Despite the enlargement of the G8 to the G20, Europe remains its largest presence. In November France will host the G20 meeting, and so Europe will have the predominant influence on the agenda. While Africa is permanently on the agenda, the question is how we might best use that moment to do something for our neighbouring region that goes beyond gestures?

By November all European governments will grimly be cutting their fiscal deficits and thereby facing the anger of voters. As a result, there will be no scope for significant new financial commitments for Africa. Admittedly, since European electorates seem to have difficulty distinguishing between millions and billions, some token new spending initiative on a photogenic issue can be expected. But that will be it. In previous years Gordon Brown came up with a scheme, the International Financing Facility, which increased aid budgets through debt that did not appear as a government liability. But the days of such fiscal deceptions are gone, blown out of the water by the revelation of the analogous Greek scam to borrow off-budget, conjured up by Goldman-Sachs. The only serious initiatives with a chance of adoption will be those that come free. So what are they?

The policy with the most economic leverage is trade, but the grand attempts at trade deals are gridlocked. Globally, the Doha Round is stalled, and even if it were to be implemented it would do little for Africa. Similarly, at the European level, the impetus for the Economic Partnership Agreements passed with an abortive deadline, and many negotiations are now stuck at the Interim stage. But the gridlock of the grand schemes potentially opens the space for a trade deal that is both more modest and more focused.

Africa needs to diversify its economies beyond its prolonged dependence on agriculture and the extraction of natural resources. Its agricultural productivity has stagnated and is now threatened by climate change. Its resource extraction is dynamic but fraught with evident dangers. If Africa could break into manufacturing it would help to create the jobs that young Africans need. Since its domestic market for manufactures is tiny and fragmented by internal trade barriers, the pertinent market for African manufactures is global. But given the competition from established producers in Asia, breaking in is hard.

Quite apart from the conventional obstacles of infrastructure and governance, Africa faces a chicken-and-egg problem. Global manufacturing is characterised by powerful scale economies, predominantly accruing not at the level of a single factory, but at the level of a city. As a result, particular manufacturing tasks have become heavily concentrated. Most of the world’s buttons are produced in a single city that produces little else, as are most of the world’s zips. Clustering together firms lowers each other’s costs: for example, specialist maintenance services are readily available. This makes it very difficult for new clusters to get started. Even if an African button or zips cluster would be viable once fully established, the first firm to set up would face such high costs that it would go bankrupt. This is the core rationale for granting African manufactures temporary privileged access to global markets. It would help to pump-prime the formation of clusters.

There is nothing revolutionary about granting Africa privileged market access; both Europe and America do it through different schemes. But the very plethora of schemes is a problem. As always with trade policy, the devil is in the detail. The schemes differ not only according to which markets they offer access to, but in the small print of eligibility. One consequence is that some schemes have been much more effective than others: for garments, the American scheme, the Africa Growth and Opportunity Act, has been markedly more effective than the European scheme, Everything but Arms. But even the American scheme has been flawed by a time frame that is too short. Another consequence of multiple schemes has been complexity. An African-based firm wishing to export is faced by a maze of differing requirements for different potential markets.

The next G20 meeting is an opportunity to launch a common scheme, drawing on the best features of all the current schemes. Its coverage should extend across the entire OECD and, indeed, beyond. The G20 should be the forum in which the emerging market economies are encouraged to step up to the responsibilities that to date have been borne only by the developed countries. Per capita income in China is already above the world average; it should be encouraged to open its vast market to Africa.

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