Lord Popat
To ask His Majesty’s Government what steps they are taking to (1) raise awareness among United Kingdom businesses of commercial opportunities in African markets, and (2) support United Kingdom exports to Africa.
Lord Popat (Con)
My Lords, I declare my recent interest, having served as the Prime Minister’s trade envoy to Uganda, Rwanda and the DRC until the election. I am glad to have secured this debate.
Despite some progress, there is still a long way to go to change the narrative on Africa. Our exports to Africa were more than 30% not long ago; today, they are less than 3%. We need to see Africa not as a charity but as a place of opportunity. Politicians and diplomats believe in soft power and diplomacy; coming from a business background, I believe in hard cash.
Despite what some may say, the UK has much to offer the world in many countries, particularly in Africa, as a key trading partner. We still face a significant challenge with our balance of trade. In 2023, our trade deficit was £33 billion—a trend that has persisted for the past four decades. This means we do not have enough exports to pay for imports. The Prime Minister’s long-term goal must be to fix the UK’s current account deficit.
We need access to foreign markets, particularly in Africa. Several car manufacturers have already left the UK due to significant challenges in sourcing batteries, which are critical to electric vehicle production. The uncertainty in supply chains has made the UK less competitive. The shortage of essential materials such as cobalt, much of which come from the DRC, has further strained the UK’s car manufacturers. If we do not secure reliable supply chains for these materials, we will see a further exodus in the car industry. The UK missed the boat in the first wave of electric battery revolution, so we now need to catch up. India, the US, China and Russia all have regular African summits to work on how they can embrace the opportunities that exist. It is a great shame that the last African summit had to be cancelled; I hope that the new Government will put it back on the agenda.
When I first joined the House of Lords, I set up a committee to see what we could do to help our SMEs to export more. Given the vital role that SMEs play in our economy, it is crucial that we support their growth and global expansion efforts. SMEs accounted for 61% of UK employment in 2022, yet only 10% of them export, compared to 30% for the Germans. History teaches us that, if we neglect our own industries, we are at the mercy of global rivals. I welcome the export champions scheme and the King’s award for exports—I declare my interest as somebody who was on the judging panel—and, most importantly, I welcome the UK Export Finance business plan for the next five years, which gives priority to supporting SMEs. Access to finance equals access to growth.
As someone who was born in Africa, I must admit a bias, but I firmly believe that, post Brexit, building stronger trade and diplomatic ties with Africa should be Britain’s top priority in terms of securing our nation’s prosperity. By establishing a programme of trade envoys in 2016—I am glad that many ex-envoys are speaking here today—we recognised the need to restore our old trading relationship and forge new ones. The UK must build on its historic ties, particularly with Commonwealth countries in Africa. We need action on the ground. “Global Britain” is a powerful concept, but it must be more than a slogan; it requires meaningful engagement with emerging markets. The trade envoy programme was a valuable initiative that opened doors for UK companies to export and invest more: we were the marketeers and sales-people for UK plc.
As a former trade envoy to Uganda, Rwanda and the DRC, I want to share some personal experiences to illustrate the impact of the trade envoy programme. I took the Arsenal football team to Rwanda—despite being a Tottenham supporter—and that was worth £30 million a year. The Rwandan Government have doubled their tourism. We supported the sale of two Airbus aircraft to RwandAir with finance from UK Export Finance, and flights now operate seven days a week between our two great countries—London to Kigali. We used to fly to most African cities. British Airways has stopped flying to places such as Entebbe, Dar es Salaam, Lusaka, Blantyre and Freetown. We need to engage with them and build bridges with those African cities.
In January this year, I spearheaded the first ever UK-Rwanda business forum in Kigali, which brought together over 900 delegates from more than 40 countries. We are in discussions about a major development project in Rwanda to build accommodation for 11,000 students and a 600-bed hospital, financed by UK Export Finance.
In Uganda, we are nearing the completion of an international airport worth £280 million—a contract given to a British company. We have facilitated the sale of two Airbus aircraft to the Ugandan Government, and we will soon see direct flights between London and Entebbe. The Gridworks project—which I saw yesterday—in partnership with BII is worth more than £1 billion over the next five years.
The DRC is a country that not many of us talk about in government, but it has enormous potential and can become the beating heart of Africa. It is one of the wealthiest countries globally in terms of natural resources, with $30 trillion-worth of minerals, including 70% of the world’s cobalt. Other nations such as China, India and the US, and the EU, have already signed deals with the DRC, while we are still working on a memorandum of understanding. We must expedite this process; I urge the Minister to look into this as a matter of urgency.
In April, I led a large trade delegation of 26 companies to the DRC, resulting in significant agreements. The DRC Government signed three agreements with UK companies, including a £142 million deal with Westminster Group for airport security and a $215 million agricultural public/private partnership. Global Gases Group also signed a $100 million MoU to invest in medical oxygen and LPG.
