Canada and Africa Relations;A New Path Forward
Introduction
Historically Canada’s relationship with the African continent has sat between two competing impulses, which have been deeply embedded in the Canadian public and policy elite. The first impulse sees Canada engage when there is a crisis, such as famine, a disease outbreak or a humanitarian crisis (black, 2016). In this case, Canada usually responds with positive rhetoric that is almost always followed by a lack of any long-term commitment or a follow-up action plan. The other impulse sees policy and academic elites (realists) perceive any significant amount of resources dedicated towards Africa whether it is human, institutional, or financial as not being a priority and being a waste of resources (Black). As a result, Canada has been caught between two competing interests of seeming to be doing something while committing the least amount of resources, limiting itself to as little risk as possible.
This policy approach has resulted in Canada having an unsustained, and incoherent relationship with the continent and has resulted in the Canadian public having a limited understanding of the continent because “Africa” is viewed through the prism of a particularly prominent issue area (most often aid, “peacekeeping”, or the extractive sector), while the image of the continent thereby projected to Canadians is distorted and decontextualized” (Black).
In a report entitled; Canada-Africa Relations in Changing Core-Periphery Dynamics: A Chance to ‘‘Come Back’’ Differently; Elizabeth Cobbett suggests Canada has an opportunity to reengage Africa and “come back” differently if it can look beyond its mining interests and become a partner in this rapidly changing continent through a new and bold international partnerships. She further notes Africa’s impending economic rise should provide an incentive for the Government of Canada to engage in a meaningful way. If Canada can achieve this it might gain political and economic clout on the continent moving forward.
Why does this matter?
It only took China 35 years to go from an agrarian society to almost a fully industrialized powerhouse. As a result of China’s rise, it has shifted geopolitical power. The proliferation of technology will speed up this process even more for African states. The fact that Canada’s bid for a temporary seat in the UN Security Council received virtually no African vote illustrates the disconnect between African states and the Government of Canada. Former Canadian ambassador to the UN Yves Fortier described it as “ a lamentable result” “a reflection of things that Canada has done or not done that a majority of nations” disapprove of.
Another important factor Canadian policymakers should consider is that Africa is the world’s second-fastest-growing economic region after East Asia. Coupled with China’s meteoric rise as an economic, and political power African states have new markets and are becoming less dependent on Western countries. Gray et al (2013) suggest that the structural transformation of the world economic system is going to have important implications for developed countries. African countries are seeking alternative trading partners as they move away from the Western-centered neoliberal world order (Gray and Murphy 2013). Moreover, Canada’s traditional trading partners have adopted protectionist economic policies.
This presents a real challenge for the Government of Canada and there is a growing chorus from some Canadian economists who suggest Canada needs to seek alternative markets in developing countries. They argue that Canada needs to reevaluate its reliance on the U.S. market for trade and export. Couple this with the fact that Donald Trump’s undeclared trade war with Canadian companies has left many businesses with an uncertain future. A recent report called Canada Economic Outlook, notes Canada needs to look to alternative markets due to the “United States dismantling of large parts of the “Washington consensus” in favour of “America First” unilateralism, compromising open markets and the post-war liberal economic order.”
The report further states, “Brexit and political struggles worldwide suggest this might become the established norm than the product of an erratic US administration.” This article is not making an argument for Canada to stop trading with arguably the world’s biggest economy. It is merely suggesting Canada needs to look to alternative markets to maintain a competitive edge in unpredictable economic times. With the impending economic rise of Africa, this would seem like a logical policy choice for Canadian policymakers.
Britain, China, the United States, France and the European Union have all launched initiatives to strengthen bilateral trade and investment relationships with Africa. The UK is set to host an African Investment Summit later this year with key mandates to maintain existing trade relationships if/or when it leaves the EU and look for other investment opportunities. The EU has the Joint Africa– EU Strategy which was adopted at the Lisbon Summit in 2007. It established a partnership of equals and goes beyond development to tackle issues of common interest.
In an increasingly interdependent and fast-changing world, Canada’s and Africa’s futures are closely linked. From threats to peace, democracy and economic prosperity to the fight against poverty and climate change, what affects Africa will eventually affect Canada and vice-versa.
Canada should look beyond the extractive sector
To achieve a sustainable and mutually beneficial economic relationship with the continent, Canada should look beyond its mining interests and develop an economic relationship, which is beneficial to all parties involved. As it stands, Canada’s economic investment in Africa has been primarily in the extractive sector. Canadian companies investing in the extractive sector have more than doubled over the last 20 years. Currently, the mining and the extractive sector is ranked the largest source of Foreign Direct Investment in Africa by the Canadian government (McHenry, Doepel, and Urama 2017).
