Hands across the ocean as Africa, Caribbean reunite
Mbongeni Mguni | Thursday July 4, 2024 11:17
At a time when the world is retreating from multilateralism and pushing back against globalisation, Africa and its Diaspora are mounting a historic attempt to forge closer economic, trade and cultural ties.
Separated by thousands of kilometres of the Atlantic Ocean and hundreds of years of the slave trade, as well as the dominance in both territories of more powerful trade and economic allies, Africa and the Caribbean are bucking the global trend.
The Caribbean, formed through the enslavement of about four million slaves starting from the 16th century, today has its strongest trade and economic ties with the adjacent United States, with many countries there using the American dollar and positioned towards imports and exports with the larger neighbour. By contrast, depending on where you are in Africa, most countries’ trade is positioned towards economic powers in Europe, the main states involved in the Scramble for Africa.
The result is that trade and economic policy, as well as infrastructure in the Caribbean and Africa, follows the former colonial routes established during and after the slave trade era.
Trade volumes, including tourism with the former colonial powers, for both the Caribbean and Africa, is easier and larger in volume than trade within the two “former peoples” a historical legacy that while well recognised, has been difficult to address.
Afreximbank, a 30-year old a pan-African multilateral financial institution mandated to finance, facilitate and promote intra and extra-African trade, has taken the lead in tackling the challenge.
The Bank, established under the auspices of the African Development Bank and funded by member states, recently brought together about 40 African and 12 Caribbean states in The Bahamas, to forge close economic and trade ties.
Under the Global Africa concept, endorsed by the African Union, Afreximbank has been making inroads in facilitating trade between African states and the Caribbean in the last three years, with more than 50 African investors, including billionaires, crossing the ocean to assess opportunities.
“Many of our countries, in trade, they are following the same routes from the colonialists and that’s why there’s less trade within Africa,” a delegate said at the recent meeting.
The numbers
The state of Afro-Caribbean trade reflects the separation the two regions have endured over the centuries. At the last count, the level of African exports to the Caribbean was about 0.001% of Africa’s total exports in 2021, while imports from the Caribbean were about 0.002% of Africa’s total imports.
Within Africa itself, the level of trade within countries, is low, but growing. According to Afreximbank’s Africa Trade Report launched during the Bahamas meeting, total African merchandise trade or exports and imports, reached $1.3 trillion in 2023, of which intra-African trade amounted to about $190 billion or just under 15%.
Trade infrastructure in Africa, as in the Caribbean, is geared towards colonial routes and former powers, as is trade policy, where, in the latter, both tariff and non-tariff barriers still exist.
One glaring example of this, is the fact that no direct flights exist at present between Africa and the Caribbean. In fact, Africans wishing to visit the Caribbean have to transit through Europe or more commonly, the United States, a journey that involves an inordinate amount of hours, stops and the troublesome and elusive visas.
“To come here, you need the visa from the US or the Schengen or the British, so we are being limited by other nations in our relationship,” a Nigerian delegate said.
The Bahamas does not have visas for most African countries, including Botswana, but the lack of a direct flight to the recent meeting meant Afreximbank had to charter a special flight from Ethiopian Airlines. The charter took off from Addis Ababa and had stops in Cairo and Lagos, turning the journey to reunite with long lost African kin, into a 22 hour affair.
The challenges around issues as well-known as direct flights and easing trade between the two regions, appeared to cause frustration to some delegates who have seen efforts fail over the years to find solutions.
In fact, former group CEO at pan-African bank, Ecobank, Arnold Ekpe, expressed his disappointment that within Africa in particular, travel is most complicated for African. This is despite political leaders being aware of the situation for decades since their liberation.
“It’s easier to travel in Africa as a European than as an African,” he said.
“Why have we not fixed that when we can fix it?
“The biggest challenge is at government level and the will to act.
“Things get done in Africa in spite of governments, than because of governments’ support.”