I have been working with UK Export Finance to encourage it to review its approach to the DRC, noting the clear demand for its services. In the meantime, I have supported a private investor, Gemcorp, in making up to £500 million available for projects in the DRC. I am glad that its Finance Minister was here in this very building to sign that deal. The Congolese have a clear will and are anxious to work with the UK. The President has been here three times in the past six years, which shows how anxious they are to work and trade with us.
Africa is changing, and I hope we can wake up to what Africa is today. We need to move away from thinking we know best and feeling we need to step in to help. We do not want Africa to be on the menu; we would rather see it at the table with us. When Africa prospers, we prosper.
To conclude, I want to share a story. Three young men started a business delivering parcels door to door in an old Plymouth Duster with unmatched doors. They were Adrian Dalsey, Larry Hillblom and Robert Lynn. Those surnames made a company called DHL. Fast forward 55 years, DHL now has 250 proprietary planes, 32,000 vehicles, 550,000 employees and a presence in almost every country on the earth. Its revenue for 2019 was a whopping €65 billion. The moral of the story is: never give up; we can make it happen. I urge the Minister to make it happen and to show the political will to trade and invest in Africa.
Lord Bruce of Bennachie (LD)
My Lords, we should all be grateful to the noble Lord, Lord Popat, for initiating this timely debate. He indicated the opportunities but also the shortcomings that have preceded it. UK trade with Africa, like aid, has fallen sharply in recent years. It was 4% of UK trade in 2012-13 and fell to under 3% in 2022. In the last full year, trade was £10.3 billion, which was actually a reduction of 7.1% on the previous year, so things have been moving in the wrong direction.
I will make a link with the fact that aid has been drastically cut. I appreciate that we are focusing on trade, but the two are linked, because the relationships grow together. The cut in aid has had a very disruptive effect on our relationships with Africa. I am glad the previous Government started to restore the balance and I hope the new Government will follow that through and help us to cement new relationships. The cancellation of the UK investment summit was disappointing, particularly at a time when the World Bank was making a very big engagement with Africa.
The House of Lords International Relations and Defence Committee, of which I am currently a member, produced a report on Africa in 2020, which said:
“Successive governments have said that Africa should be given a higher priority across Whitehall, but have failed to make this a reality in the face of competing demands”.
The incoming Government have made a similar pledge, but how will it be different this time? It would be good to hear from the Minister.
There is a growing call from indebted countries for debt relief, which is related, because that would release funds that could be invested in the infrastructure that makes the business climate more conducive and more favourable. Can the Minister say anything about the Government’s intentions to negotiate debt relief, given that the UK underpins a substantial proportion of private investment to developing countries?
BII is investing in Africa, and I have noted recent announcements relating to the deep-water ports in Banana in the DRC, small business finance in Nigeria and sustainable energy generally. These are all worth while and are designed to open the way for more trade, but they are pretty small compared with the scale that will be required.
An interesting report from Malaria No More made the point that tackling malaria will have an economic benefit. One of the problems with Africa is that not only do countries there sometimes not have the skills but too many people are sick too often to be able to be productive workers, so tackling illness and disease and promoting good health is good economic policy as well.
Nevertheless, as the noble Lord, Lord Popat, has highlighted, not enough UK businesses seem to be interested enough in investing in Africa. Nobody denies that it is a challenging place to invest, but that is not a reason for moving out. For example, Africa has a huge need for pharmaceuticals. The UK is a major producer of pharmaceuticals. Why are we not investing more to help Africa, in partnership, produce pharmaceuticals and create a skills base for its own environment?
While our relationships were being disrupted, Russia and China moved in in a big way. They offer substantial sums of money with no questions asked, subvert democracy, sustain dictatorships and deal with minerals for their own benefit, while we stand back, relatively speaking, and do not engage.
This is a moment where we have to reset and not just talk the talk but walk the walk. I go right back to Tony Blair’s Africa commission, which produced a wonderful and inspiring report, but we still have not delivered on its vision. I hope the new Government recognise that trade, investment and diplomacy can go together, and when they do everybody will be better off.
Lord Risby (Con)
My Lords, I congratulate my noble friend Lord Popat on securing this timely debate. He spoke in a way that reflected his experience and passion.
Even though there is much more to be done, I greatly welcome the real focus in the past few years on driving forward our trade activity abroad. The importance of Africa commercially in this has indeed been recognised, particularly by other countries, I would add, even by one of our European neighbours, Germany. We also learned during Covid the importance of critical minerals and the need to expand supply sources. Africa can play a huge part in this.
However, I will refer to the developing countries trading scheme, which was announced in 2023 and is, regrettably, so unknown. It is worth noting its breadth of ambition. DCTS cuts tariffs, removing and simplifying trade conditions for 65 developing countries. As I have heard many times from our African friends, access to markets abroad can be cumbersome. Would the Minister look into how well DCTS is working in practice and consider whether it warrants modification?
