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EU wants to keep its status as one of Africa’s largest trading partners

By Olivier Caslin

Posted on July 29, 2020 09:00

Contrary to popular belief, the EU remains Africa’s leading economic partner.

Although the pace of the partnership may not be to the same levels as that with Beijing; Brussels is still comfortably ahead in the race.

And that rhythm is maintained precisely to accelerate the pace and “reverse the narrative”, explains a European official on why the last two Commissions have attempted to fine-tune the financial instruments at their disposal in order to implement the Community’s external action policy.

57% of the EU, compared to 10% of China

In 2018, the EU made available more than 74 billion euros from all mechanisms and all countries combined, representing 57% of the total amount invested in cooperation, compared to just 10% from China. And yet very few know about this discrepancy.

So in an effort to bring about some coherence as requested by the “Committee of the Wise ” in December 2019, and to weave “this new partnership with Africa”, the Commission has taken up the proposal made in June 2018 to group its financial instruments for external cooperation into a single one.

If its principle were to be ratified during the current negotiations on the 2021-2027 Community budgets, this new Neighbourhood, Development Cooperation and International Cooperation Instrument (Ndici) would have a global envelope of €32bn for sub-Saharan Africa, plus 22 billion euros for the neighbourhood policy, which concerns the north of the continent. (see figure below).

TAR112_Africa’s biggest trading partner © EU: Africa’s biggest trading partner (The Africa Report)

Arm wrestling between the EIB and the EBRD

This possible reorganisation of funds has already rekindled the old institutional quarrel between the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) that some dream about of putting to rest with the creation of a “European super-development bank”, also suggested by the Wise ones.

The arrival of such a financial arm would make it possible to strengthen the external dimension of the ambitious European Investment Plan (EIP), adopted in 2017 by the Juncker Commission, which for the first time, places the private sector at the top of the agenda.

Community guarantee

In addition to helping improve the business climate in the partner countries, the EIP provides the community guarantee for projects supported by the development agencies of the various member countries and by the international financial institutions. With a start-up fund of €4.1bn as of this year, it should make it possible to mobilise up to €44bn.

Partnership of equals

October was meant to be the 6th EU-AU summit , intended to confirm a renewed partnership between Europe and Africa. Unfortunately, the COVID-19 crisis has disrupted the schedule, along with relations between Brussels and Addis-Ababa.

True to its agenda, the EU had planned to dedicate 2020 to its diplomatic, political, economic and cultural relations with Africa. The new Commission took office on 1 December 2019 and one week later, its German President, Ursula von der Leyen, visited Addis-Ababa to remind her counterpart in the AU Commission, Moussa Faki, how much “the African continent matters to the EU”.

On 13 March, Josep Borrell, Vice-President of the Commission and High Representative of the European Union for Foreign Affairs and Security Policy and the Commissioner for International Partnerships, Jutta Urpilainen, presented the new European strategy for Africa, intended to rejuvenate the previous strategy dating from 2007.

READ MORE ‘Africa wants a balanced partnership, and that is what we are offering’, Jutta Urpilainen

Just before this communication, some twenty Commissioners had made an unprecedented trip to the Ethiopian capital to enquire about African expectations and proposals. The negotiations promised to last throughout the summer before an agreement emerged in the autumn and a “new partnership of equals” was adopted in October at the 6th EU-AU summit in Brussels.

It was hoped the year would end on a high with the signing of the Africa-Caribbean-Pacific (ACP) agreements following more than 10 years of tough negotiations.

The deal was intended to follow on from the Cotonou agreement, signed in 2000 between the EU and 79 countries.

Then along came coronavirus

The COVID-19 crisis inevitably altered the European schedule thereby changing the priorities of both partners.

The epicentre of the health crisis in April, this post-Brexit EU had to deal with its own emergency situation, together with some of its internal principles of solidarity being called into question by certain Member States.

Planned meetings were cancelled one after another, and although the number of video-conferences increased, “discussions are not moving forward”, said one African negotiator, with noted regret. To the point where those at the headquarters of both the EU and the AU must have wondered, “is it really necessary to hold a summit that would have only symbolic value?”

For now, the subject remains taboo in Brussels, where they are still awaiting the African vision to provide content for “the general framework” unveiled in the Belgian capital in March. The Commission is not letting this go: its document has lost none of its relevance, and the five main aspects of its strategy:  Green transition; Digital transformation; Sustainable growth and Employment, peace and governance, migration and mobility – remain a priority on the continent.

The circumstances have stalled debate across Africa and reinforced the impression from the 2017 summit in Abidjan of a Europe disconnected from reality. It has also meant the EU has been unable to profit from the unique nature of its relations with the African continent. It has even been outdone by China, which – for a few weeks – appeared to rush to Africa’s aid while Brussels struggled to put together €15bn to meet the most urgent needs.

This ‘battle of narratives’ angered the High Representative/Vice-President Josep Borrell because it highlights the political limitations of the EU.

Quite rightly, Africa also intends to change its rhetoric and seems ready to take its partner at its word when it suggests moving away from its traditional donor-recipient relationship.

The African camp may not yet have presented its strategy, but it is making its arguments heard, like the creation of the African Continental Free Trade Area (AfCFTA), “which will give us the power to negotiate with all of the global partners”, believes the leadership of the AU.

READ MORE Reality check: Making Africa relevant must come from Africans

Tired of waiting for the balanced partnership that Europe has promised for years, Africa could be tempted to look elsewhere.

“The EU would then risk looking like a financial backer or a security operator”, fears one of its diplomats; an unthinkable outcome to Ursula von der Leyen who will have to persuade the Member States and the Community institution to grant her the means “to do more for Africa”. That is if Europe does not want to see someone else see do it in its place.

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