The UK wants to be Africa’s biggest investor, but there’s a lot of catching up to do. And don’t forget the elephant in the room – Brexit. Theresa May’s first visit to Africa earlier this year was a welcome reboot of relations. She visited South Africa, Nigeria and Kenya as the first British leader to visit sub-Saharan Africa in five years. The purpose of the trip was to reignite trade relations, and the Prime Minister set one clear goal: the UK should become Africa’s biggest foreign investor within four years – writes Zambian entrepreneur Zuneid Yousuf .
Africa is certainly open for business. As chairman of MBI Group, a privately-owned group of companies rooted in Zambia and active across three continents, I have witnessed first-hand the growth and development of the economies of Southern Africa. It is now far easier to do business in many regions across the continent, and African businesses represent an extremely attractive prospect for foreign direct investment.
However, in recent years the UK, EU and US investment has been significantly overshadowed by the tremendous growth of Chinese trade and investment flows. We have seen Chinese companies commit to Africa’s most impressive infrastructure projects, ranging from the construction of a high-speed rail networkconnecting Kenya’s capital Nairobi to the port-city of Mombasa, to the redevelopment and expansion of Zambia’s Kenneth Kaunda Airport. The statistics reflect this stunning growth. In 2017 alone, Chinese companies channelled $8.9bn into greenfield projects in Africa, while British companies committed just $2.3bn.
Global competition for economic relationships with African states is a sign of positive health. Of the ten fastest growing economies in the world, six are in Sub-Saharan Africa. The IMF forecasts that growth for the entire continent will pick up to 3.5 percent in 2018. While the challenges posed by population growth and climate change are clear, equally a quarter of the world’s consumers will be African by 2050 – a point acknowledged by the Prime Minister in South Africa.
The UK’s pivot to Africa makes sense given its departure from the European Union and its ambitions as a global trading power. The Prime Minister has announced that the UK will roll-over the EU’s existing Economic Partnership Agreement (EPA) with the five Southern African Customs Union (SACU) countries. This should be extended to all of Africa’s Regional Economic Communities, including the Southern African Development Community, of which Zambia is a member. This policy would ensure that Africa-UK trade flows will be maintained no matter the outcome of the Brexit negotiations.
The UK’s economic and diplomatic relations with African countries had diminished significantly in recent years, but new diplomatic initiatives – such as April’s Commonwealth Heads of Government Meeting in London – aimed to reboot relations by reaffirming strong historical ties for a new era of ‘Global Britain’. Just this week, the UK’s Trade Policy Minister George Hollingbery MP delivered a speech to representatives from the African, Caribbean and Pacific group of states (ACP) in Brussels, proclaiming that trade between the two countries can “boom” after Brexit.
International donors have invested more than millions in research funding to create “super crops” which are more nutritious and better resistant to disease with an improved ability to withstand severe flooding or drought. Neira’s Investments, a business specialising in the supply of fertiliser to the Zambian market under the umbrella of MBI Group, has seen the tangible benefits of such programmes in Southern Africa. It is businesses like those in MBI Group that will no doubt take such innovations to the market, and as its Chairman I look forward to working with scientists, entrepreneurs and policy makers to ensure such innovations support a prosperous and sustainable agricultural sector in Zambia.
The UK has also appointed a new Trade Envoy to Zambia, tasked with ensuring British businesses make the most of the trade and investment opportunities on offer. Mining, which is central to the Zambian economy (and another key sector for MBI Group) is an obvious area requiring further foreign direct investment. To increase productivity and deliver on growth potential, investment in technology and the exploration of new viable mining ventures is vital.
Brexit is often portrayed as a dispute between London and Brussels, but it does hold great significance for Europe and Africa’s political and economic relations more generally. The UK’s departure from the EU’ influential security, aid, trade and development apparatus means a range of different governments and businesses will have to take steps to adapt to the emerging reality. Carlos Lopes, the former Executive Secretary of the United Nations Economic Commission for Africa, this week wrote about the “untapped potential of EU-Africa trade”, arguing that the European Union, instead of “complaining” about China’s activities, should instead focus on deepening its engagement with the continent.
But Theresa May’s trip demonstrates how African economies are a vital component of the UK’s future trading relationship with the world after Brexit. Greater clarity on Britain’s role in Africa after Brexit, along with a sustained and substantial boost in trade and investment will ensure both parties gain mutual benefit for decades to come.
Zambian entrepreneur Zuneid Yousuf is Group Chairman and Director of MBI Group. Based in Zambia but with industrial interests across five continents, Zuneid is well placed to comment on the current issues facing the economic development of Southern Africa
Read more at eureporter.co