The mining sector is an integral part of the Canadian economy. Internationally, Canada is a leader in mining and one of the world’s largest producers of minerals and metals. The industry accounted for 19%, or $97 billion, of the value of the goods Canada exported in 2017. Toronto is the global hub for mining finance. The Toronto Stock Exchange (TSX) and TSX Venture Exchange are the world’s number one mining and exploration listing venues, where nearly one-third, or $8.5 billion, of the world’s total equity capital was raised in 2017. The different levels of government also rely on the mining sector for tax revenues. According to the Natural Resource Governance Institute, in 2017, the sector paid $9.3 billion to the Canadian governments.
By contrast, in developing countries “mining activities are associated with human rights violations, unethical behaviour, deforestation, and land degradation.” In her report entitled Peace and Security in Africa and the Role of Canadian Mining Interests: New Challenges for Canadian Foreign Policy, Bonnie Campell notes that Canadian politicians have continually insisted that the need to invest in Africa is to bring economic development and strengthen governance, however, strong empirical evidence shows this has not been the case. Evidence has shown that under certain conditions investing in mineral-rich countries may fuel violent conflict and impede development. Similarly, research conducted by Collier and Hoeffer, 2000; Collier, 2004 and Ross, 2001 found similar outcomes. A report by the World Bank called Natural Resources and Violent Conflict found “developing countries face substantially higher risks of violent conflict and poor governance if they are highly dependent on one or few primary commodities” (Bannon et al, 2003).
In 2005, the Canadian International Development Association (CIDA) announced that it was creating a new strategic partnership with African countries to increase aide ties. This new partnership was informed by a report called Canada Making a Difference. A Policy Statement on Strengthening Aid Effectiveness. One of the report’s findings was Canada needed to increase its ties to developing countries by providing enhance aid. The countries chosen would receive “priority” when it came to the allocation of development assistance to help strengthen their governance structure.
However, some scholars have critiqued this partnership arguing that the Government of Canada was more motivated by its own economic interests rather than a desire to implement policies that would be beneficial to all countries involved. These scholars point to the fact that out “of the nine countries selected by Canada for an enhanced aid partnership identified in the country’s policy statement five were located in Africa, all had important mineral resources and for three, Ghana, Mali, and Tanzania, mining represents the country’s leading sector”(Corbett, 2017). As this report was being written a Canadian convoy carrying employees of a Canadian-owned mining company was attacked in eastern Burkina Faso leaving 37 people dead. Global Affairs Canada condemned the attack stating, “to date, we have no reports of any Canadian citizens being affected. Canada stands in solidarity with the Burkinabè people and supports Burkina Faso’s efforts to consolidate peace and stability and in its fight against terrorism.”
What Needs to Change?
I noted earlier that Canada has been caught between two competing interests. Canada engages the continent when there is a crisis, which usually results in aid money pouring in. However, this the wrong policy approach, Canadian policymakers need to look beyond aid and recognize that focusing on aid as an economic development model is no longer a viable option or solution. The World Bank published an influential report entitled Assessing Aid: What Works, What Doesn’t, and Why (World Bank, 1998). The report was based on econometric analysis. In it, the authors argued that aid produces growth only in countries with a ‘good’ policy environment and ‘sound’ fiscal, monetary, and trade policies, without which, aid is wasted. Aid is only effective if it is combined with the right policies in recipient countries.
Furthermore, Canada’s economic interests should go beyond the extractive sector. There are several economic areas Canada should invest in. Manufacturing is a growing sector on the continent. Manufacturing production has more than doubled, from $73 billion in 2005 to $157 billion in current prices in 2014 (or $98 billion in 2005 prices). African manufacturing has grown at 3.5% annually in real terms over the past decade, which is faster than global growth in manufacturing production. The share of manufacturing in total formal and informal employment (International Labour Organization (ILO) data) fell from 6.4% in 1991 to 5.3% in 2013, but the total numbers of employees in Sub-Saharan Africa increased from 11.0 million to 17.7 million.
New Economic Development Model
Canada also needs to rethink how it promotes economic policies on the continent. Since the Bretton Woods conference, which, under American, British and Canadian leadership, established the postwar international architecture of a rules-based global trading system and the institutions to support it (IMF, World Bank, WTO, parts of the UN).These international regulatory institutions have continually insisted African countries liberalize (globalization), which forced many developing countries to eliminate trade barriers. Proponents of this economic model argued that trade liberalization would increase productivity, foreign direct investment (FDI), technology and migration flows, which would ultimately result in higher incomes and job creation, and hence, a reduction in poverty (Vickeri 2006).
There is no denying this model has improved the lives of millions of people living in extreme poverty around the world by providing access to basic medicine, improved access to education and technology. For example, former Prime Minister Steven Harper instituted a flagship development program initiative of Maternal, Newborn, and Child Health (MNCH) to reduce maternal and child mortality in Sub-Saharan Africa. The funds provide by the Government of Canada helped provide nutrition, strengthen health care services and reduced the spread of diseases. The program has been widely hailed as saving millions of mothers and newborn lives.