This might explain why despite the African Union recognising the Caribbean as the continent’s sixth region years ago, it is a smaller, more dynamic unit like Afreximbank that has taken the lead in reaching out to cement tangible ties over the oceans.
Perhaps unencumbered by the bureaucracy and political considerations that often weigh down maverick ideas on the continent, Afreximbank has made strides to reunite the two regions through trade and economic opportunities.
Beginning in 2021, empowered by the African Union’s recognition of the Caribbean as the “55th member state,” Afreximbank began making overtures across the Atlantic Ocean.
As explained by the Bank’s president and chairman, Benedict Oramah, Afreximbank partnered with the Caribbean Community (CARICOM) organisation to hold the first and second editions of the AfriCaribbean Trade and Investment Fora in 2022 and 2023, before establishing a regional office in Barbados last year.
The Bank is in the process of establishing the Africa Diaspora Centre in New York.
The idea for the Bank is to promote trade and economic ties between Africans and their descendants wherever they exist, a concept known as Global Africa.
The rationale
It is not by luck that the idea to reunite Africans everywhere picked up pace in the most recent years. Oramah says COVID-19 was a wake-up call for the continent to push for greater economic self-sustenance and ties with its descendants across the globe.
“History is replete with transformational ideas that come from major crises and COVID-19 was no different,” Oramah said.
“At the height of the COVID-19 crisis, the world was turned into a jungle where only the fittest could survive.
“Getting face masks, test kits and others was the function of the size of one’s order and depth of your pockets.
“African and Caribbean states stood no chance and the African Union saw the power of pulling 1.4 billion people rather than engaging the market as individual countries.”
Afreximbank provided advance procurement commitment guarantees of up to US$2 billion to vaccine manufacturers for member states, allowing countries to access life-saving medication. The facility was also opened up to the Caribbean states.
“CARICOM asked to join and we shared the little we had with them,” Oramah said.
“That was the beginning of the Global Africa concept.
“In 2021, our journey began when we visited Barbados and today eleven out of 15 CARICOM countries have joined the Afreximbank family.
“They have signed the partnership treaty which gives them the same rights and privileges as African countries.
“The global African bank is emerging today.”
According to the Afreximbank president, to date the organisation has $2.5 billion in “deals done, deals being done and those under consideration” in the Caribbean. The Bank has committed to investing $700 million in the Caribbean in various deals, mainly those in support of manufacturing, renewable energy, climate change resilience and others.
“What was thought impossible just three years ago is happening now.
“We need to get African capital to work for Africans.
“We also have to reverse engineer the way we invest our savings and stop investing them in places where these are not working for us.
“We should not be thinking those places are safe; when you lose money there, you say it is market turbulence but if it’s an African country, it’s corruption.”
Besides the impetus leant by COVID-19 to the ‘reunification” of Africa and her descendants, there are concrete economic reasons why the two regions are forging closer ties.
In The Bahamas meeting, delegates from both regions stressed the fact that no one is coming to industrialise Africans or “save them”. As the world moves away from globalisation, an opportunity exists to forge a new “South-South” economic power by leveraging on bountiful natural resources as well as shared history and ambition.
Africa has approximately one third of the critical metals seen as key to the green future, as well as vast opportunities for enough agricultural production to feed its population and export to the world. The Caribbean is the emerging global centre of renewable energy and the fight against carbon emissions.
Both regions have the world’s biggest youth demographic, with young, vibrant and creative populations eager to take on the challenges of economic development.
World-renowned economist, Jeffrey Sachs, was emphatic in the route ambitious regions such as the Afro-Caribbean have to take to navigate a fast-changing global geopolitical economy, where moves are being made towards a multi-polar world or one where there are more centres of power than just the West.
“Africa’s most important challenge is unity
“We are living in a world of big players like China, the United States, India and others.
“You cannot operate in that world as a small country and even small successful countries are part of someone’s world.
