“Understanding the Emerging World Order (Part II)”

Opportunities for Sub-Saharan Africa and Mauritius in the New World Order

Europe

The negative consequences of Brexit have demonstrated the risks of leaving the European Union (EU). Economic disruptions, trade complications, and political fragmentation have served as a deterrent against similar moves by other far-right movements in Europe (Copsey and Pomorska 2021). Similarly, the “America First” policies under the Trump administration strained transatlantic relations, undermining trust in nationalist economic policies (Drezner 2019). As Churchill once noted, “democracy is the worst form of government except for all the others that have been tried” (Churchill 1947). In this context, the survival and strengthening of liberal democracy in Europe are critical to countering the growing threat of digital feudalism (Morozov 2011).

To maintain stability and economic competitiveness, Europe needs to secure diversified supply chains, particularly for energy and food security. The more nations engage in sustaining globalization, the greater the ability of liberal democracy to compete with digital feudalism, much like it once did with Soviet communism (Fukuyama 2022). Africa, along with Canada, Australia, New Zealand, India, and possibly China, is a natural partner in this effort.

Africa

Since gaining independence, Sub-Saharan Africa (SSA) has struggled with economic convergence. In the 1960s, SSA’s per capita GDP was nearly six times that of China, yet by 2010–2019, it had fallen to just 16% of China’s level, further decreasing to 14% by 2023 (World Bank 2023). While 45% of countries classified as Low-Income Developing Countries (LIDCs) in the 1960s have since advanced to upper-middle-income status, SSA remains dominant in the LIDC category, with 39 out of 54 nations still classified as such (IMF 2022). At an annual per capita income growth rate of 3%, SSA would take 24 years just to reach half of China’s 2015 per capita GDP (Rodrik 2016).

This stagnation has profound implications: economic underperformance drives social instability, migration crises, and geopolitical tensions, particularly affecting Europe (Collier 2013). Although some SSA nations — such as Botswana, Mauritius, and Seychelles — have achieved meaningful income convergence, others, including Burkina Faso, Mozambique, and Rwanda, remain far behind (AfDB 2021). Additionally, SSA’s population is projected to grow by one billion by 2050, potentially making it a global economic force or a source of mass instability (United Nations 2022).

Mauritius has the potential to emerge as Africa’s premier business hub, akin to Singapore and Dubai.

1. Call to Action

The shifting global economic landscape, particularly China’s rising labor costs and trade tensions with the West, presents an opportunity for SSA and Mauritius to attract industries relocating from China. Vietnam has emerged as the primary beneficiary of this shift, receiving $4.73 billion in Chinese investment in 2024 alone (Vietnam Briefing 2024). Mauritius, leveraging its business-friendly environment, can collaborate with SSA partners to secure a share of this investment and position itself as a regional hub akin to Singapore in Southeast Asia (Rodrik 2021; Mansoor 2020).

To capitalize on these opportunities, SSA must address several structural challenges:

• Urbanization: Properly managed urban growth can drive economic productivity and increased consumption (Henderson 2010; Mansoor and Williams 2018).
• Technological Change: Foreign Direct Investment (FDI) is critical to unlocking SSA’s economic growth potential (Aghion and Howitt 2009).
• Demographic Transition: By 2050, Africa’s labor force will reach 1.1 billion. Without investments in skills and industry, mass unemployment and social unrest could result (UNDP 2023).
• Infrastructure Development: Affordable housing, education, healthcare, transportation, and utilities are essential to supporting SSA’s growing population (Calderon and Serven 2010).

With the right economic and social policies, SSA’s demographic expansion could mirror Asia’s economic success. However, failure to act will heighten instability and migration pressures. International partners, including Europe and Japan, must collaborate with African nations to transform this potential into reality (Easterly 2002; Mansoor 2017).

1. Proposed Approach

Building on existing initiatives such as the G20 Compact with Africa and the World Bank’s Chief Economists of Government (CEoG) Initiative, SSA can achieve economic transformation through:

1. Knowledge Sharing: Learning from successful economies to build policy capacity and attract FDI (Hausmann, Hwang, and Rodrik 2007).
2. Lighthouses of Good Economic Governance: Establishing high-performance zones with best-in-class business environments to accelerate industrialization (Lin and Monga 2010; Mansoor 2022).
3. Utilization of the G20 Compact with Africa: Leveraging country teams to implement reforms with international support (IMF 2023).
4. Peer Learning and Pressure: Annual policy forums over five years to refine and implement reforms effectively (World Bank 2022).

Time is of the essence — failure to act swiftly may result in missed opportunities in the rapidly evolving global landscape.

1. Key Proposal: Demonstration Cities and Economic Governance Zones

SSA must establish Lighthouses of Good Economic Governance, which are large-scale economic zones designed to attract investment and serve as growth catalysts. These cities should:

• Offer world-class infrastructure and business environments.
• Act as industrial and trade hubs linking Africa to global supply chains.
• Demonstrate strong commitments to economic reforms and the rule of law.

Implementation Strategy

1. Institutional Development: Strengthening governance by fostering transparent, accountable institutions (Acemoglu and Robinson 2012).
2. Private Investment & Public-Private Partnerships: Attracting capital to develop world-class infrastructure and services (WEF 2019).
3. Strategic Partnerships: Collaborating with international financial institutions and high-income economies (OECD 2021).
4. Knowledge Exchange: Learning from successful economies like China, Dubai, Mauritius, and Singapore (Chang 2002).
5. Targeted Model Cities: Establishing pilot zones that generate spillover benefits across SSA (Collier 2018).

Expected Outcomes

Short-term:

• Consensus among governments, investors, and development partners on priority reforms.
• Strategic implementation plans for demonstration zones.

Long-term:

• Strong institutions fostering economic stability.
• Integration into global trade and supply chains.
• Sustainable infrastructure development supporting economic and social needs.
• Job creation for youth and disadvantaged groups, reducing social tensions and migration pressures.

By adopting this strategic approach, SSA can overcome economic stagnation, institutional weaknesses, and migration crises. Mauritius, in particular, has the potential to emerge as Africa’s premier business hub, akin to Singapore and Dubai. However, time is of the essence—failure to act swiftly may result in missed opportunities in the rapidly evolving global landscape.

About the Author

Ali Mansoor is the former Financial Secretary of the Government of Mauritius. He has also served as Lead Economist at the World Bank and Assistant Director at the

International Monetary Fund (IMF)

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