With the Western-led order at a crossroads, Africa is emerging as a pivotal player in the Global South, crafting its own economic and diplomatic path in a multipolar world. Nations across the continent are driving global economic growth and shaping the future by deepening trade and investment relationships with the rest of the world, leveraging abundant resources, dynamic workforces, and expanding markets. 

In the report "In a Multipolar World, the Global South Finds Its Moment," Boston Consulting Group (BCG) explores how Africa, along with other Global South nations, is rising to prominence. It highlights the continent's strategic importance in securing global supply chains, fostering young and expanding workforces, and developing growing consumer markets. Africa's pragmatic approach to climate action, balancing sustainability with growth, further underscores its role in shaping the future. 

BCG's report provides insights into how African business leaders can position for the future by investing in supply-chain resilience, building geopolitical muscle, developing localised strategies, and embracing sustainability as a growth lever. The report emphasises the shifting dynamics of world trade towards the Global South, noting significant projections for economies like India, Brazil, and Indonesia (Nigeria, Morocco, South Africa??). 

The Global South is increasingly asserting its agency, moving beyond traditional roles to become crucial ‘swing players’ in a fractured world. They represent the future of global growth, having critical resources, youthful populations, and expanding consumer markets. 

While accounting for around 18% of global GDP today, Global South economies are projected to grow at an average of 4.2% annually through 2029, driving most of the global growth. This rise in trade dominance is projected to grow at 4.4% CAGR over the next five years, with Global South trade estimated at $14 trillion by 2033.  

Highlighting the significant trade and investment shifts, Badr Choufari, Managing Director and Partner at BCG in Casablanca, commented, “A decade ago, the US and EU were dominant trading partners with Africa. However, today, China has become the top partner for many African nations with trade between the Global South and China projected to grow faster than North-South trade, China is set to become the leading investor in many economies.” 

This is supported with the Global South surpassing advanced economies in attracting foreign direct investment in 2023 ($525 billion vs. $464 billion). 

Emerging trade dynamics 

Given the changing environment, African nations are moving towards value-driven trade by processing resources domestically, rather than just exporting raw materials. This strategic shift is positioning them as essential backbones in global value chains as companies seek diversified manufacturing locations. 

This is further enhanced by the utilisation of economic and geopolitical leverage with Global South nations pursuing strategic investments and technology acquisition through sophisticated balancing acts between major powers. Platforms like BRICS+ (which includes South Africa, Ethiopia and Egypt on the African continent) facilitate this multi-aligned approach. 

All of which is offset by Global South nations having to balance growth needs with sustainability, and the pursuit of gradual energy transitions. Many have vast natural carbon sinks, offering potential for nature-based climate solutions and economic opportunities. 

The changing playing field 

The new era of US trade policy is expected to significantly impact African trade. Rising US tariffs could reduce the competitiveness of African goods and disrupt global supply chains, affecting exports and potentially leading to job losses. The US's shift towards bilateral deals and the uncertain future of the African Growth and Opportunity Act (AGOA) add to the challenges. 

South Africa is particularly vulnerable in this shifting trade environment. Trade with the US makes up about 13% of South Africa's exports. The non-renewal of AGOA could end the duty-free status for 25% of these exports, potentially reducing them by $397 million. The US tariff threat risks up to 2% of South Africa's GDP, affecting key sectors. 

Trudi Makhaya, Partner at BCG in Johannesburg says that South African business leaders should focus on swift action. Companies need to mobilise an internal Tariff Impact Command Centre to map immediate actions, whilst working to support fact-based advocacy on US-SA trade relations, refine go-to-market strategies, deepen technical trade capabilities, and reconfigure supply chains. 

"Addressing these challenges head-on is crucial for African nations to navigate the complexities of the emergent trade order and to ensure sustainable economic growth,” added Trudi. 

Despite progress, many African countries continue to grapple with infrastructural deficits and governance challenges, which are critical to overcome for sustained growth. Additionally, maintaining stable trade amidst rising economic nationalism and high borrowing costs necessitates delicate diplomacy and strategic positioning. By tackling these issues head-on, African nations can pave the way for a more prosperous and stable future. 

Embracing the new global reality 

As the multilateral trade order fragments, Africa and other Global South nations are collectively emerging as a new driving force destined to redefine global dynamics on their own terms. By promoting economic growth, building stable trade relationships, maintaining geopolitical balance, and demonstrating pragmatic environmental stewardship, they are creating unprecedented opportunities for governments and businesses alike. 

Those who recognise this shift early and actively engage will not just quickly adapt to the new global reality but help define it.