On his recent visit to Africa, Jeremy Hunt called for ‘the world to see African nations as partners for investment and trade’. British investment and trade with Africa has been growing steadily over the last decade. Foreign direct investment doubled between 2005 and 2014 from £20.8 billion to £42.5 billion and trade between Britain and Africa rose by 7% in 2018 to hit £33 billion.
As policy uncertainty reigns in Westminster, we spoke to Her Majesty’s Trade Commissioner, Emma Wade-Smith OBE, about why Africa matters to the UK, the future of British-African trade, and how her team is supporting British businesses on the continent through this time of global instability.
The Prime Minister, Theresa May has set the ambitious target that the UK will be largest G7 investor in Africa by 2022. Why is Africa a trade policy priority for the UK and how can this promise be achieved?
Throughout the British Government, we have been looking at at how Africa matters across a wide range of issues from security through to prosperity. Africa matters to the UK’s national interest now and, when you project forward to the next 50 years and beyond, the value of that relationship only grows. From my perspective, looking at prosperity and how our commercial partnerships can drive sustainable, inclusive growth and job creation is key. We know that developing markets across Africa will also be beneficial for the UK’s economy, so it feels very much like a win-win situation.
Investment is a particularly important part of the story because of its wider impact. The UK is already one of the largest foreign investors in Africa and the largest foreign investor in the continent’s biggest economies such as South Africa, Egypt and Kenya. The focus for the British Government is building on the £45 billion investment stock that the UK has in Africa to drive the kind of growth that we think is valuable. Not only because economic growth is of value in and of itself, but also because we want to drive ethical, sustainable, inclusive and values-driven economic globally.
‘Africa matters to the UK’s national interest now.’
When you look at our approach to trade globally, the UK is clearly a global leader on open and competitive trade. We want to ensure that we work with African governments on supporting open, free and fair trade and avoiding the allure of protectionism.
Given your belief in competitive and free markets and the UK’s aspiration to be a global leader on these issues, which sectors are British companies particularly competitive in in Africa?
The Department for International Trade has just completed a piece of analysis on what market share UK companies have in different parts of Africa, in which sectors, and where there is untapped potential. The great news is UK companies are doing business across the continent in an ever-wider range of sectors. The mixed news is that in every area there is untapped potential. For me that translates into opportunity.
Historically, the UK has been strongest in oil and gas, mining and the related infrastructure and we have long-term investments and business relationships in those sectors. Nonetheless, there is British expertise across the board. As the growth of renewable energy continues, British companies are operating in that space as well as in water and food security and agri-tech. Not to mention financial services, which fundamentally underpin the growth and diversification that we want to see in Africa’s economies. As we think about how governments prepare for the inevitable demographic transition in Africa, the UK can also contribute skills in healthcare and education.
Of course, underpinning all of this we have a huge amount to offer in terms of technological innovation. Technology is transforming the way that we do business and the innovation coming out of the continent itself is particularly exciting. As governments, we must reflect on how we connect our entrepreneurs and our innovators in this space.