It’s apt that Afreximbank’s Annual Meetings began with a contemplation of our era’s defining – and mutually conflicting – forces: globalisation and deglobalisation. And who better to deliver an address on these trends than Dr Roger Ferguson – the giant of American economic scholarship, 17th vice chairman of America’s Federal Reserve from 1999 to 2006 and pivotal player in the globalising economic thinking of American administrations going back to President Clinton. Dr Ferguson also embodies Afreximbank’s “Global Africa” theme, as a member of our continent’s diaspora whose work has truly global implications and impact.
Though compelling and commanding in its presentation, Dr Ferguson’s address was sobering in its core message: today’s world is radically uncertain and unstable, and states must develop economic resilience, or be swept away by unexpected events and crises. A combination of climate change, rapidly shifting geo-political sands and shifting global alliances are all conspiring to make the world of 2024 considerably more unpredictable than a generation ago, when the Cold War’s conclusion allowed some to fantasise about the “end of history”.
But while many might imagine resilience as a kind of stubborn immovability, Dr Ferguson went to great lengths to point out the opposite – being resilient is not being unmovable or brittle; it is rather a question of agility and adaptability. Resilience is not, the American economist was quick to add, an absolute state, rather it is a spectrum. The goal of every country – and particularly those with the heightened exposure to global commodity markets like in Africa – should be to increase the country’s – and the wider region’s – systemic ability to withstand shocks and ultimately pull through them.
It’s a natural human impulse – applicable even at the level of the nation state or major financial institution – to engage in denial about possible catastrophes. This, Dr Ferguson asserted, was a potentially fatal weakness in the thinking of economic and political leaders. Disruptions to world trade and the global economy – as witnessed during Covid-19, after Russia’s invasion of Ukraine, and during soaring tensions in the Middle East – are inevitable, and any serious planning exercise must reflect this fact.
Given the practically guaranteed nature of turbulence and instability, the smart approach is to devise and maintain systems which detect shifts before they happen, or at least before their full force is felt. African economies have, Dr Ferguson contended, historically suffered because world commodity shocks and trade route disruptions have arrived as surprises, and no preparation has been undertaken as to how to insulate states from their worst consequences.
Though a much-vaunted idea in the West, Dr Ferguson challenged the characterisation of modern trade as entering a “de-globalisation” phase. Whilst this might be how the world looks from Washington, Brussels and London, the reality is rather that we have entered a period of “re-globalisation”, in which economic dynamics are being influenced increasingly by new centres of power and production: China, India, Nigeria, Indonesia, to name a few.
An era of “re-globalisation” will also require of economic and political leaders a degree of agility and the strategic foresight to see where the economic winds are blowing – not now or in a decade but in a generation.
Dr Ferguson’s clarity about African and Caribbean countries’ existential need for resilience is a timely one, and the Harvard medal-winning economist listed the challenges he sees in our collective path towards the kind of agility and strength we need. From growing income and wealth inequality (both within nations and between them) which escalates the risks of political unrest across our globe, to climate change, with both its threat to existing economic systems and opportunities for new emerging technologies and industries, this generation of “Global Africa” must navigate a world changing in ways we have never before seen.
But this hour of transformation – though it carries risks – also presents Africans everywhere with an historic opportunity to re-fashion global economics and trade dynamics in ways which enable all of us to fulfil our shared aspirations.
