African Union as a Member of the G20

The 18th G20 Summit hosted by India September 9-10, 2023, marked the first-ever G20 summit hosted by the country. With participation by 43 world leaders, and the highest turnout at any G20 Summit in history, India brought the world together at a time when geopolitical tensions among major powers are running high and much of the world is despondent about the state of multilateral institutions.  In this first article of a two-part series, we examine a major outcome that is relevant for globally minded companies.

African Union as a Member of the G20

India deserves praise for succeeding in adding the African Union (AU) as the newest member of the G20. Previously, the only African member of the G20 was South Africa. AU's primary purpose is integration and increased cooperation among its 55 African countries, with a view to achieving peace, security, and prosperity for the continent. Why is AU membership in the G20 important?  Because Africa is the largest market in the world with over 1.45 billion people.  Africa will have over 40% of the world’s population by the close of the century.  Many of the fastest-growing national economies are in Africa. Much of this is happening in digital industries, as well as energy, mining, and agriculture. The African Continental Free Trade Area (established in 2021) is the world’s largest common market by population, geographical size, and number of countries. We see four benefits of AU membership in the G20:

• Membership in the G20 empowers the AU to actively participate in shaping global governance aligned with its unique challenges and priorities, whether related to climate change, trade agreements, or security matters.
• G20 membership opens doors to increased foreign direct investment (FDI) and economic partnerships in vital sectors like infrastructure, technology, and renewable energy.
• The AU can actively engage in discussions related to international trade agreements within the G20, shaping trade policies that promote fair trade practices and reduce trade barriers.
• The AU can advocate for financial assistance and support for African nations, addressing crucial issues such as poverty alleviation, healthcare, and infrastructure development.

Congratulations to India for showing leadership on a global scale. India not only managed to make this G20 Summit a much more dynamic platform, but also revived faith in the ability of multilateral structures. In the process, it also underscored its own credentials as a leading player in the global hierarchy.

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