A leading global risk consultancy says that despite the impacts of the war in Ukraine, global inflation, climate and security challenges, Africa continues to find resilience. A new report by Control Risks and its economics consulting partner, Oxford Economics Africa, finds that as global tensions create disruptions, they are also providing many African governments significant political, economic, and security opportunities.
The research, released on Tuesday, examines how African countries, governments, and corporations navigate a world marked by global tension and competition for resources and alliances, particularly among China, Russia, and the United States.
Given the continent's security measures and developing financial sector, the researchers focused on African states' efforts to retain neutrality while under pressure to join with global geopolitical corporations.
Patricia Rodrigues, a Senior Analyst at Control Risks, a firm specializing in political, security, and integrity risks, said Africa is attracting investment from various countries vying for support and access to the continent's economic opportunities.
"What we've seen from major geopolitical actors, be that the U.S., China, Russia, or the EU as a bloc, everybody's increasingly viewing Africa as a place where they can entice to either align with them on key geopolitical or global affairs. And in doing so, there's a lot of at least pledged investment that is being directed towards the continent. In addition to this, African governments are attempting to, I guess, play all sides, attempting to secure pledges of investment," she said.
During the U.S.-Africa Summit in December, Washington committed to allocate $55 billion to Africa over the next three years, focusing on healthcare, trade, climate change, and women's issues.
Recent reduced U.S. involvement in Africa has created opportunities for China, which has invested $10 billion in the continent from 2017 to 2022, and has also led to increased trade between Africa and Russia, growing from $9.9 billion in 2013 to $17.7 billion in 2021.
These three major global powers compete to secure access to Africa's mineral resources, which are critical in advancing new technologies. Africa holds almost one-third of the world's mineral reserves and eight and twelve percent of global gas and oil reserves.
Vincent Rouget is the head of Control Risks. He said the demand for African mineral wealth has also created the urge to industrialize in the continent.
"What we have seen in the last few months is more assertive moves by various countries to try to make sure that this surge in interest also benefits their economies. And we're seeing what you could call a critical resource nationalism coming back in some economies, where we see an insistence on local processing, more stringent local content requirements and generally an attempt to integrate these critical mineral supply chains with a broader drive for industrialization," he said.
In most African countries, natural capital accounts for between 30% to 50% of their overall wealth.
The continent loses $195 billion yearly of its natural capital due to illicit financial flows, illegal mining, logging, the illegal trade in wildlife, unregulated fishing and environmental damage.
Researchers say North African countries are positioning themselves as manufacturing destinations as Western countries are looking to disengage from China.
The head of Africa Macro at Oxford Economics Africa, Jacque Nel, said African economies will face challenges in an increasingly competitive global environment.
"We continue to see progress. It wasn't a short-term boost to access to financial services that we've seen. We continue to see the expansion and access to financial services improve across the continent, which is really important because, secondly, this is a catalyst for broader economic growth. Access to financial services is required and supports economic growth in most, if not all, other sectors of the economy," said Nel.
According to researchers, wars on the continent are receiving little attention from the international community, although it is affecting the continent and attracting external actors, such as Wagner and terror organizations.