Sub-Saharan Africa (Report from the International Relations and Defence Committee)

Lord Sarfraz Excerpts

Wednesday 8th September 2021 Grand Committee

[Lord Sarfraz (Con)]

My Lords, the committee has produced an excellent report. I will focus on a very specific bit of it, the role of CDC, which the noble Earl, Lord Sandwich, and my noble friend Lord Eccles mentioned earlier.

I happen to think that CDC can do a whole lot better. It has said it aims to invest $1 billion a year in Africa, but before it invests a single additional dollar it needs to revisit and rethink its investment strategy. CDC should be backing the boldest and most innovative entrepreneurs in Africa, those thinking about the biggest problems across the continent, but it hardly ever does that. It invests large amounts in private equity funds and expects them to invest on CDC’s behalf, as the report points out. As such, it has very little control over investment decisions at these funds, and ends up owning all sorts of exotic assets.

CDC owns a Pepsi bottler in South Africa, hotels in Mali, Burkina Faso and Ghana, an Ethiopian fine wine business and a real estate development called Project Paradise in Mauritius. I could go on and on. Surely there must be a better way to achieve CDC’s own stated goal, which is “to leave poverty behind”. Fizzy drinks and upmarket hotels are probably not a priority.

It is also disconnected with our own Government’s bold ideas domestically. We published the UK Hydrogen Strategy last month. Why is CDC not trying to find the most promising entrepreneurs working on hydrogen fuel cells in Africa? They exist. We say we want to be the global science and technology superpower. Why is CDC not directly backing the very best technology entrepreneurs, scientists and innovators across Africa? Just ask any African entrepreneur and they will tell you the same thing: when CDC does invest directly, it prefers to work with big-name groups, conglomerates and big banks—everyone across Africa who does not need our money.

Finally, CDC flies the UK flag globally, but without the accountability and standards our diplomats are held to. When an entrepreneur meets a CDC representative overseas, they see them as a representative of the United Kingdom. Over the years, I have spoken to dozens of entrepreneurs in Africa who feel they were brushed off when pitching their ideas to CDC. Its employees must be held to the same standards as others who fly the UK flag.

One billion dollars a year is a lot of money. It can go a very long way, but for that to happen CDC needs to embrace African entrepreneurs. I hope this Government insist that it does so.