Multilateral collaboration

• Multilateral collaboration is essential to achieve peace and prosperity in a turbulent world.
• Many African nations are particularly vulnerable to the effects of a fragmented geopolitical environment, and a committed community of nations will be needed to help Africa advance in areas such as food security, sovereign debt and trade.
• Saudi Arabia is working with partner countries in Africa to help solve these challenges, sharing resources and expertise to address the difficult problems facing the continent.

As the world faces numerous geopolitical and economic challenges (including high inflation and interest rates, conflict, water and food insecurity), multilateral collaboration is indispensable to achieve peace and prosperity in a turbulent world.

In other words, we must build bridges instead of burning them if we want to achieve our common goals.

Many African nations are particularly vulnerable to the effects of a fragmented geopolitical environment, and a committed community of nations will be needed to help Africa move forward.

Promotion of food security through joint actions

In recent years, conflict and economic disruption have contributed to the disruption of food and fertilizer supply chain systems, leading to rising food prices and primarily (and secondly) affecting most serious) to the most vulnerable people and countries. Currently, more than 2 billion people are food insecure, according to the FAO. Food shortages have led 86 countries last year to restrict agricultural exports or trade, further exacerbating this growing hunger crisis.

Africa has a much higher proportion (20%) of hungry people compared to other regions of the world, and their numbers continue to rise. The impacts of food insecurity are costly and long-lasting in both human and economic terms.

It is imperative that we work together (through multilateral organizations and coordinated bilateral aid) to provide direct support to Africa and other vulnerable people and nations. We must also encourage a reduction in trade restrictions on the movement of grains and other food products, and manage dwindling global supplies of fertilizers, which are directly linked to food production.

Reduce Africa’s debt to unlock human and economic potential

Another urgent challenge is for African nations to drive economic growth. The continent is expected to add 12 million young people to the workforce annually in the coming decades, but is creating only 3 million formal paid jobs for them each year. Unfortunately, African economies are shrinking in per capita terms, depriving the continent of the benefits of its large, young and dynamic workforce.

African economic growth has been stifled, in part, by rising debt among African nations, leading to liquidity constraints amid limited fiscal space. The average debt ratio in sub-Saharan Africa has almost doubled in just a decade: from 30% of GDP at the end of 2013 to almost 60% at the end of 2022. More than half of the countries at risk of external debt distress are in Sub-Saharan Africa.

This makes it much more difficult for these nations to grow and achieve the Sustainable Development Goals. African nations will have to do their part by building capacity in debt management, mobilizing more domestic revenue and institutionalizing budget reforms while managing these changes with the help of international partners. However, they will need additional help from external partners to make lasting progress.

During our G20 presidency, Saudi Arabia led the creation of a historic global debt restructuring mechanism called the Common Framework, which facilitates discussions between all creditors: traditional and emerging official creditors, as well as private sector creditors. More importantly, the Common Framework provides a credible platform to reach consensus among all stakeholders on the debt treatment that should be provided to the countries most in need, on comparable and equal terms.

We need to institutionalize and improve the Common Framework so that it can quickly and efficiently reduce the overwhelming debt burden, which deprives us of the wealth of human potential of poor nations.

Encourage intra-African trade to promote growth

Meanwhile, trade restrictions have increased, particularly in Africa, preventing the movement of goods and services. This makes it even more difficult for low-income countries to overcome inflation and high interest rates to make progress in poverty reduction. We must strengthen a rules-based, equitable, sustainable and transparent multilateral trading system, with the World Trade Organization (WTO) at its centre, if we are to restore growth and job creation.

Borders between African countries are among the most restrictive in the world, hampering intra-African trade and investment. The African Continental Free Trade Agreement (AfCFTA) is an important path to breaking down these barriers, unlocking the continent’s economic potential by creating a continent-wide single market uniting 54 countries with a combined population of 1.3 billion and a GDP of 3.4 trillion dollars.

This could boost trade and investment, making the continent more attractive for trading partners to integrate Africa into regional and global value chains. It can also create millions of jobs for Africa’s growing population, especially women and youth. Additionally, the World Economic Forum and Saudi Arabia recently launched a new initiative to streamline and expand services trade between the Kingdom and Africa through regional integration, an area of ​​incredible untapped growth.

A rising tide lifts all boats

As one of the world’s largest multilateral and bilateral aid donors, Saudi Arabia supports Africa because we believe it is an investment in the future stability and growth of regional and global economies, which will benefit us all.

Addressing these challenges will not be easy, but their scope and potential impacts mean we must begin work immediately. Ultimately, we must work together (as partners) to build a more prosperous and sustainable future.

This article was originally obtained from the WEF.