African Markets Conference: Leaders call for SSA to drive global economic reset as US steps back

Source: Standard Bank/X. Goolam Ballim, Chief Economist and Head of Research at Standard Bank Group.

Ballim was speaking this week at the African Markets Conference - a landmark three-day event held in Cape Town which brought together global and African investors, policymakers, and business leaders to explore strategies for mobilising capital flows to meet Africa's structural needs and drive sustainable growth.

In his keynote address, Ballim reflected on the hypothesis of a Great Reset, which envisions a fundamental overhaul of global economic systems. He put forward that SSA - which has for a long time been a bridge between the developed and developing worlds - may find itself at the heart of this new global dialogue, laying the foundation for a more inclusive and balanced international system.

Such an accord, Ballim says, may be the critical push needed to rethink and reshape international relationships, trade agreements, and political alliances.

"There can be no doubt that President Trump is up-ending the world and the norms and standards which we've been used to for the last 70 years. There can be little doubt too that he is withdrawing US centrality - the global multilateralism that has been so significant - and the guardrails of society," Ballim said.

"He is injecting an entirely new policy paradigm both internally with respect to the United States and of course externally in terms of international affairs."

Shifting global economic order

Ballim explained how the last 75 years can be divided into three distinct epochs: an era of prosperity, a period of contention marked by stagflation and deregulation, and a final phase of globalisation before the onset of Covid-19. He explained how the current period marks a shift away from globalisation, with potential negative implications for sub-Saharan African (SSA), especially in terms of trade and economic integration.

"We're seemingly in a push towards deregulation now. We've seen this movie before, even if it's not quite the same. There have been rapid changes in world governance since the post-World War II era, and I envision a significant shift that could define the future of the global economic order."

Ballim emphasised that, with South Africa playing a pivotal role in hosting the G20 Summit this year, the country finds itself at a historic crossroads:

"I think the world needs a new accord, an accord vastly different from that which prevailed over the last 80 years, much in the same vein of the aftermath of the Second World War wherein which the focus was the reconstruction of Europe, with the subsequent formation of the World Trade Organisation and the World Health Organization. These allowed for an increase in guardrails imposed on society to calibrate the rules-based world with which we're now familiar.

"The proposed consensus—potentially emerging in November—could be the first step in recalibrating the relationship between the Global North and the Global South. This accord would foster a mutually beneficial embrace, one that a month ago seemed inconceivable. Notably, this reset excludes the United States—not by choice, but by sheer necessity," he said.

Global shifts redefined

The Great Reset, Ballim noted, needs to be counterbalanced against the backdrop of a US economy that continues to show resilience, particularly in terms of production. "America's prevailing level of economic heft, combined with a spirited growth rate for such a large economy, means its contribution to global economic output remains substantial."

America is still a credible market - one to be respected, he said.

Global trade, he assessed, will continue to grow this year by 3.3%.

"Additionally, seven of the world's 10 fastest-growing trade corridors exclude the United States. This suggests that trade connectivity is expanding, even as the global economy bifurcates between the United States and the rest of the world. Even Europe—traditionally a representative of the Global North—is now embracing the Global South in ways that position it as an adversary of the United States. Who would have thought?"

Ballim stressed the importance of external trade and financial flows, namely investment, diaspora money, loans, and aid to SSA’s growth. "As SSA's economy relies heavily on global trade, the current geopolitical and economic tensions present both risks and opportunities for the region, depending on how it navigates these external relations and harnesses global shifts."

Tech, polarisation, transformation

He predicted that emerging technologies like Artificial Intelligence (AI) and quantum computing will become the next driving forces of global economic growth. These technologies may leave countries without access to these innovations, such as those in SSA, at a significant disadvantage.

He made this prediction against a warning that this period will be marked by increased economic polarisation - with the rich becoming wealthier while the poor struggle - a legacy of the K Economy which arose post the Covid-19 pandemic.

"This division is amplified by leaders who use populism and charisma to exploit societal anger, which could impact SSA's growth if not addressed," he said.

While Ballim championed the idea of sub-Saharan Africa taking the lead in global economic recalibration at the G20 Summit in Johannesburg this November, the region’s long-term economic stability will depend on its ability to navigate an increasingly complex and uncertain landscape.

"We've argued for a length of time that economic activity is shifting from the West to the East, but it's not that simple. We cling to this notion but it will not be a straight line," Ballim said.

"Ultimately, the growth of sub-Saharan Africa will hinge on its capacity to adapt to global shifts, harness technology, and manage evolving financial and trade relationships in a fragmented world."