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GlobalRiskInsights.com: Challenges lie ahead for the European Union’s lofty new Africa plan

Posted by: Berhane.Habtemariam59@web.de

Date: Thursday, 04 October 2018

Challenges lie ahead for the European Union’s lofty new Africa plan
 

The European Commission’s renewed efforts to increase investment in Africa may signal a new commitment to take their economic partnership to the next level. However, it remains to be seen how the EU can achieve its trade ambitions while being pulled in so many different directions.

What is the EU plan?

The European Commission gave its annual State of the Union address to the European Parliament in Strasbourg on 12 September. In it, European Commission President Jean-Claude Junker proposed a new Africa-EU alliance for “Sustainable Investment and Jobs” and put forth a plan to strengthen the Africa-EU partnership by, among other things, boosting strategic investment and economic integration. Additionally, the proposal included a goal of consolidating the multiple EU-African trade agreements into a single agreement wherein the economic best interests of both bodies could potentially flourish. The Commission stated that this initiative will create up to 10 million jobs on the continent within the next five years. As the Commission pointed out, the plan is more than a financial one, as it should represent “a radical shift” in EU efforts to alter the way the alliance operates with one another.

This renewed EU commitment to Africa highlights a continued desire to create a more economic partnership of equals. Indeed, in 2007, leaders from several European states and African countries established the Africa-EU Strategic Partnership to strengthen political dialogue and enhance economic cooperation. The fifth EU-Africa Summit took place late last year in Côte d’Ivoire to build on such efforts. In 2015, the EU committed €13.2 billion in aid for trade to Africa, making it its largest recipient. Juncker pointed out that 36% of Africa’s trade is with the European Union compared to 16% for China and 6% for the United States. Further, the EU remains the world’s most available market to African manufactured and processed export products.

The EU is stretched thin already

But how realistic is this new plan given the EU’s current constraints on its attention and budget?

First there’s the migration problem. Despite a decline in the total number of illegal border crossings since its peak in 2015, EU Member States continue to face consistent unauthorized immigration, particularly along the Eastern and Western Mediterranean routes. For example, roughly 19,000 asylum-seekers arrived in Spain in the first five months of 2018, almost as many as arrived there in all of the previous year. EU officials expressed concern that Spain could become the new weak link for illegal migration as resources in Spain are being stretched. On the other hand, Italy, which has been the main route for asylum seekers into Europe since 2016, has made public pleas for Spain and France to offer their ports for the disembarkation of migrants rescued in the Mediterranean. Nonetheless, their call failed to gain support from EU member states.

Earlier this summer, EU policymakers proposed creating “controlled centers” on EU soil and “regional disembarkation platforms” in Northern African countries, both aim at handling rescued migrants and both with support and financing from Brussels. However, these migrant processing centers have attracted concern that they would turn into de facto detention camps, and no African country has offered to host such facilities to date. Without an active plan in place that creates a safe and legal pathway to Europe, the EU continues to struggle with a steady flow of migrants, particularly from Northern African nations and the Middle East. Political conflict continues to play out between EU Member States on migration policy as the bloc’s desire for political unity continues to compete with each nation’s wish for autonomy in controlling its own borders.

Despite a uniform migration policy among member states, the European Commission proposed almost tripling the funding for migration and border management to €34.9 billion for the next budgetary cycle, from 2021 to 2027. For next year, the EU council anticipates €164 billion in commitments and €148 billion in payments for the budget. However, upcoming Brexit, rising nationalism, and security concerns will no doubt eat away at the EU’s ambitious budget plans.

China’s ambitions are also set high

China’s trade with Africa is also on the EU’s radar. The EU’s announcement arrives on the heels of China’s president Xi Jinping’s recent pledge of $60 billion for African development in the form of new loans to the continent. This pledge is in addition to the $136 billion the Chinese government, banks and contractors have loaned African governments from 2000-2017. China-Africa bilateral trade totaled $170 billion last year, and over a 30% increase from the previous year. Moreover, China committed to establishing a $10 billion special fund for development financing for the continent. Africa and China have been willing partners as the continent’s need for critical infrastructure financing is met by China’s willingness to provide more than $86 billion in commercial loans between 2000 and 2014. In exchange for its investment, China has not only gained access to an abundance of raw materials, but entered expanding markets in Africa for commercial goods.

Indeed, China’s deep commercial engagement with Africa is of chief concern to the EU, if not solely because of greater economic gain to be had, then also for greater geopolitical influence. As the United States continues to pursue its “America First” policies, China seeks closer, more focused economic ties with Africa. The commitment from China remains strong and the volume of Chinese investment in Africa will likely increase dramatically as the United States continues to wage its trade war with Beijing.

Outlook

Africa is still the EU’s largest trading partner for now. And the bloc’s revamped Africa-Europe investment plan outlines a clear set of economic actions bent on boosting free trade and increasing investment. However, Europe has its hands full already. Whether the EU actually has the bandwidth to support these new economic ambitions remains to be seen.

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