africa is unlikely to deliver commensurate improvements in living standards. The outlook is even worse when the impact of the conflict in Ukraine is taken into account.

Although Africa accounts for only 3% of the world’s economy, its large and poor population (17% of the world’s total) means that the continent is badly affected by the war, which has affected food and fertilizer supplies and prices.

As the fighting continues, resources will be diverted from Africa, including aid, investment and humanitarian aid. Already the International Monetary Fund and the World Bank regularly revise their growth and poverty alleviation estimates downward, citing lost potential. decade.

Rather than moving toward a sustainable world that Africa can achieve, lower global growth will hinder income gains and poverty reduction. Africa needs to grow rapidly to close the widening global average income gap. Chart 1 includes the history and forecast of Africa’s gross domestic product (GDP) per capita to 2043 compared to the rest of the world average.

From 1963 to 2022, Africa’s economy grew at an average rate of 3.5 percent. With a young and rapidly expanding population, 3.5 percent represented an average improvement of less than 1 percent in GDP per capita. Meanwhile, average growth rates in the rest of the world were slightly lower at 3.3 percent, but lower population growth resulted in more than twice the growth rate of GDP per capita.

The ISS Current Path predicts that Africa’s economy will expand at a healthy 4.5 percent from 2024 to 2043, compared to an average of 2.3 percent for the rest of the world. But due to rapid population expansion, GDP growth per capita of 4.5 percent will be around 1.5 percent annually in Africa and roughly the same in the rest of the world. The main reason is that while the continent’s population will grow by 2.2 percent annually, population growth will be below 0.5 percent worldwide. The result is no catch.

Once the impact of the war in Ukraine is taken into account, the predictions become more pessimistic.

Modeling of up to 11 sectors the scenarios It enables the projection of Africa’s development potential for each African country in four global scenarios. In an ideal Sustainable World, meeting the Sustainable Development Goals sees Africa’s economy grow by 7.5% by 2043. In reality, this is an almost impossible goal, considering that no nation, not even China, has the annual rates they should be able to achieve. The conflict in Ukraine further casts doubt on the achievement of a Sustainable World.

No one knows how the battles will end, but the scenarios help to analyze the consequences of different alternatives. Three other global scenarios capture all reasonable long-term outcomes.

In a growth world, countries focus on rapidly improving incomes and returns on investment, ignoring environmental concerns. A divided world, perhaps closest to the current trajectory, is global rupture, populism, nationalism and retreat from globalization. In a world war, the competition between the West and China dominates the world’s economy, politics and relations, with violent results. Africa suffers the most in this situation, without any possibility of rapid development.

An African scenario accessories each of these global scenarios based on the extent of regional economic integration and Africa’s relations with countries and regions such as China, the European Union (EU) and the US.

Chart 2 presents four ways to end the conflict in Ukraine, linked to the four global scenarios above. In Sustainable World, it culminates in a negotiated settlement by China and others. The territory of Ukraine has returned to its pre-2014 borders, and is included in the EU, but not in the North Atlantic Treaty Organization (NATO). This is the best scenario for Africa and would cause the least disruption to its growth potential and development needs.

In a divided world, a Republican US president ends military aid to Ukraine. Europe fills the gap to some extent, but Ukraine’s war effort is weakened, resulting in a punitive standstill. Germany is forcing Ukraine to negotiate. Ukraine cedes Crimea to Russia, but as a guarantee of its security, it joins NATO and the EU.

World of War is a series of overlapping violent conflicts. The conflict in Ukraine has become one between NATO and Russia. With China’s support, Russia avoids military and institutional collapse. While NATO is focused on Russia, China occupies Taiwan. India will finally face a strong China as the two giants of Asia collide. Suffering significant military losses in Europe and in efforts to defend Taiwan, the US turns inward and leaves NATO. Its high power is severely eroded.

In the Growth World, the fight ends with China/UN mediation. Ukraine loses Crimea and must accept neutrality, join neither the EU nor NATO. The world is moving forward as the growth of the global south accelerates. Russia becomes an economic vassal of China, increasingly worried about the threat of aggression in the East. The international focus is on economic growth until the impact of climate change forces humanity to confront an even greater enemy.

Our model suggests that even under the Sustainable World scenario, Africa would still have 127 million people living in extreme poverty by 2043. The scenario for World War II is much bleaker, with nearly 200 million Africans facing extreme poverty in 2043.

Africa has come a long way, but will struggle to fully realize its potential. Since independence in the 1960s, African countries have gained less than other regions from globalization and the associated expansion of trade, knowledge and financial flows. In the end, raw materials have risen, not the economic growth targets of the Lagos Plan action (1980) or Abuja covenant (1991), changed the outlook for Africa.

From 1994 to 2008 (when the financial crisis hit), the continent had the most sustained growth. The average growth rate was 4.6% per year, and the per capita income increased by 35%. However, high levels of inequality and rapid population growth meant that the proportion of Africans living in extreme poverty was only around five percentage points.

Africa needs global stability. he needs one approach between the West and China, and must take control of its own growth agenda. The continent will suffer if the current efforts to instrumentalize Africans in this divided world continue.

Africa needs debt relief, Chinese trade and investment, expanded relations with the EU, US capital and more trade with the rest of the global south. It needs an agricultural revolution to ensure food security and accelerate trade integration to provide a larger and more attractive domestic and foreign capital market. Full implementation of the African Continental Free Trade Area agreement could unlock faster growth than any other scenario.

Meanwhile, the elephants struggle, the grass suffers.

Jakkie Cilliers, Head of African Futures and Innovation, ISS Pretoria

(This article was first published By ISS Today, Premium Times union member We have their permission to republish).