Exports to Africa

Viscount Waverley Excerpts

Thursday 28th October 2021 Grand Committee

[Viscount Waverley (CB)]

My Lords, the noble Lord, Lord Popat, made an outstanding introduction. His drawing attention to the necessity for a fresh start was spot-on. I also agree with the noble Lord, Lord Mancroft, on the remarks of the noble Lord, Lord Hannan, that too much is often asked from government. What government can bring is assistance and funding. With funding, we will be in a good position.

Nothing will give more satisfaction than the words of the Chancellor noting that the UK is entering an “age of optimism” with the mantra of global Britain becoming a reality. However, we will not achieve positive results by carrying on as in days of old: relying on historical associations which, with today’s digital world and the proximity of near-neighbour markets, have not stood by for the UK to return to the fold.

It can be said that we carry certain advantages in Africa and can reasonably expect a warm welcome in traditional Anglo-African markets. We should not, however, take anything for granted. We must compete and explore new marketplaces. The bedrock to success must surely be expressed in terms of identifying and fulfilling overseas market opportunities in non-traditional locations. Africa is made up of disparate associations past—anglophone, francophone, lusophone and North African—all rich in culture and opportunity.

My contribution today attempts to move away from Commonwealth links and look to opportunities often overlooked by British interests. The francophone world is keen to extend dialogue beyond the clutches of Paris and is looking to link with the Anglo-Saxon world. At this point, I draw your Lordships’ attention to my entry in the register.

The francophone Africa region, once the preserve of France, presents increased opportunity for investors and businesses. With increased investment in infrastructure and improved business environments, it is expected to show some of the fastest regional growth rates in Africa. As an example of increased infrastructure spending and diversification, Côte d’Ivoire is projected to be the fastest-growing economy. Cameroon represents a market of more than 50 million people, making francophone Africa viewed as a must-do region. Ernst and Young has identified Côte d’Ivoire with agriculture, Senegal with tourism, and countries such as Cameroon, Gabon and the Republic of Congo as reliant on the oil and gas industry. Mining is also growing in prominence in countries such as Burkina Faso and Niger. In terms of a regional hub, I normally associate either Casablanca, Abidjan or Dakar as good places from which to make inroads into the francophone world.

Moving on, the African Continental Free Trade Area is making Africa’s Portuguese-speaking countries an attractive destination for investor interest, with incentives for investors. Angola, Cabo Verde, Guinea-Bissau, Equatorial Guinea, Mozambique and São Tomé are diverse. They have a common heritage and language, and all have close ties with Portugal and Brazil. Public-private sector partnership investments and technical assistance projects are enabling the private sector with access to finance. Although our excellent ambassador in Lisbon, Chris Sainty, will probably not thank me for saying so, Portugal could be considered a gateway.

I am conscious of not overstaying my welcome this afternoon, but I wish to conclude with a final word on north Africa. Africa is Africa and should not be defined in terms of sub-Saharan Africa, which, by definition, excludes the important markets that stretch from the Maghreb to the Arab-speaking countries of Libya and Egypt. North Africa is a region of strategic importance to us, not least as an important energy provider. The Government might wish to consider, for example, unlocking energy supplies to the UK by supporting the trans-Saharan pipeline project, long in the making but not as complicated it seems, with the strategy of just joining up the dots of the disparate pipelines that exist from, for example, Nigeria up to the Mediterranean. Many opportunities for trade exist, beyond building regional value chains but integrating them into global value chains. Regional economic integration, combined with new technologies, would bring a plethora of opportunities.

Knowing that he understands, let me share a direct thought with the Minister. I urge the establishment of a global unit in his department, should one not currently exist, to identify opportunities that transcend language and legal frameworks, possibly providing a matchmaker operation as a winning formula centred around all-important local partnership, which is essential in avoiding pitfalls and providing solutions to local complexities.