Despite these improvements and two decades of unprecedented economic growth, the number of Africans living in extreme poverty still increased by more than 100 million people (Beegle et al. 2016, v). While globalization has reduced inequality between countries, it has increased inequality within countries, and this is true in both advanced and developing economies. A report called; Growing Unequal Income Distribution and Poverty in OECD Countries (Organization for Economic Cooperation and Development, 2008a) revealed growing inequality and poverty in two-thirds of OECD countries and found that the economic growth of recent decades has benefited the rich more than the poor. An Oxfam report noted, “twenty-six men now own the same wealth as the 3.6 billion people who make up the poorest half of humanity” (Oxfam 2017).
This inequality has given rise to populist politics and a significant backlash against globalization. The backlash has been most prominent in the very same western economies that promoted these policies, most notably the United States and the UK. The increase in poverty in developed countries has been felt by the middle-class. Populist leaders have laid blame on unfair “foreign competition, bad trade deals, and have blame immigrants for stealing jobs.”
Policy Recommendations
Of course, Canadian-African relationships are much broader, complex and it encompasses far more than the issues highlighted in this brief article. Canada has long-standing and “steadily expanding trans-societal links, other dimensions of trade in goods and services, the seemingly never-ending “crisis” of humanitarianism in the face of protracted humanitarian emergencies, and the challenges and repercussions of climate change.”However, when these issues come together they highlight the need for Canada to engage in a more comprehensive and coherent policy approach toward Africa. As David Black notes “ a more coherent policy towards Africa does not mean without any contradictions; it simply means that in the course of the policy process, the contradictions are recognized, confronted, analyzed and, to the greatest degree possible, mitigated.”
One of the practical approaches Canada can take is to increase and sustain resources (both human and financial) devoted to Africa policy. A systematic engagement will be one of the best ways to address some of the challenges facing the continent. Partnering with countries with deep knowledge and expertise on the issues and opportunities facing the continent is a good first step. Secondly, policymakers should identify ways that Canada can bring distinctive priorities and assets to bear in addressing these issues and build and sustain relationships with key African counterparts in “partner” countries, regional organizations, and civil societies.
Evidence-based research to inform policy is one area Canada can use its expertise to help African states. On average, Sub-Saharan African governments spend less than 0.5% of GDP to support evidence-based research — the OECD country average is more than four times that at 2.3%. African governments have recognized the importance of research and committed to increasing investment in science and technology to 0.7% of GDP by 2020 and 1% of GDP by 2025. Canada can use its expertise in this area to create a strong development research “ecosystem”, such as those found in high-performance Western countries. These research institutions can act as a bridge to civil society and academic researchers and a point of reference for thoughtful policy-oriented research. The various Canadian governmental bodies with relevant responsibilities and expertise will need to be brought into a more concerted policy-making process around critical challenges facing the continent.
The Government of Canada can develop national and regional initiatives that accelerate and support research and research-based education in Africa, to build the necessary human capital needed and increase the capacity of institutions to provide valuable training and research opportunities. More local research should lead to an increase in evidence-based policymaking and hopefully generate better outcomes for citizens. The African Institute for Development Policy (AFIDEP) in Kenya is a great institution that “promote[s] and nurture[s] a culture of evidence-informed decision-making in government institutions and parliaments and build[s] a stronger community of practice in evidence-informed decision-making in Africa.” Canadian policymakers can look to partner with these organizations.
From a “realists” point of view, the time and resources spent on Africa are largely “wasted.” If the Trudeau and subsequent Canadian governments take this approach it will damage any hope we have to build or forge a sustained coherent policy with Africa.What is not in our national interest but continues to be the preference for Canadian politicians is inflate our importance in far-away ‘trouble spots’, and exaggerate the nobility of our motivations. Black noted this approach is not credible, certainly in the crowded diplomatic landscape of contemporary Africa, and should be resisted “even as the country aims toward a more comprehensive and cohesive policy approach.”
Moreover, the traditional bilateral Official Development Assistance (ODA) needs to be re-evaluated as other countries and other sources of development finance has grown in importance, such as remittances, foreign direct investment, influential “new philanthropists” like the Gates Foundation, and new aid providers from rising states of the Global South (e.g., China, Brazil, India, Turkey, etc.)
It important for Canada to systemically evaluate how it engages Africa because Africa is the next economic and political powerhouse. Africa’s youth population is currently estimated at 250 million, a staggering figure in terms of the potential for African economies and the potential talent pool that could be untapped. However, it also presents challenges for policies maker. This can be area Canada can lend its expertise when it comes to research, technology and providing the necessary training for educators.
The world is in a desperate need for leadership, but it can’t be leadership base on generalities and abstractions. There has to be real concrete policies and real initiative — If not Canada will continue to remain on the periphery when it comes to Africa.
