Today’s UK-Africa Investment Summit represents a positive concrete step in the UK’s evolving stance towards the continent. For a long time, it has seemed as if Africa was ‘DFID’s job’ within the British government, and the continent received little attention from politicians or business. But times are changing. The level of recent Chinese investment on the continent has led to what has been labelled a ‘new scramble for Africa’, as the biggest economies compete for early mover advantage in the world’s largest untapped market. Today’s London summit is also one of the first significant initiatives to be rolled out by the government as part of the post-Brexit ‘Global Britain’ agenda.
With investors and businesses from the UK and Africa together in one room, as well as over 20 African heads of state, there is strong appetite on both sides to build a new relationship, one based on trade rather than aid. President Akufo-Addo of Ghana declared a vision in 2017 for ‘Africa Beyond Aid’ – a vision that will require increasing levels of private sector investment to create the jobs and the public revenues needed for self-reliance.
Crown Agents’ mission is to help our partner countries achieve self-sufficiency and prosperity. We work around the world, with a particular focus on sub-Saharan Africa. Through technical assistance and building more effective government capability, our work enables the trade and investment flows crucial for economic growth and poverty reduction, strong public institutions and the delivery of essential services. From our experience, we’d argue that the UK government can play a valuable role if it focuses on supporting the enabling environment for investment in three ways.
Eliminating non-tariff barriers to trade
Even in a world of rising protectionism, it is primarily the cost of getting goods across borders due to poor transport infrastructure and logistics, mismatched national standards, and inefficient customs processes that make products uncompetitive and markets unattractive. Improving customs procedures not only makes a market more accessible to business, it also generates public revenues for reinvestment. Our work with the National Customs Service in Angola, which included developing the legislative framework, strengthening competency-based recruitment and streamlining customs procedures, led to a 16-fold increase in customs revenues in ten years.
Plugging the investment support gap
Help for investors to identify business opportunities and partners is simply not available from private sector providers in many African countries. In markets rich with opportunity, but admittedly less predictable than Europe or the US, investors require help from the UK government’s in-country apparatus to get started. Crown Agents scoped the potential for additional UK government support in this space, consulting with a wide variety of UK and developing country businesses to inform programme design for a suite of new programming in 2020. In undertaking this work, we were able to draw on our deep knowledge of many of Africa’s fastest-growing countries that comes from our long history of partnership with their governments.
Ensuring the benefit is mutual
The UK consumer stands to gain significantly through greater competition and choice if African exporters can find a way to get their goods to our market. Improving market access support for developing country firms looking to the UK will create jobs through business growth. It’s an obvious win-win. Crown Agents has been training SMEs in 11 developing income countries since 2017, helping them to navigate international trade processes to export their goods, grow their businesses, and build thriving economies. Making sure trade and investment flows go both ways is good business.
The concrete proof of the Investment Summit’s impact will come in hard numbers: UK businesses investing in Africa for the first time, growth in foreign direct investment, and African exporters accessing UK market entry services. For the ‘Global Britain’ narrative to have real credibility, the UK government needs those numbers to shift, as do all of us who want to see a step change in UK-Africa relations with genuinely transformative economic and social impact. After today’s summit is over, it’s going to take some serious work in the margins to enable that dial-moving investment to happen.