Bilateral Trade: United Kingdom and Africa
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The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Maude of Horsham) (Con)
My Lords, this has been an excellent debate. It gives me great personal pleasure to congratulate the noble Lord, Lord Oates, on a terrific maiden speech—if I can say so from all the veteran status of having been here six months longer than he has. It was charming, humorous, thoughtful and serious. He and I cohabited in the Cabinet Office for the past five years, both physically and politically, and it was always a pleasure working with him. We were very rarely in conflict with each other, despite the occasional tensions of coalition; we were more often in unity to try to get stuff done, which, as we both know, was often the challenge in a system that did not always relish change. It is a great pleasure to see him here, and I thank him for his terrific contribution to this important debate.
I also congratulate my noble friend Lord Sheikh on having sought and achieved this debate; it is incredibly important. He and others made the point that, although there are enormous attractions in increasing our business in China and India, the big growing markets, we should not let that detract from the importance of Africa. There is no one better qualified in this House, with his background in business and his African heritage, to have introduced this debate, as he did in an incredibly knowledgeable and serious way—unless, of course, it might be my noble friend Lord Popat, who also spoke with great knowledge and thoughtfulness on this important subject.
First, I praise the work of a number of noble Lords who have taken on pro bono—unpaid—the work of representing British businesses abroad as the Prime Minister’s trade envoys. We already have my noble friend Lord Risby and the noble and learned Baroness, Lady Scotland, who courteously told me that she had to leave for an important engagement—at Marlborough House, I think she said. I cannot think what that is related to, but we wish her very well in her quest to be the next Secretary-General of the Commonwealth. The noble Lord, Lord Hollick, was here earlier. All of them have done amazing work in Africa: my noble friend Lord Risby in Algeria, the noble and learned Baroness, Lady Scotland, in South Africa, and the noble Lord, Lord Hollick, in Kenya and Tanzania.
There are of course enormous opportunities. My noble friend Lord Sheikh talked about Ethiopia, as did the noble Lord, Lord Oates. It is astonishing: it is the ninth fastest growing economy in the world; it is the second most populous country in Africa; its GDP has increased fivefold since 2000—just in the past 15 years. It is of course just one of many countries in Africa which are replete with opportunity. The scope of opportunities across the continent is wide and varied. In Algeria, as my noble friend Lord Risby said, there are opportunities right across the board in infrastructure, healthcare, education, agriculture, retail and the defence and security sectors. Algeria now has domestic reserves of nearly $160 billion, and it continues to press ahead with its impressive development plan, in which it will be spending $262 billion, so it is replete with opportunity.
My view is that, over the next 25 to 30 years, it is very likely that most of Africa will take off and light up. There will be a huge amount of growth. The truth is that we do not and cannot know precisely in which parts and when that will happen. Given that our resources in terms of government support for trade are necessarily limited, we need to be prepared to support development wherever it is. We must accept, as the noble Lord, Lord Mendelsohn, did, in his typically thoughtful and constructive contribution, that we need to be prepared for the long term, and not be left behind, not to look opportunistic, late to the fair, when opportunities open up. We need to have built the relationships beforehand.
One of the ways we will do that is by appointing more trade envoys to cover much more of Africa. Envoys are a really good way to build long-term relationships with continuity and longevity. Last week, during the visit of President Sisi of Egypt, I was delighted to announce that Jeffrey Donaldson, a Member of the other place, has agreed to become the trade envoy for Egypt.
How do we do that? We need to mobilise the whole of government. As I said in my maiden speech in this House, it struck me when I took on this role that too much of the burden of supporting business and exports from government was falling on UKTI alone. That cannot be right: we need to mobilise the whole of government behind that effort. Abroad, in our posts overseas, the substantial network of the Foreign Office and the Department for International Development is, rightly, increasingly being used to support British businesses in Africa under the joint Africa framework.