What has been very helpful is the way that access to information about British goods and services has hugely improved. Information generally, or in specific commercial areas, is all online, with quick responses and advice. Additionally, access to UK export finance is now comprehensively available for purchasing British goods and services, either in this country or abroad. I hope this will continue and indeed expand.
I pay tribute to our embassies and high commissions in Africa for facilitating all of this so well. However, the number of individuals devoted to trade promotion in our embassies and the budget allocated is frankly anaemic compared to that of our competitors. I applaud the links established relatively recently between the Ministry of Defence and the Department for Business and Trade. Over the years, our sale of military equipment has not been seen sufficiently through a commercial prism. In practice, military sales can underpin bilateral relationships to the overall benefit of our industry and commerce. I am so pleased about the reappointment of my noble friend Lord Lancaster, who has done so much in this sphere and who should be strongly supported.
It has been my immense pleasure to be the Prime Minister’s trade envoy in Algeria, the largest country in Africa and one with which we have an excellent relationship. One of the challenges all over Africa is the rapidly growing population. Algeria, like many other countries, has suffered a youth brain drain in the past. But a dramatic change is under way: with our encouragement, President Tebboune has led a radical reform process to attract investment, promote foreign trade and move away from dependency on hydrocarbons. Now growing rapidly, a new generation of Algerians is staying and opening up the deployment of technology, starting new projects and drawing foreign investment. That of course includes many British household name companies.
I was the governor of the Westminster Foundation for Democracy for nine years. It was a privilege each summer to get to know Africa and its vast potential. To conclude, I hope that the voluntary role of the Prime Minister’s trade envoys will continue. At minimum, it offers a high level of continuity and commitment as we open up new business and investment relationships in the astonishing African continent.
Lord Swire (Con)
My Lords, I add my thanks and congratulations to the noble Lord, Lord Popat, on initiating this timely debate. It is early days for this Government, but we have been told that they are coming up with a plan for Africa, and that is something we will look out for closely. It was disappointing that we had to cancel the trade and investment summit before the general election was announced. I hope this new Government will reinstate that as soon as is practicable.
I will divide my limited remarks between two things: the politics and the economics of Africa, addressing the issue of how British SMEs and others can take advantage of the African market. We have inevitably had much discussion already about China and Russia. The noble Lord, Lord Popat, is right: Africa is changing, and so are the Chinese in the way they are handling it. They have seen the results of the indebtedness they have created. The tax rises in Kenya, which resulted in riots over the summer, were in large part a response to the £8 billion-worth of Chinese loans that the country is obliged to repay.
President Xi, at his recent summit in Beijing last week, has now pledged £50 billion in new funding for African nations. That is on top of China’s existing £182 billion of loans to the continent. The Chinese are beginning to do Africa differently: they are talking much more about soft power and educational and military exchanges. We should be aware of that.
There is also the Wagner Group. Since Yevgeny Prigozhin died, it has become an arm of the Russian state, and it continues to be a destabilising factor in Libya, where it is propping up Field Marshal Khalifa Haftar, and in other countries such as the Central African Republic, Mali, Sudan, Mozambique, Chad and Burkina Faso. Those are the two large powers we are dealing with.
So how should the UK address its relationship with Africa, and how can we push our companies to do trade there? I declare my interest in the register as the deputy chairman of the Commonwealth Enterprise and Investment Council. It would be good if the Government could announce who the Commonwealth Minister will be; perhaps they have already, but I have not noticed if so.
We have ramped up our efforts in Africa big time. We now have offices in Ghana, Nigeria, Kenya and Cameroon. There are 21 Commonwealth countries in Africa, with a combined GDP of more than $1 trillion and a combined population of around 650 million people—that is about 40% of Africa’s entire population —so Commonwealth Africa presents a real opportunity and an open market for British businesses. The Commonwealth’s next Secretary-General—some of us are going out to Samoa next month—will be African. There are three African candidates, meaning that the SG will take an increased interest in the continent. What a wonderful opportunity for the UK to get on the front foot.
I highlight one opportunity for British companies in Africa. One of our key supporters in Kenya, under the inspired leadership of James Mwangi, is the Equity Bank. It has come up with an astonishing Africa recovery and resilience plan, which would industrialise the whole of east Africa and other parts. It addresses everything from climate change to education and infrastructure, with plenty of opportunities for British companies to take advantage of it. I would be happy to pledge to make it available to the Government because it is, I think, something that could do amazing things for our British companies.
Baroness Hoey (Non-Afl)
My Lords, I add my congratulations to the noble Lord, Lord Popat, on his determination over some time to get this debate, as well as on his support for Africa and his obvious love of it. I personally thank him for his support when I became a trade envoy to Ghana nearly three years ago. His understanding of that role was crucial and his words about how it might be continued by the next Government—that is, the current Government—were important.