“Africa is too big to be part of someone’s world.”
The Bahamas prime minister, Philip Davis, was even more emphatic.
“The Caribbean and Africa must not just be included but must be at the forefront of shaping the contours of the global economy,” he told delegates.
“Let’s see a vision across the ocean. Let’s see an ocean of opportunity not a barrier.
“Will we allow the separation of water to get in our way or are our spirits stronger than the ocean?
“This is our moment and let’s seize it with both hands for the sake of ourselves and generations to come.”
But how?
Improving Afro-Caribbean trade and economic ties is no mean feat. Besides the lack of trade infrastructure, the regions have to navigate the establishment of institutions, policies and platforms such as a shared payments and settlements system as well as common free trade area.
The Pan-African Payments and Settlements System is only now gathering pace although not all central banks have signed up, while the African Continental Free Trade Area has moved beyond rules and into the actual trade envisioned by member states.
Rather than wait until these key platforms are established in Africa, the continent is inviting the Caribbean to partner in their development. In fact, the two regions are already discussing the establishment of their own sovereign credit ratings agency, a key institution as many countries in both areas have challenged the existing agencies’ assessments of their debt profiles.
“We face a global financial system that often locks us out, creating inequities perpetuated by G8 and G20 countries,” Davis said.
“These powerful nations frequently establish one set of rules for themselves and another for developing nations, undermining our progress and prosperity.
“It is imperative that we call out this behaviour and demand an inclusive, fair model for the global financial system.
“We need a financial system that protects and empowers us, rather than one that marginalises and exploits us – the current paradigm cannot continue unchallenged.”
Reuniting the lost peoples of Africa will require the buy-in of citizens on both sides of the Atlantic, a rediscovery of culture, tolerance and acceptance. Biases and stereotypes will have to be dismantled and the family of nations reformed again.
One sector leading the charge in this aspect involves the creatives, the legions of musicians and other performers who are household names in both regions, spreading shared culture and acceptance faster than the political leaders.
At The Bahamas meeting, brand names such as Wyclef Jean, Maphorisa, Flavour and others shared the stage to celebrate shared culture and underline the Global Africa concept. Separately, in panel discussions, celebrities such as Viola Davis and Boris Kodjoe spoke on how the creative sector in both continents is already making strides to build itself into a formidable global force.
While the politicians talk, the bankers, investors and creatives are making moves.
Separately, Afreximbank is also financing the establishment of an Afro-Caribbean market place in The Bahamas, where traders, creatives and others from both regions will showcase their products and services in pavilions. It is estimated that the market place will see annual values of $50 million emerging from the activities there.
“We are talking about African and Caribbean relations, so why not bring this permanent facility to facilitate that,” said Ginger Moxy, minister for Grand Bahama.
Enduring past
As they move closer, Africa and the Caribbean have motivations beyond swimming against the tide of de-globalisation to become a new economic super-power. One that hits close to home is something Oramah speaks passionately about: the need to reverse the 500 years of separation and colonial under-development.
“For years we never tried to get together or tried to find an opportunity to rediscover ourselves and reclaim our destiny to present to the world that one voice that becomes a powerful agent for change.
“We are reverse engineering the colonial strategy.
“The strategy followed the path of divide and rule, saying ‘you have to trade with us not yourselves, where therefore, we can control because they will never be strong enough and we can feed them grants and aid and make them believe the world will end without us’.
“We have to reverse engineer that strategy and in a few years, you will be shocked at the results.
“We will no longer be those people who wake up and go to the United Nations to say we need more development assistance.
“We will assist ourselves by coming together and this is a journey of self-reliance.”
As delegates climbed back on board the charter flight to Africa, a reignited spirit of belonging was sparked. A sense of having found long lost family was born. An opportunity to become the continent of the future, with its young, energetic population, was visible.
Time will tell whether “black is thicker than water,” but for now, the spark has been lit.