Africa missing in action at G20 Summit

The recent G20 summit in London was held under the worst Economic crisis ever faced in the last 60 years, with African nations having little say. It was an opportunity for leading nations to revise an economic recovery plan ,but the summit went further in confirming a new world order in Global finance. The era of total domination by London and New York in world finance is now a clear thing of the past. New powers set to be heard and claim their place in Global stage with China leading the charge for the total reform of the International Monetary Fund.

Africa predictably missing in action when it came to re-divide the global voice in how the world’s Financial system and resources are being managed. The reason is very clear Africa remains dependent on Commodities whose prices are set elsewhere. And once the revenue from these commodities fail to meet national requirements many nations have been forced to rely on Aid. Those nations which have made rapid economic progress have been able to stand up on the Global stage and demand that the IMF and its sister organizations be reformed taking into account the new reality that the Anglo American era of financial domination is slowly passing.

Even other western nations such as Germany and France were keen to see some reform of some sort that would limit the influence of the Anglo-American combination which many are blaming for the current Economic crisis. The crisis presented a new front for settling old scores and resentments.

The once famous " old Washington consensus," a description for the policy prescription of open borders, floating exchange rates and fiscal prudence long favored by the World Bank and the International Monetary Fund has been declared officially inadequate to handle today’s Global Financial challenges .


The reform of the International Monetary Fund (IMF) - the world's bank of last resort - which has 185 members is critical. Countries go to it when they have tried everything and are facing bankruptcy. This means the IMF is currently overstretched by the need to bail out so many economies at the same time.

This is what created the opportunity for the Asian nations led by China, India and Japan. IMF like most other Financial institutions requires additional capital to recapitalize it to face current and future challenges. Africa’s position remained as before where the continent could not forcefully push for any meaningful reforms due to lack of financial clout which the Asians had.

There is a clear lesson in this for Africa. Who could have imagined 20 years ago the world could seriously talk of a G 2 and not a G20. The G 2 being the group of 2 made up of the USA and China? China has made such serious progress over the last 20 years that it has accumulated enough reserves and financial clout such that even the USA now relies on China to buy its debt to finance American budget deficits. This proves that progress can be made in a space of less than 20 years and within that generation a nation can rise to be a financial super power.

This hasn’t happened by accident by careful planning over many years and disciplined political leadership. China has been able to use its export earnings to build huge reserves .



China, India and Japan were among the key nations to demand reforms to the International Monetary Fund (IMF) and other institutions to better match economic and political realities. These are direct benefit’s the economic success of China and its other Asian partners.


The reason for the shift in influence lies in the fact that Asian economies account for nearly a quarter of all the world's exports, and they have trillions of dollars in foreign reserves. Africa with huge reserves of natural resources has no valid excuse to keep under-performing when it comes to create wealth and accumulate some meaningful reserves.


Asia’s economic success has given it enough clout and reason to aggressively push for IMF reforms. IMF power structure has been a reflection of the world order of the past 60 years. While the United States has a veto, Europe has 32 per cent of the voting power and China has just 3.9 per cent. This is bound to be changed as the Asian nations foot much of the new US$ 850 billion bill to re-capitalize the IMF.

The Asian example is a clear motivating factor for a region like Africa. Value addition to exports has been Asia’s key strategy over the last 30 years. Africa needs to export more value added products and reduce exports of raw materials .

Gilbert Muponda is CEO and Founder of GMRI Capital. He can be reached at gilbert@gilbertmuponda.com