Ghana’s position makes it the gateway to west Africa. Having the African Continental Free Trade Area in Accra has made it a hugely important country. Of course, we have a large Ghanaian diaspora in this country. We need to remember that the diasporas of all the Commonwealth countries in this country are an important source of information, which we want in order to ensure that our trade continues.
I just want to highlight one thing. I was in Ghana when it was announced that the Africa investment conference was not going to happen. It was an extreme disappointment; indeed, there was anger among many businesses that had worked hard and were really looking forward to it because it had been so successful. I hope that the Labour Government will continue with it.
I have a question for the Minister. Are there any reasons why, in terms of future trading, we are not considering increasing our interaction and focus on trade with Somaliland? Although it regrettably remains internationally an unrecognised state by African standards, it has a stable political system and an impressive economic performance. It is part of the volatile region surrounding it, clearly, but it has had a functioning democracy since its self-declared independence in 1991, and it has held multiple peace elections. If we are serious about rewarding and supporting democratic governance and the rule of law in Africa through trade partnerships, Somaliland should be able to attract British business and investors—with support from His Majesty’s Government, of course. The UK has historical ties to Somaliland, too, as it was once a British protectorate.
I am concerned—a noble Lord said that many businesses are perhaps slightly concerned about investing in Africa. I make the point that absolutely crucial to everything happening in Africa is the whole question of justice and the rule of law. We cannot ignore that when we are talking about trade and development. As we have seen in so many countries—obviously, I refer to my interest in Zimbabwe—once the rule of law breaks down, it makes such a difference if businesses and individuals cannot rely on the courts and the law to support them as they grow. That really does make a difference in terms of whether they want to invest, and we have seen that in Zimbabwe.
As a country, we have to be more careful when we look at aid. Sometimes there has been too comfortable and cosy a relationship between UK development professionals and the tyrants—perhaps sometimes unknown to them as tyrants—who use British aid and trade as a means for entrenching their kleptocracy. For example, I do not understand why Crossrail International and Transport for London have announced that they are going to work and invest to improve railway connectivity in Zimbabwe and southern Africa.
We have to stop treating Africa in patronising way which sometimes implies that it warrants different rules and standards from the rest of the world. We have to get rid of the colonial guilt which so often leads to continued support for neocorrupt regions and to aid not getting to the needy but being siphoned off by the already rich. We should get away from the idea that Africa depends on our generosity to put our hands ever deeper into our pockets and to continue to do the same old things. Africa is a strong, vibrant region and, with our support, we can see not just our trade and investment to Africa increase but Africa investing in the United Kingdom.
Lord Hannan of Kingsclere (Con)
My Lords, I declare my interest as the president of the Institute for Free Trade. I will begin where the noble Baroness, Lady Hoey, finished. We need to see Africa as an opportunity rather than an obligation. There is often a perception lag in international affairs. If someone is my sort of age, they will have grown up with images of Africa on the news—always either a civil war or an appeal. On some deep level, we think of children with swollen bellies and flies crawling across them.
Africa’s growth rate this century has outstripped almost every other continent, and the figures that we heard from the noble Lord, Lord Bruce, and my noble friend Lord Popat are all the more extraordinary when we think of the two-way links between this country and that vast and beautiful continent. I cannot be the only person who has experience of wandering around Lagos, bumping into someone and starting to chat, and their saying, “I’m from Peckham”, or, in Accra, “I’m from Stratford”. A lot of people are moving both ways, and that should create exactly the channels for commerce that a wise country exploits.
When I was Accra, I visited the headquarters of the African Continental Free Trade Area, to which the noble Baroness, Lady Hoey, referred. It is a small, young organisation and there is an awful lot for it to do, but there was an unequivocal belief in the power of commerce and the dismantling of barriers as an instrument of poverty alleviation and social justice which you do not hear in Washington or Brussels, and certainly not in Beijing. The question is: do we still believe in those things here, in the country of Adam Smith, David Ricardo, Cobden and Bright? Do we still believe in these opportunities?
I put this in the form of one specific question, which I have raised before in the Chamber and will put to the Minister. It is the question of Moroccan tomatoes. It may seem trivial, but for precisely that reason it stands for a great deal of our attitudes. To give a bit of context, this country imports 80% of its tomatoes and our single biggest supplier is the Kingdom of Morocco. When we left the European Union, we inherited a tariff and quota regime that had been designed to protect largely Spanish but also, to a degree, Italian, Portuguese and French tomato growers from international competition.
Even from a protectionist point of view, whom do we think we are protecting in this country? Yes, we have a short tomato season; the Isle of Wight used to be in my constituency when I was a Euro MP. It runs roughly from June to September and even then, we still have to import. The Moroccan growing season runs from October to April, so even from the most dunderheaded Trumpy or Corbynite protectionist point of view, whom do we imagine we are protecting from those crimson globes coming from north Africa?