--- Later in debate ---

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, I thank the noble Lord, Lord Popat, for raising this important question today and giving me the opportunity to share the Government’s vital work with countries across Africa to increase trade and prosperity. I will speak later, if I may, about the excellent work that my noble friend does in this area. I also thank all noble Lords who have contributed today for the expertise that, as always, has been on display.

We already have strong trade and investment relationships with countries across the continent, but the Government are committed to going further. I very much support the pressure that noble Lords put on us in this area. I particularly share the aspiration that my noble friends Lord Popat and Lord Hannan of Kingsclere have in this area. I also absolutely recognise the point made by the noble Viscount, Lord Waverley, about the opportunities available to us in the francophone area, and I will ensure that those are followed up. The long-term opportunities that exist in Africa are truly staggering. By 2050, one in four global consumers will live in Africa and we are committed to increasing trade between the UK and Africa and between Africa and the global economy.

In January 2020, at the UK-Africa Investment Summit held in London, the Prime Minister set the ambition for the UK to become Africa’s investment partner of choice. As the UK’s Minister for Investment, I endorse that aim. The summit laid the foundation for new partnerships between UK and African nations based on trade, investment and our shared values. We have announced £6.5 billion of investment deals, with a further £8.9 billion of commitments at the time of the summit. I am pleased to say that despite the pandemic—and we do not always see this—not one of these deals has been lost since then. In January this year, as a follow-up, we held the Africa Investment Conference to mark the anniversary of that summit. The conference brought together 3,000 delegates, including over 1,000 business delegates from more than 40 African nations, and north of 1,000 business representatives from across every region and nation of the UK. I do not think there can be any better evidence of the opportunities than the fact that businesses small and large came together at that time. The noble Lord, Lord Grantchester, is of course absolutely right that these conferences mean nothing without follow-up afterwards, and part of my role is to ensure that that is done.

I hope I can reassure the noble Viscount, Lord Waverley, that the DIT’s Africa network plays a vital role in helping UK businesses seize opportunities in African markets. It supports commercial projects through its expert advice to companies and works with local officials to encourage UK investment. I believe that our newly independent trade policy is enabling us to reduce barriers to entering African markets and offers increased access to the UK. As we have heard, we have already negotiated nine trade agreements covering 16 countries across Africa that represented almost £22 billion of bilateral trade in 2019. My noble friend Lord Hannan of Kingsclere gives way to no one in his enthusiasm for using free trade agreements to bolster Commonwealth ties, and I really share his aspirations in this area. I see free trade agreements with our Commonwealth friends as a way of rejuvenating and expanding the role of the Commonwealth going forward.

Our generalised scheme of preferences is reducing tariffs on imports from developing countries, further enabling trade. A public consultation on our proposed new developing countries trading scheme—DCTS—has just closed. Policy options are being developed with the aim that the new DCTS is simpler, more generous and less bureaucratic than our current system. I share the belief of the noble Lord, Lord Purvis, in the importance of this; he has raised it with me in the past. My noble friend Lord Hannan is completely right that while removing trade barriers is of course a Government-to-Government activity, the heavy lifting in this area has to be done by the private sector and it is our job to facilitate this. The noble Lord, Lord Mancroft, is also right to stress the importance of door opening in this area.

I will quickly turn back to my noble friend Lord Popat, who is of course one of our 11 trade envoys in Africa, appointed by the Prime Minister. They enhance our trade with the continent by building on the UK’s existing relationships in these markets and joining trade missions to identify export opportunities. Nobody is more hard-working or conscientious in this area than my noble friend Lord Popat in his role as the trade envoy to Uganda and Rwanda over the past five years. Today, we heard some of the practical outcomes of his work, and I thank him for that on behalf of the Government.

Supporting economic growth in Africa is a key priority for the Government. Our vision is to do this through a trading partnership geared towards a safer, greener and healthier continent, one that is ever more resilient to shocks and stresses. We are determined to support countries across the continent to build back better from the pandemic. As I said earlier, the private sector will have a key role to play here, but the Government will be on hand to support exports. I listened very carefully to the noble Lord, Lord Chidgey, who of course spoke from real practical expertise in this area. I think I probably detected a fellow Land Rover enthusiast.

