The Group of 20 (G20) summit, an annual intergovernmental summit, gathers 19 sovereign countries, including the United Kingdom, United States, Canada, China, France, Germany, India, South Africa and two regional blocs. The Summit, which initially focused on global macroeconomic issues, has now expanded its agenda to include issues such as sustainable development, health, agriculture, climate change, and anti-corruption. Since its inception in 1999, agreements reached at this global summit have shown strong influence on both global and national policies across multiple regions and countries. The 2023 Summit, which was held in New Delhi, India on the 9th – 10th of September 2023, concluded with key agreements with implications on geopolitics, the climate transition and international trade.
Some of these include the establishment of the India-Middle East-Europe corridor (IMEC), the granting of permanent membership status to the African Union, the agreement to triple renewable energy sources by 2030, and the expansion of multilateral development banks. This article explores some of these key agreements and their implications on the African continent.
1. The establishment of the India-Middle East-Europe Corridor (IMEC)
India, the United States, the United Arab Emirates, Saudi Arabia and the European Union agreed to create a transport and economic corridor that connects the Middle East and Europe via rail and sea. The project, which is regarded as the “India – Middle East – Europe Corridor” (IMEC) would involve the construction of a railway network and the development of relevant port infrastructure from India to the Gulf to the Mediterranean as shown in Figure 1.
Figure 1: A map showing the Proposed India-Middle East Corridor (IMEC) | Source
Similar to the Belt & Road Initiative (BRI) that linked China and the West, IMEC is the first transport and economic cooperation initiative involving India, the UAE, Saudi Arabia, the EU, France, Italy, Germany and the United States. The project can potentially increase export efficiency, reduce transportation time and costs, create new jobs and increase output via transit routes among signatory countries, in addition to facilitating speedy trading between India and Europe by 40%. However, the agreement projects a different outcome for one of the countries in Africa – Egypt. Egypt controls the Suez Canal, which according to research is the shortest route and most important trade route between Europe and Asia, accounting for 10% of global goods, 7% of the world’s oil, and 30% of the world’s daily shipping freights. As shown in Figure 2, the monthly revenue derived from the Suez Canal reached 23 billion Egyptian pounds (close to 743 million U.S. dollars) as of January 2023, a 67.8% increase from its 7.8 billion Egyptian pounds revenue in January 2021, representing roughly 5% of Egypt’s GNP and 10% of its GDP. Despite its potential of significantly reducing the dependence of these countries on the Suez Canal, causing revenue loss to Egypt; IMEC creates a healthy alternative to transport goods for Europe and Asia, thereby easing global supply chains.
Figure 2: Monthly revenue of the Suez Canal in Egypt from January 2021 to January 2023 (in billion Egyptian pounds) | Source
2. The African Union becomes a permanent member of the G20
The African Union (AU) was granted permanent membership status at the G20 2023 summit, making it the second regional bloc to become a permanent member after the European Union. In addition to its potential to contribute to Africa’s economic growth through increased Foreign Direct Investments (FDIs), and economic partnerships among others, this development can significantly enhance Africa’s efforts towards net zero transition. Africa has rich deposits of the resources needed for a successful transition. It accounts for 60% of the global renewable energy assets and more than 30% of the minerals key to renewable and low-carbon technologies, but it is limited by financial insufficiencies and support from the international community. As shown in Figure 3, the cost of achieving net-zero emissions in Africa by 2050 would be about 2.8 trillion U.S. dollars, which requires enormous investment from the international community.
Figure 3: Estimated annual cost of reaching net-zero emissions in Africa from 2020 to 2050 | Source
This permanent membership status potentially exposes the 55 member states of the AU to an international community that is made up of global superpowers and economies, capable of propelling the continent’s transition to net zero through significant investment. It creates an opportunity for Africa to partake in and propel discussions that shape its economy and climate transition strategy. With this inclusion, the ability of the G20 to formulate fully responsive policies on matters of direct concern for Africa is enhanced, thus increasing its capacity to devise inclusive and equitable solutions that are truly beneficial to the global community as a whole.
3. Member states agreed to triple renewable energy sources by 2030
Global leaders at the G20 summit pledged to triple global renewable energy capacity by 2030 for the purpose of advancing the fight against climate change and enhancing the actualization of the net zero goal. This agreement is not equivalent to a complete phase-out of fossil fuel, which is necessary to combat climate change and its evident impacts in African nations, however, it signifies some progress. Despite climate-related agreements by the G20 not being internationally binding, especially in non-member countries, the commitment creates momentum for other governments and industries, in addition to influencing decision-making at the forthcoming COP28 in the UAE.
4. The summit called for an expansion of MDB’s debt mandate.
The summit amplified the mandate of multilateral development banks (MDB), as the host country called for a reformation and expansion of MDBs to offer the Global South, developing economies, and emerging markets long-term financing and new instruments for financing to drive both SDGs and the climate transition and also, strengthen regulations of cryptocurrencies. This move would be instrumental in supporting the Global South and developing economies to meet the financial demands of the recurring weather extremes and the transition to net zero. There is an imperative for the World Bank to bolster investments in infrastructure, technology, innovations, and climate-resilient projects in the Global South underscored by the urgent need to address climate change’s impacts and advance toward a sustainable, net-zero future.
Other significant outcomes with the potential to shape the global agenda include India’s proposal to initiate the G20 satellite mission for environmental and climate observation which marks a pivotal step in enhancing Earth monitoring and climate action; the establishment of an alliance dedicated to tackling pressing energy and economic issues through sustainable biofuels demonstrating a commitment to cleaner and more sustainable energy sources; and the declaration of the G20 Framework for Systems of Digital Public Infrastructure (DPI), a voluntary initiative focused on the development, deployment, and governance of DPI, heralding a new era in digital infrastructure collaboration among member nations.
As a gathering of the world’s most advanced economies and influential powers, the G20 Summit’s agreements serve as robust foundations that hold the potential to exert substantial influence over the course of upcoming global events. The ongoing UN General Assembly, which is held in New York will undoubtedly include deliberations on the progress of the Sustainable Development Goals (SDGs), as this year marks the halfway point, the socio-political state of African countries, turning climate ambition into climate action and potentially discussing some of the agreements from the G20 Summit.
About the Author(s)
Olayide Oyeleke is an associate at The AR Initiative; where Dr. Emma Etim is the Head of Research.