I had this argument many times as a former member of the Board of Trade, and on more than one occasion with my noble friend Lord Benyon when he was the Minister. I admit that we would sometimes prearrange it: I would say, “Do you mind if I ask you about Morocco?” He would say, “Yes, please do, because I want to get it in Hansard. My officials keep telling me that they’re on the point of removing this ridiculous measure. Why are we imposing tariffs and quotas when we had a shortage of tomatoes in this country last year?” So the little play would be acted out: I would say, “Will my noble friend confirm that we are doing this?”, and he would say, “Yes, and I reassure my noble friend that I’ve got the assurance of officials that it will happen”. As of this morning, when I checked, those quotas and tariffs are still in place.
I have a very high regard for the new Business and Trade Minister. I am sure I will say disobliging things about some of his Cabinet colleagues over the next few years but, so far, Jonathan Reynolds has not put a foot wrong in what he has done on the Swiss trade agreement and on the CPTPP, or in what he has said about trade more widely. As a test case, will the Minister please see whether we can repeal this utterly self-defeating measure, not as a favour to our friends in Morocco but as a favour to ourselves that will incidentally also help the great continent of Africa?
Lord Mancroft (Con)
My Lords, following that great tour de force, your Lordships can safely go back to sleep again. I join other noble Lords in congratulating my noble friend Lord Popat on and thanking him for securing this important debate and introducing it so comprehensively. No one is more qualified to lead our discussion than him. I record my admiration for his outstanding work in his role as a trade envoy.
I declare my interest as director of a company that works in Africa, particularly in Uganda. I have therefore seen at first hand the respect with which my noble friend is held in the Government in Entebbe. From the President down, it is almost impossible to meet any Minister or anyone of influence in the business community who does not know my noble friend. More than that, he is ferocious at promoting UK businesses to gain access to whomever they need in Uganda, with charm and determination. He is now doing the same thing in Rwanda, where there is a great appetite to do business with UK companies, and he is doing his best to help open up the DRC to UK businesses. I recognise, having worked in the DRC some years ago, both the vast potential, as my noble friend said, and the difficulties of working in that country. Let us all hope that situation continues to improve.
I hope the Minister will be able to clarify the Government’s position on trade envoys, which all noble Lords have mentioned. I believe I am right in saying that the post was invented by the previous Government, and they have been a great success. I hope the Minister will be able to confirm that the new Government will continue them and that they will not make the mistake of reappointing trade envoys on a party-political basis. Trade envoys are not political, and we want the best man or woman for the job, regardless of political affiliation.
Some 70% of the population of Africa is below 25 years of age, so it is a growing market. In just 40 years, it will become home to more people than India and China combined. Some 24 countries in Africa are anglophone, and around 16 have common law legal systems. Having run a business in China for 10 years, I cannot emphasise enough to your Lordships how important this is. In China, where the courts do not really work—and, if they do, no European company can access them—legal agreements are simply not enforceable and are, frankly, not worth the paper they are written on. In African countries, where the law is loosely based on English law, it is a different matter. A lawyer in Kampala can speak on the telephone to a lawyer here in the UK to discuss the detail of a legal agreement, speaking not only in English but in the same legal language. For UK businesses, the advantages of language and legal systems are significant, and we should do all we can to advertise them because this is not widely recognised.
Although we are always told that we should hang our heads in shame as a former colonial power, my experience is that British business is welcome and encouraged throughout Africa. It is almost impossible to know which opportunities are best. Infrastructure is one, of course: across Africa, they need roads, hospitals, schools and houses. Financial services have huge potential and there is much need for UK banks and insurance. There is a growing market for virtually every sort of retail product noble Lords could imagine—and, of course, sport. The UK Premier League has more fans in Africa than in the UK.
I am delighted to say that the various embassies and high commissions throughout Africa have, as my noble friend Lord Risby said, become much more commercially focused and give first class advice to people trying to enter those markets. That is not well known in the UK, and the Government would do well to make more of this, both marketing it—telling people about it—and encouraging it. Can the Minister confirm that the Government will repeat the Africa investment summit, which virtually every noble Lord mentioned? It was such a success, and everybody regrets so much the one that was cancelled.
In closing, I make a final, slightly more controversial, point. The previous Government supported the trophy hunting Bill, which was in both parties’ manifestos at the election. I realise that our elected colleagues lose all sense of reason when animal issues come up, but Governments need to be a bit more adult. The ban on trophy hunting is, apart from anything else, a measure restricting trade from six of the most important southern African countries. It makes no economic difference to us but it implies criticism of friends and allies in Africa of the sort that the noble Baroness, Lady Hoey, mentioned: people who have taken deep offence at the high-handed way in which colleagues here in the UK have addressed this matter in both Houses. Poor behaviour like this has caused and is causing a serious rift between people and Governments who are friends and with whom we should be developing stronger commercial links, not insulting them in a way that borders on racist. I hope that the Minister will take that back to colleagues.
