By Zinhle Zikalala
The 38th African Union (AU) Summit, concluded over the weekend in Addis Ababa, Ethiopia, and was a historic moment for Africa’s economic transformation and global trade relations. With the theme “Justice for Africans and People of African Descent Through Reparations”, the Summit not only addressed past injustices but also shaped Africa’s future as a global investment hub, trade powerhouse, and financial sovereign entity.
This year’s Summit was a turning point for Africa’s economic agenda, peace and security initiatives, and efforts to reassert its place in the global economy. Leaders from all 55 AU member states, alongside international investors, financial institutions, and trade partners, discussed policies that will expand intra-African trade, attract foreign direct investment (FDI), and strengthen Africa’s global competitiveness.
A Rising Economic Powerhouse
Africa is no longer just a continent rich in resources — it is a continent rich in opportunity. With a combined GDP exceeding $3.1 trillion and a consumer market expected to reach 1.7 billion people by 2030, Africa is one of the fastest-growing economic regions in the world.
Several key initiatives dominated discussions:
- The African Continental Free Trade Area (AfCFTA) – Already the largest free trade agreement in the world by number of participating countries, AfCFTA aims to increase intra-African trade by 52% by 2030, reduce trade barriers, and create a single African market.
- Africa Virtual Investment Platform (AVIP) – Launched in partnership with the Organisation for Economic Co-operation and Development (OECD), AVIP will provide real-time data and investment insights, making Africa’s markets more transparent and attractive to global investors.
- African Credit Rating Agency (ACRA) – With Western credit rating agencies often undervaluing African economies, costing the continent an estimated $75 billion in lost investment annually, the AU is proposing an independent, Africa-led credit rating system to fairly assess risk and drive investment.
South Africa: The Gateway to African Investment
A key leadership change and win for South Africa at this year’s AU Summit wasa the appointment of Ms. Lerato Mataboge as the new Commissioner for Infrastructure and Energy. With extensive experience in trade, investment, and economic development, Ms. Mataboge is expected to drive Africa’s infrastructure and energy agenda forward. Her vision aligns with Africa’s ambition to modernise infrastructure and transition to sustainable energy solutions, fostering a competitive and resilient African economy.
South Africa, as Africa’s most industrialised and diversified economy, continues to position itself as a leader in investment and innovation. The country remains a top destination for FDI, with inflows reaching $10.7 billion in 2023, according to the United Nations Conference on Trade and Development (UNCTAD).
Key factors that make South Africa an attractive investment hub include:
- World-Class Infrastructure – South Africa boasts some of the best financial institutions, roads, ports, and telecommunications networks on the continent.
- Strategic Trade Agreements – As a member of AfCFTA, BRICS, and the Southern African Development Community (SADC), South Africa serves as a gateway for businesses looking to invest and expand into Africa.
- Green Energy and Innovation Hub – With a commitment to net-zero emissions by 2050, South Africa is becoming a leader in renewable energy and sustainable development, attracting investment in green hydrogen, solar, and wind energy projects.
Read more about South Africa’s investment opportunities here
Building Africa’s Financial Independence
A major priority at the Summit was the push for financial sovereignty. Currently, African countries pay higher interest rates on loans than other regions due to perceived risks by Western financial institutions. The African Union’s proposal for a continental financial institution aims to change this by:
- Reducing reliance on Western financial institutions and establishing a Pan-African Development Bank to provide fair lending rates.
- Developing Africa’s own payment and settlement system to reduce dependency on the U.S. dollar and allow African countries to trade in local currencies.
- Strengthening intra-African trade financing, ensuring African businesses have access to capital without external constraints.
Addressing Security for Economic Growth
Peace and security remain top priorities for the AU, as stability is crucial for economic growth. President Cyril Ramaphosa has during his State of the Nation address that “While South Africa has contributed to the SADC mission in the DRC, we have always maintained that an inclusive negotiated resolution is required to achieving lasting peace in the region.” This highlights South Africa’s stance that economic development cannot happen without lasting peace. This year, one of the key peace missions of the African Union will focus on:
- The Crisis in the Eastern Democratic Republic of Congo (DRC) – Over 7 million people displaced, with 14 South African soldiers killed in recent clashes with M23 rebels. The AU is leading diplomatic efforts to mediate a peace agreement.
- Sudan’s Ongoing Conflict – A humanitarian crisis with over 9,000 deaths and 8 million displaced people. The AU Peace and Security Council is pushing for a ceasefire and humanitarian intervention.
- Countering Extremism in the Sahel Region – Terrorist groups continue to threaten Mali, Burkina Faso, and Niger, affecting trade and development. The AU is working with ECOWAS and the United Nations to strengthen military and diplomatic responses.
Agenda 2063: Africa’s Role in the Global Economy
The global economic landscape is shifting, and Africa is positioning itself as a key player. With China, the U.S., and the EU competing for stronger economic ties with the continent, the AU is leveraging this interest to negotiate better trade deals, attract strategic investments, and ensure Africa benefits from its own resources.
This long-term vision focuses on economic growth, social development, and environmental sustainability, with infrastructure and energy as key pillars. Agenda 2063 seeks to ensure robust energy systems, improved infrastructure, and enhanced regional integration, all essential for Africa’s industrialisation and development.
At the Summit, discussions were centred around:
Tech and digital transformation, with Africa’s tech industry growing at an annual rate of 12%, led by innovation hubs in Kenya, Nigeria, and South Africa, particularly in fintech and digital solutions.
Manufacturing and industrialisation will also take priority, as Africa strives to double its manufacturing GDP from $500 billion to $1 trillion by 2030, aiming to reduce reliance on raw material exports and establish robust regional value chains.
Additionally, sustainable development and climate action was be high on the agenda, with African leaders advocating for climate finance, carbon credit markets, and sustainable energy investments, recognising that while Africa contributes the least to global pollution, it suffers disproportionately from climate change impacts.
The 38th AU Summit was a milestone in Africa’s journey toward economic independence, trade expansion, and global influence. With new financial systems, trade agreements, and investment frameworks, Africa is no longer waiting for the world—it is shaping its own future.