We are launching a refreshed export strategy designed with the needs of our business at its heart. We want to give businesses the flexibility, resilience and capabilities that they need to thrive in this fast-changing global environment. Picking up the point made by the noble Lord, Lord Grantchester, I will ensure that opportunities in Africa are fully taken account of in that strategy.

Demand for UK Export Finance in Africa is booming. It supported more than £2 billion-worth of projects in Africa in 2020-21, which is of course helping us to deliver on our strategy to make the UK Africa’s trading partner of choice. Of course, it is absolutely right and proper that many of these projects have a sustainable impact on the continent. For example, a UKEF loan to the Ghanaian Government will help UK-based Aqua Africa to provide clean drinking water for 225,000 people across the country. However, I will pass on my noble friend Lord Mancroft’s points about the importance of speed and the reduction of bureaucracy as far as possible in this area.

In investment, as many have retracted from Africa, I was very pleased to see that, last week, the CDC Group, our development-oriented private equity business, together with DP World, announced a £1.7 billion partnership to accelerate Africa’s trade potential and improve the economic prospects of millions of people, starting in the ports of Berbera, Dakar and Sokhna. The CDC, working together in partnership with others to bring sustainable investment opportunities to Africa, will become increasingly important. I know that my right honourable friend the Foreign Secretary shares my aspirations in this.

African Governments need to create conditions that attract the private sector and provide a stable environment for investors. We all know that a better-educated, healthier workforce will create the entrepreneurs, start-ups and consumers of tomorrow. Improving access to education and health will help us to deliver the transformational change that the African continent needs to secure growth in the future.

We have heard today many references to the African continental free trade agreement. I agree completely with the noble Lord, Lord Purvis, about the opportunities that this presents. We are pleased to be supporting the secretariat with some practical help. When it is fully implemented, this agreement stands to boost intra-Africa trade by up to one-third, establishing a common African market with a combined GDP of £2.5 trillion and a population of 1.3 billion people. I am very pleased that, in September this year, Ministers signed a memorandum of understanding with the secretariat of the ACFTA, to continue to provide support. It is a testament to our commitment to the continent that the UK is the only non-African country to have entered into such an agreement.

Throughout the G7 presidency we are working with other development finance institutions to increase ambition on investment into Africa in the post-Covid world. I have already had various approaches from sovereign wealth funds elsewhere in the world, to see whether they can join us in this important initiative.

Finally, I emphasise that all the previous steps—we often say this in our House—need to be underpinned by our concern for the environment. Investment and development finance will increasingly flow, and should flow, to those who have clear, sustainable growth plans. COP 26 will provide an opportunity to champion a green economic recovery from Covid-19 across the continent and the rest of the world.

I truly believe that this Government and British business have a significant role to play in Africa’s brighter future. I believe that it is only through trade and investment that countries across Africa can continue to grow and prosper. I am happy to meet the noble Lord, Lord Purvis, to discuss further how we can push prosperity in Africa.

I have tried to deal with as many questions as possible that were raised today. I am conscious that, as always, I have not answered all those that the noble Lord, Lord Grantchester, raised. If I may, I will write to him on some of his specific questions.

I reassure noble Lords that the UK will be on hand to support African countries every step of the way. I must thank again my noble friend Lord Popat for being such a champion for African trade and industry and for allowing us to debate this important topic today.

[Viscount Waverley (CB)]

My Lords, I apologise for intervening but I would like to draw attention to Emeka Anyaoku, who was Secretary-General of the Commonwealth. He emphasised the importance of a consultative process at the invitation of countries in Africa to consider, sector by sector, what can be done between those sectors in African countries and their opposite number in this country to see how we can work together. I want to put that on record.

[Lord Grimstone of Boscobel (Con)]

I thank the noble Viscount for that intervention. I will certainly make sure that it is recorded.