Baroness Northover (LD)
My Lords, I thank the noble Lord, Lord Popat, for securing this debate. I was the trade envoy to Angola and Zambia from 2016 to 2020 and worked alongside him; he was extremely helpful to me. Like others, I emphasise that the trade envoy system is very worth while. Can the Minister confirm—he is nodding—that it will continue, as the noble Lord, Lord Popat, the noble Baroness, Lady Hoey, and others asked?
I note that it was the colleague of the noble Lord, Lord Swire, the noble Lord, Lord Marland, who came up with the idea of trade envoys, using his business acumen to see where the gaps were; it has certainly paid off. Many important trading partners rarely get ministerial visits, so trade envoys help to give consistency and continuity. We heard from the noble Lord, Lord Popat, about the work that he did. As a former trade envoy to Angola, I can say that we brought the first UK Export Finance support to the third-largest economy in Africa, in hydro, agriculture and health.
We have heard how we in the United Kingdom have gone backwards in relation to Africa. African GDP has grown by more than 20% in the past decade but UK exports to Africa have halved during this period. We were seen as a route into the EU, of course, but that has now gone. China is way ahead of us. The noble Lord, Lord Swire, is absolutely right about the changes in attitude and relationship from China—as was the case in Latin America, where the Chinese found that they did not have social buy-in if they continued with some of the practices that we then saw in Africa.
The Middle Eastern countries—Saudi Arabia, the UAE and Qatar in particular—are engaging with their sovereign wealth funds. The US and the EU, the world’s largest economy and the world’s largest economic bloc, are there. In 2020, the UK held an Africa trade summit; it was not as well attended as similar ones in the EU, although it was successful. There was due to be a summit this year but that has been postponed indefinitely. We were told that this is because there were too many elections this year, although that was known when the date was chosen, and because it clashed with other events; that was also known.
We have a new Government so, potentially, a reset. Again, the Minister appears to be nodding in relation to another summit. As we have heard, the opportunities in Africa, with its growing middle class, are vast. By 2050, this is where one-quarter of the world’s population is likely to be—young people. We should have certain advantages: the English language; our legal system, as the noble Lord, Lord Mancroft, mentioned; the City of London; UK Export Finance; and our universities. It is vital that we attract students here and build future relationships.
There is huge potential in Africa for renewables and for countries to leapfrog the West, as happened with mobile money. As others have mentioned, the critical minerals that we need for new industries are there in abundance. We must become more resilient and less reliant on China for those. We need a far-strengthened trade team to look after this matter in Africa; I declare my interest here as a board member of Pensana, which is developing a rare earth mine.
I am delighted that the noble Lord, Lord Collins, as the new Africa Minister, chose to make his first visit in his official capacity to Angola. The US and the EU are involved in the development of the Lobito corridor, a rail link between the DRC, Zambia and Angola and out to the west of Africa and the coast of Angola. We need to be there too.
There is much potential in Africa in the digital economy, as mobile banking has made clear. Health monitoring and treatment and insurance, as well as other financial products, are developing fast. Can I therefore urge the Government, as they develop their overall industrial strategy, to see the opportunities in Africa? This needs to be more than warm words or relying on long-distant past relationships. I look forward to the Minister’s reply.
Lord Johnson of Lainston (Con)
My Lords, it is a privilege to follow the noble Baroness, Lady Northover. Like everybody else, I congratulate the noble Lord, Lord Popat, on instigating this debate. We have had a pantheon of speakers of phenomenal quality. Many of them seem to be trade envoys hoping to keep their jobs under the new Government but the noble Lord, Lord Mancroft, was absolutely right: this is an essential programme that I, as Investment Minister, found incredibly useful and powerful. I recommend it and would like to hear from the Minister his comments on the continuation of that essential process, which allows senior parliamentarians from all parties to connect with key countries that otherwise do not get the attention they deserve.
In my view, coming from the last two years in what is now the Department for Business and Trade, Africa—both sub-Saharan Africa and the northern part of that great continent—is playing such a major role in the future of this nation as a trading and economic partner. The potential is phenomenal. If we combine that with the historic and cultural ties, which are so significant, we are one of the largest investors in Africa. I think that, on a corporate basis, we remain the largest—although, as we have heard from all noble Lords, including the noble Lords, Lord Hannan and Lord Popat, there is a continuing decline of our fundamental export and import trade. This is not just a “nice to have” and a new market; frankly, it is vital if we are to expand our economy. What is so frustrating is that the opportunities are so ripe; they are there for us to take advantage of them.
