Emerging economies are making a rapid entry into Africa. The speed and significance of this entry means that they provide many opportunities for African economies; but, at the same time, their growing presence poses risks to Africa’s future growth.

The presence of emerging economies in Africa may promote both complementary win-win, and competitive win-lose outcomes. At the same time, some of the impacts of interaction may be direct and visible, reflected in bilateral relationships, whilst others may be indirect and less visible (for example, competition in third-country markets, or competition for scarce global resources).

The primary vectors of interaction between Africa and the emerging economies are aid, trade and foreign direct investment (FDI). In recent decades, northern economies have increasingly separated-out interactions in these three vectors – aid has been untied, and clearly distinguished from investment, and aid and investment have only loosely been associated with trade. The analysis of the links between Africa and seven key emerging economies - Brazil, China, India, Korea, Malaysia, Russia and Turkey - in this report suggest a different evolving experience. More often, there has been close strategic integration between these three vectors in the operations of these emerging economies in Africa.

The distinctive features of each of these emerging economy actors in Africa are described in the main report and in further detail in the Annexes. The direct and indirect impacts on, and challenges for a range of African stakeholders are outlined. It is clear from this that whilst some emerging economies have a strategy for Africa, Africa does not have a strategy towards the emerging economies.

In the interests of promoting this emerging strategy, and in ensuring the optimal outcome of deepening links between these emerging economies and African countries, a number of policy issues are outlined, with recommendations for key development actors. These recommendations are as follows:

African governments should:

• Monitor trade, aid and FDI interactions with emerging countries ;
• Analyse strategic objectives of emerging economies, and opportunities and threats arising from their entry;
• Develop strategic focus to maximise benefits – in the words of the Paris Declaration and the Accra Agenda for Action, to exercise “ownership” over these growing interactions ;
• Interact with other African governments, African Union (AU), African Development Bank (AfDB) and regional groupings to maximise bargaining power and avoid wars of incentives;

Within their specific mandates, the AU, the AfDB, NEPAD and African Regional Organisations such as COMESA, ECOWAS and SADC should:

• Provide support for individual African governments in the monitoring of trade, aid and FDI interactions with emerging countries ;
• Coordinate strategic analysis where action is appropriate at continental or regional level;
• Facilitate coordinated bargaining where this is appropriate to include the interests not just of commodity exporting economies, but also non-exporting economies.
• The AU, the AfDB and the ECA should establish dialogue which provides for a coordinated review of relations with the emerging economies, and where relevant (as in the forthcoming UN High Level Conference on South-South Cooperation), involve other relevant multilateral organisations in this dialogue;
• The ECA should provide assistance with the compilation of relevant statistics and through its flagship publication, The Economic Report on Africa, monitor the trajectory of aid, trade and FDI relations between Africa and the emerging country partners;
• A specific challenge arises for the AfDB in how to leverage emerging economy support for the financing and co-financing of regional infrastructure ;
• The Africa Partnership Forum should be widened to include participation by non-OECD emerging economies .

Multilateral organisations in the UN-family, the OECD/DAC, and the WTO should:

• Provide support for individual African governments in the monitoring of trade, aid and FDI interactions with emerging countries;
• Coordinate strategic analysis where action is appropriate at continental or regional level;
• Facilitate coordinated bargaining where this is appropriate;
• Help build capabilities in recipient countries to develop an adequate strategic response to relations with emerging economies;
• Provide support to the World Bank’s call for Sovereign Wealth Funds to invest in the development of Africa’s infrastructure.

Emerging country governments should:

• Recognise that flows of finance to Africa – both development aid and FDI – will entail future repayments, and that every effort should be made to avoid Africa entering a new realm and era of debt dependency;
• Recognise that their long-term access to Africa’s natural resources depends on developing a non-exploitative relationship which provides for win-win outcomes. Thus resource rents should be shared equitably and maximum efforts should be placed on developing downstream and upstream linkages from the resource sector;
• Complementary investments in infrastructure designed to facilitate access to Africa’s resources should also address the needs of the nonresource sectors of the economies, of promoting regional infrastructure and of also addressing the needs of countries with no, or poor resources;
• Market access should be provided for the preferential entry of African products into their markets. However, given poor production capabilities in Africa, complementary assistance is required to assist in the building of effective production capabilities, particularly in local firms and SMEs;
• Tolerance should be displayed when African governments seek special and differential tre atment in third-country markets;
• Every attempt should be made to include African firms and farms in their global value chains producing for global product markets ;
• In the absence of participating in the Accra Agenda for Action, attention should be given to addressing some of its principles, not least the objective of ensuring country ownership of aid-inflows and addressing the needs of transparency and legitimacy design to prevent corruption and the misuse of aid.