Africa has again taken center stage when it comes to the interests of different superpowers. Throughout history, there have been different scrambles for Africa. In modern history, the first was rooted in 19th-century colonialism, as European imperial powers divided and colonized the continent. The second was marked by the Cold War. When Africa gained political importance to the U.S. Cold War policy, Washington tried to secure African support while preserving its alliance with European colonial powers. A third wave is happening now, and its focus is more on exchange and trade. The scale of foreign interest is currently unprecedented – bringing opportunities to the continent but also potentially destabilizing it. Illustrative of this is how embassies have mushroomed there over the last years: 320 new embassies were opened between 2010 and 2016. The question is whether this surge in interest in the continent will play out well for the African countries themselves or whether powerful nations engaging with the countries will further increase inequality.

First, African countries do not (yet) show the unity needed to get on top of the scramble for Africa. For instance, the continent has China’s leader bargain with African leaders individually. It has been twenty years since the establishment of an African Union, initially intended to accelerate the process of integration in the continent and to enable it to play its equitable role in the global economy. However, these ambitions remain largely unachieved.

Second, the IMF already warned last year that Africa is heading towards a new debt crisis, with the number of countries at high risk doubling over the past five years and the total amount of external debt for the continent estimated at $417 billion. China plays an important role in this. Although the data are difficult to verify, since China does not participate in the OECD’s Creditor Reporting System, it is estimated that 20% of African government external debt is owed to China. Between 2000 and 2015, China provided loans of about $100 billion to Africa. In 2018, Chinese President Xi Jinping announced a new package of loans of $60 billion to more than 50 African leaders at the 7th Forum of the China-Africa Cooperation (FOCAC). Although only a portion of the promised sum and other Belt and Road Initiative projects do not qualify as “official development assistance”, it is remarkable that Xi promised the aid would not “come with any political conditions attached” – but with high debts instead. Still, the Chinese quick loans with fewer strings attached than Western aid are often difficult to turn down for African leaders who are in need of infrastructure and trade partners.

Of course, some African countries are performing well – as the continent will be home to several of the world’s fastest-growing economies – and could escape this negative outlook as superpowers will be less able to get their hands on these bright spots. With the lack of unity in the continent and debt continuing to pile up in many African countries, the current scramble for Africa may lead to greater inequality in relation to developed regions and growing disappointment among the rapidly growing group of young Africans who are seeing globalization turn against them, resulting in unrest and conflict.

Possible implications:

  • A rapidly growing group of educated, young and urban Africans will be more critical of their governments and give the ruling party a lower share of the vote, leading to the call for new, anti-establishment leaders. This force of a growing population in combination with already weak institutions might lead to political destabilization or conflict.
  • Chaos can also lead to the election of authoritarian leaders who will try to create order and modernize countries with a firm hand.
  • A lack of hope or optimism for progress might spark further migration waves.
  • The current levels of debt might result in an African debt crisis

RISKS MARKED ON THE RISK RADAR AS NUMBER 3: large-scale migration, rising inequality

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