UKTI, DfID and the FCO work together as one to push for improvements to the business environment, which are beneficial in themselves to promote development in those markets, and to bring opportunities to the attention of business. This is relevant to the point made by the noble Earl, Lord Sandwich, in his important contribution. It is important to stress that there is no conflict between the role of DfID in promoting home-grown, private sector-led growth in those less well developed countries, with a relentless focus on reducing poverty, and our broader aim of increasing trade and investment in countries that we support with unprecedentedly generous levels of development aid. I am grateful to the right reverend Prelate the Bishop of Southwark for his generous acknowledgement of the scale of that aid. The Conservative Party was committed in its manifesto in 2010 to be the most significant country to meet its UN commitment to spend 0.7% of GDP on aid, and the coalition Government implemented it, at a time of great financial stringency, as he will recall. We should also accept that that brings a great deal of good will in its train.
There is much we can do: lobbying in Ghana for greater transparency in the oil and gas sector; in Mauritius, helping to influence the Government to lift a travel ban; and enabling Nigerian students to come to Middlesex University. This is just the start of what we can achieve on behalf of British businesses. DfID’s support to help the east African skills base has helped to make the oil and gas projects there more competitive in what is a highly competitive world market for hydrocarbons.
As several noble Lords said, the key to economic success is to have stable and secure markets, which is why the whole-of-government approach to supporting our businesses makes such sense. African markets can access a number of UKTI programmes which can help. The High Value Opportunities programme, which several noble Lords mentioned, provides industry-specialist support to help root out opportunity overseas and communicate market entry routes. I stress that it is available to SMEs, as well as big businesses. It is very important that when we support businesses to bid for those opportunities, we do whatever we can to encourage them to bring supply chain from the UK in their train. That is an important part of building our exports.
UKTI’s aid-funded business team works closely with agencies such as the World Bank and the ADB to make sure that British businesses know about and can access the opportunities from the programmes which emerge from those bodies. A recent mission to Uganda and Tanzania focused on that.
My noble friend Lord Sheikh and others asked about ministerial support for outward and inward trade missions. We should do more of this. Trade envoys can play a very important part, especially in those markets which, in the nature of things, will not receive many ministerial visits. However, it should not just be Ministers such as myself. Sector Ministers and FCO geographic Ministers should be taking business delegations with them, and there is no reason why Ministers in DfID, when they visit countries that we are supporting, should not do so. We should be doing more of that, with more focused support. I want to ensure that, as we reconfigure the headquarters of UKTI, we strengthen the support for all that outward activity.
Much is being done and much more can and should be done. UK Export Finance plays an important role here. It offers some degree of cover in most countries across Africa, but we need to do more to raise awareness of what is on offer. We do not always do enough on that.
Trade policy is important to open up opportunities. I shall attend the World Trade Organization meeting in Nairobi in December. We hope to conclude the Doha development round. We are not optimistic that there will be a huge breakthrough, but we acknowledge the concerns raised by the noble Lord, Lord Chidgey. Much more can be done. The noble Lord, Lord Alton, referred to the involvement of China. We can work alongside China on some of those opportunities. I do not wholly sign up to everything that China has done in Africa but there are lessons for us there for the future.
On the Commonwealth, again I wish the noble and learned Baroness, Lady Scotland, well in her endeavour to be the next Secretary-General. We underestimate the strength of the Commonwealth as a network for business. With the advantages we have in this country of the language and time zone we should make more of it.
On visas, we take the points made by my noble friend Lord Sheikh very seriously. There will always be a tension there but we need to make this work better to increase the ease of travel in the ways to which he referred.
Finally, at the beginning of this week we launched our Exporting is GREAT campaign, which encourages particularly SMEs to get stuck in to export. It is not as difficult as they are sometimes made to feel and we can give them much more support, not just from government but by developing interesting, innovative and practical programmes of support to enable them to get over those hurdles. I am grateful to all noble Lords for the seriousness with which they approached this important debate. We will take on board the concerns, ideas and suggestions made.