The first thing I draw attention to is the decline in actual activity. In my view, that can be attributed to the lack of government presence in Africa; the noble Lord, Lord Risby, mentioned the extraordinary paucity of our activity. We have fewer consulates across Africa compared to most of our competitors: China has 65 diplomatic missions while France has 68, but we have only 38 diplomatic missions. I do not know whether any noble Lords have recently read Rory Stewart’s memoir, where he laments exactly this—the sheer lack of people on the ground in terms of hard power and, most importantly, soft power.
I mean my questions for the Minister in the nicest possible way and not to be confrontational. I can see some of my former officials and colleagues sitting behind him; I am sure that they would agree with me. What plans do this Government have to increase our on-the-ground presence, especially in relation to Department for Business and Trade staff in Africa? These are complex and fragmented markets. The opportunities are there and other countries are stealing a mark on us.
The other point I turn to concerns our inherited advantages. We have talked about our history. For me, the history is very positive when it comes to doing trade—not just in terms of trade but in sport, as we have heard from many of my noble friends today. Some 130 million Africans speak English, with 21 countries having English as their official language and 19 being members of the Commonwealth. I pay tribute here to the noble Lord, Lord Swire, and his colleague, the noble Lord, Lord Marland—sadly, he is not in his usual place—regarding the importance of promoting the Commonwealth in principle in Africa.
Given this, what are we doing to encourage the promulgation of the Commonwealth? What are we doing to encourage countries such as Morocco, which, apart from being able to provide us with delicious tomatoes at tariff-free rates, will also at some point in the near future—if we can get this to work—possibly provide 4.5% to 5% of our electricity through the extraordinary projects that we are working on, with solar power being delivered to the UK? These countries want to join the Commonwealth. They want to leave other spheres of influence and join ours, so what are the Government doing to encourage that? Can the Minister continue to commit to funding for our Commonwealth organisations, which are so important?
My next point, which is to do with strategic issues relating to other countries’ activities in a more forward-footed way, follows on from that. I say this with no great prejudice but, as I understand it, China has built more than 100 ports, 100,000 kilometres of roads and 10,000 kilometres of railways. Frankly, how many ports, miles of railway and miles of road has Britain built or instigated in that great continent? Why are we standing by idle when others are moving so fast? Again, this is not just a “nice to have” or simply about helping our exporters; there are geostrategic imperatives here that I would impress upon the Government.
I come to my conclusion. We had a very successful UK-Africa summit, with 27 deals worth billions of pounds. It was extremely frustrating for me and, I know, for many of my colleagues in the department when the Africa summit was cancelled this year. I am certainly sorry about that, but that does not mean that this idea should not be taken up by this new Government. I would like to hear from the Minister what plans they have for a renewed push in Africa, renewed funding when it comes to the Department for Business and Trade, an extra additional effort and funding when it comes to promulgating our Commonwealth country brethren, and ensuring that we put in place, as rapidly as possible, plans for an African investment summit.
Lord Leong (Lab)
My Lords, I am pleased to respond to this Question for short debate. I congratulate the noble Lord, Lord Popat, on securing it. I take this opportunity to thank each and every noble Lord who spoke in the debate.
I express my sincere thanks to the noble Lord, Lord Popat, for introducing this debate. As everyone has mentioned, he was such an enthusiastic and engaged Prime Minister’s trade envoy to Uganda, Rwanda, and the DRC. I also thank all the other former trade envoys, including the noble Lord, Lord Risby, and the noble Baronesses, Lady Hoey and Lady Northover, for all the work they have done.
I will address the whole issue of trade envoys. We are considering how a reshaped trade envoy programme could align with the department’s priorities. Decisions will be taken. We need to look at what worked, what did not work so well and what can be improved on. We will take our time and I hope that an announcement will be made in due course.
I will also address the issue of China and Russia before I carry on. I have 12 minutes, so I will try to cover as many questions as possible. If I cannot, I promise I will write to every noble Lord who has asked questions. Yes, we all know that China, Russia and Iran—perhaps also India and the UAE—are advancing and investing in Africa. Africa is a competitive region. All nations want a piece of the cake that is Africa, and we know that China is probably one of the largest investors, but I believe that UK companies have a distinct competitive advantage. Many noble Lords have spoken about a common language and the rule of law. We have things that China does not have. We need to build on that and promote it. UK mining firms are doing very well in Africa in critical minerals and the department is supporting them. So yes, we acknowledge that China, Russia, India and the UAE are there, but we also have to promote British firms in Africa.
The formation of this new Government presents a real opportunity for us to reset and repair our relationship with the global South. In that context, it is my pleasure to speak about our work in Africa. As noble Lords will know, within five weeks of taking up his post my noble friend Lord Collins, the Minister for Africa, visited Rwanda, Angola and the DRC. He has seen what is working there. The Foreign, Commonwealth and Development Office’s single mission is economic growth, so we are aware of the challenges ahead of us and will consider Africa as an important market as part of our strategy.
