United Kingdom Pursuing Investment

At least, during the past few years, including the Covid-19 pandemic period, the United Kingdom has consistently followed its planned agenda with African countries. The UK has an agenda and decisively been implementing all aspects. It describes “Africa as a reliable partner” during its historic UK-Africa Investment Summit held in January 2020.

Monitoring developments after the summit, despite Covid-19 pandemic that has caused disruptions and lockdowns including in Africa, the United Kingdom has ultimately achieved some successes with Africa. With our broad and random research, we have noticed different priorities – all of which are supporting and strengthening economic partnerships in a number of countries on the continent. The significance of these is to help unlock opportunity, spread prosperity and thus transform lives in Africa.

Judging from our monitoring research indicates that while the visible practical steps aim at building a more resilient continent, it is simultaneously helping to lay the foundation for sustainable future relations. The United Kingdom has displayed, not only heightened interests but also practically delivering on its plans to engage Africa.

As the UK Minister for Africa, MP Vicky Ford, explained “the overarching aim of all this work is to try to help, build the resilience of countries and to help them have a much more durable prosperity. For far too long, African countries have endured the fallout from global forces outside their control and the compelling tasks is to build more sustainable economies in African countries.”

Take back nearly a decade and half ago, the 2008 Global Economic Crisis, Africa suffered contagion from what happened in the global financial markets. And the African businesses and African governments were left with holes in their balance sheets from plummeting commodity prices.

“And right now, since Putin’s war against Ukraine, we’ve seen the most dramatic rise in global food, fuel and fertilizer prices in recent history. The consequences of Russia’s illegal aggression are hitting the poorest the hardest, and many of those most exposed are in Africa,” she underscored this undeniable fact – the level of consequences and impact on Africa as a result of Russia’s “special military operation” in Ukraine since late February.

For the past few months this year, African countries have complained about imports of Russian grain or fertilizers. African leaders have understood that it is Russia’s illegal blockade that is preventing Ukrainian grain from leaving that country, and it’s that blockade that is hurting global supplies.

So time and time again, African countries find themselves buffeted by these global forces and therefore the United Kingdom has set a priority to help African countries to insulate themselves against these pressures. Under the current circumstances, what has Russia done to help Africa, it only contributes to deepening social dissatisfaction throughout Africa.

Over the past 12 months, we have calculated or tally, at least, 14 African countries visited by the UK Minister for Africa, MP Vicky Ford. In most of these African countries, the partnership agenda is, in practical terms, working. It, at the same time, shows a huge difference between rhetoric and what it takes to deliver all that are listed on agenda with Africa. From our monitoring we can simply say that the United Kingdom is capitalizing on many qualities that make the continent such an attractive destination for investment and for new business there.

On our part, we have discovered a number of positive impact from UK’s policy initiatives. For example, in Kenya in East Africa, British investment of £75 million, through TradeMark East Africa, has eased trade by improving the capacity and efficiency of the Kenyan Ports Authority.

Back 10 years ago, before this investment, it took 10 days on average for goods arriving at Mombasa Port to then leave the port. That turnaround time is now just three and a half days. More goods moving more quickly means that the costs of trade are dramatically reduced, helping trade from Kenya, but also helping those who are importing into this country.

British investors are strategically leveraging unto trade platforms, working to support the creation of an African Continental Free Trade Area (AfCFTA) because trade integration is such a powerful tool to accelerate economic growth, create employment and alleviate or reduce poverty.

The United Kingdom has already trained over 190 African trade negotiators. It is further working closely with the Secretariat to cut red tape on cross-border trade and in March 2022, Minister Vicky Ford and AfCFTA’s Executive Head Wamkele Mene in London announced a package of assistance to get the Agreement up and running.

Concretely, it was the launching of a pilot project or programme – Standards Partnership programme in Ghana and Rwanda. This programme will strengthen supply chains, reduce barriers to trade by helping both countries meet global standards and regulations.

Then, there’s British International Investment (BII) – the UK’s Development Finance Institution – this continues to be a core part of the economic partnership, offering honest, reliable alternative to financing, to other forms of financing that may come with more strings attached.

Under the G7 presidency, BII pledged to work with its G7 counterparts and multilateral development banks to ramp up the volume of investment into the African private sector – with a collective target of a massive US$80 billion available till the year 2027.

BII will target 30% of all new investments into green projects in developing countries over the next 5 years. This will make it one of the world’s largest climate finance providers to African economies.

In Senegal, there is a noticeable transformative impact of the recent BII partnership to expand Dakar’s port infrastructure. This will be Senegal’s largest ever onshore foreign direct investment and will help to drive free trade and to drive economic growth.

In Tanzania, there is also what is referred to as AgDevCo, a UK-funded agribusiness investor. It has transformed ‘Africado’ into a thriving business. They are currently exporting avocados including to many British supermarkets. In doing this, it is boosting the livelihood of some 2,000 local smallholders.

Women’s entrepreneurship is a special priority to promote women’s empowerment and support their roles in society. Nigeria, located in West Africa, there are positive results as a result of the impact of £70 million invested in women entrepreneurs and their small businesses.

Our systematic monitoring further shows that the Malindi Solar in Kenya, the East Africa’s largest solar plant, built by the UK firm Globeleq using £32 million of BII financing. It’s is the sort of green investment British partners need to transition into renewable energy and help them to reduce their exposure to the increasingly unpredictable hydrocarbon markets.

All of these examples proved that development finance is a win-win for African countries and for those who conduct business there. The development finance is not enough, though. But these are very impressive and modest by the range of impactful projects export credit agency, UKEF, has supported across the continent.

UKEF’s very flexible financing rules recognize the global nature of modern supply chains. This flexibility has played a significant role in encouraging oversea buyers to source from UK businesses, whilst also building capacity and creating jobs within developing countries. British companies who use UKEF find these development benefits offer a major competitive advantage when bidding for contracts compared to some of the other external competitors.

Referencing back in January, the launched Growth Gateway, this is a new business support service to expand trade between the UK and Africa. So far, the Growth Gateway has connected more than 150 African and UK businesses. The Foreign, Commonwealth & Development Office has expressed readiness to build on this workable economic diplomacy with Africa.

The UK will be collaborating with a newly launched IFC facility to develop more local currency bonds and supporting its Financial Sector Deepening Platform (FSDA) in expanding to 45 African countries. It is forming regulatory partnerships, such as the Mauritius Africa Fintech Festival and the Bank of England’s partnership with Morocco’s Bank Al-Maghrib.

Our research shows that 112 African companies listed on the London Stock Exchange (LSE) are worth more than £125 billion. Trade UK-Africa trade is approximately £48 billion. It sets a target of mobilizing more sustainable finance, which would include 600 British companies across the continent by CDC Group.

Summarizing, all these recounted in this arcticle demonstrates the United Kingdom’s achievements and further its practical commitment to partner with African countries in order to drive growth, trade and investment opportunities all across the continent. African leaders and Governments, the private sector operators are continously embracing these efforts. Creating resilient future through sustainable economic growth is at the heart of the United Kingdom.