Many noble Lords mentioned the fact that Africa’s natural resources are unparalleled, with 30% of the world’s minerals, including vital transition minerals, 60% of the world’s unused arable land and 13 million square kilometres of maritime economic zones. These are potential opportunities for British companies and we will not forget that. But more important than that are the people. There are 1.5 million people from the African diaspora in the United Kingdom and 2 million to 2.5 million UK citizens in Africa. We should use the people-to-people exchanges and develop this strength.
Many noble Lords have mentioned our links with the Commonwealth. Yes, we have to build on that link. I take this opportunity to thank the noble Lord, Lord Swire, for his work with the Commonwealth Business Council. There are many areas where we can work with that organisation in this respect.
Many noble Lords mentioned that, by 2050, Africa’s population will have reached 2.5 billion people—that is a quarter of the entire planet; it is more than China and India—with a very young average population age of 24. So, against the backdrop of an ageing worldwide population, the youth of Africa will become increasingly important for global prosperity. We should not forget that.
British companies are already making significant investments in Africa. The UK is the third-largest investor by investment stock in Africa, ahead of China, with investment worth £45 billion on the continent. Our exports to Africa have declined in previous years, as noble Lords have mentioned, but, in the past year or so, they have grown by 1.7%, with the current price at something like £22 billion. Let us build on that. The past is the past.
We recognise the potential of FDI businesses’ investment into the UK from African companies. We are keen to partner with these firms and seek growth opportunities in the UK and Africa.
We have talked about various preferential terms. I think that the UK has one of the most generous preferential trade policies with Africa of any country. We provide preferential trade access to more than 50 countries in Africa through our world-leading developing countries trading scheme, which was mentioned by the noble Lord, Lord Risby. We will monitor how that scheme is working.
I turn to our development focus on the economic partnership agreements that we have in sub-Saharan Africa and our various association agreements in north Africa. Through our bilateral trade agreements, we are removing barriers for UK and African business. On the point made by the noble Lord, Lord Hannan, we want to import not only tomatoes but okra and eggplants—and let us not forget watermelon. I am a fan of hot peppers; I want more hot peppers. Our agriculture review with Morocco was started under the last Government and we want to look at it and see how we can take it forward; it is a continuing work in progress. Yes, we would like to see more of this coming into the country.
Every speaker mentioned the African summit. Sadly, we had to postpone it, because of the election and some clashes in the international calendar, but the UK is committed to deepening connections with African countries, listening to all of our African partners and putting trade and growth at the heart of our partnerships. We will work closely with South Africa next year under its G20 presidency; we will make further announcements on that in due course.
The UK strongly supports the African Continental Free Trade Area agreement. We were proud to be the first non-African country to sign an MoU with the AfCFTA secretariat in September 2021. There is an intention to work more in that region. Our ambition now is to build on the momentum.
The department has a network of sector and country experts in 18 countries, supported by trade policy and market access specialists. They work together with our FCDO missions. The noble Lord, Lord Johnson, mentioned developing our diplomatic missions and so on. Yes, these will form part of our strategy. The noble Baroness, Lady Hoey, mentioned Somaliland. We are going to continue to keep it under review and look, across all of Africa, to develop trade projects where there are major buyers.
I know that I am running out of time, so I shall quickly conclude and perhaps answer some of noble Lords’ questions.
We are seeking to further growth here at home by facilitating trade contacts between African buyers and UK firms spanning our financial and professional services, agriculture, and renewable energy and mining, and at the same time to support UK business investment in critical mineral projects.
We are throwing our full support behind projects that translate into better infrastructure, education and healthcare. An example in healthcare is our work with the South African Health Products Regulatory Authority, where we have funded technical assistance to clear a backlog in registering new medicines and medical devices. The result is more medicines reaching providers in South Africa and, one hopes, the continent and a £62 million export win for a UK company. That is a really good story to tell.
Since 2020, UK Export Finance has provided more than £5.5 billion of support for UK exporters, comprising guarantees, loans and insurance. Just last year, UKEF closed its largest sovereign transaction with sub-Saharan Africa, arranging finance through a guarantee on a loan of €415 million to deliver critical infrastructure in Benguela province in Angola to protect the region against future flooding.
The noble Lord, Lord Bruce, mentioned international development and foreign debt. I have a note somewhere on debt relief, so I shall write to him.
What I mentioned earlier is not exhaustive, but it shows the breadth and depth of work being undertaken to drive up trade between the UK and Africa—work that has been accelerated as part of this Government’s mission to go for growth at every opportunity. We look forward to working further with every single noble Lord as we make this vision a reality.
The Clock has started flashing. If I have not answered any questions from noble Lords, I shall endeavour to write to each and every one of them.
To return to debt relief, this will form part of the Government’s thinking as we develop our plan for Africa.