Africa: European Union Economic Partnership Agreements

Lord Boateng Excerpts

Thursday 17th November 2016 Lords Chamber

[Lord Boateng (Lab)]

My Lords, I begin by thanking the noble Lord, Lord Chidgey, for his continued championing of the cause of Africa in this House. I declare my interest as chairman of the African Enterprise Challenge Fund. I have an immediate and continuing interest because in many ways I owe my education to African agriculture. As a boy in the Gold Coast and then in Ghana I was the recipient of a cocoa marketing board scholarship. I was christened in a rural village in eastern Ghana. My paternal grandparents were farmers of cassava and cocoa. I saw at first hand the significance and the importance of agriculture in Africa. It accounts for 32% of Africa’s GDP. It is Africa’s most inclusive employment sector, employing some 65% of its labour force, 60% of whom are women. My grandmother was a cassava farmer and they are to be found all over Africa—women toiling in the fields but not always the beneficiaries of the product they produce. But that is a familiar story the world over.

Despite the fact that Africa has agriculture so very much at the heart of its economic, social and cultural life, the reality is, I fear, that farmers’ yields are among the lowest in the world. Per capita, Africa’s agricultural output is only 56% of the world average. When we look at the continuing reliance of Africa on imported food, the story is even worse—1.7 times the value of exports and rising, to feed the appetite now of a growing middle class. Africa is now importing so much more than it exports and paying so much more for that—upwards of $40 billion every year. That is the cost of failing agriculture in Africa.

The issue raised by the noble Lord, Lord Chidgey, about the impact of the EPAs is essential, because they provide the policy context within which African Governments relate to the agricultural community. Smallholder farmers in particular need a policy environment that encourages them to modernise and scale up production, encourages improvements in access to higher-yield seeds and quality fertilisers, thus enabling agribusiness to thrive. It needs to address issues around research and development, infrastructure and transport logistics. All these things are necessary if African agriculture is to be a driver of development on the continent.

EPAs therefore have to be judged, I would submit, in the context of the extent to which they help or hinder this process—and I fear that the jury is out on that point. There is little evidence to suggest that the forced liberalisation of markets in Africa actually works or that it enables support to be provided for indigenous African agribusiness, processing and manufacture. On the contrary, EPAs could well hinder them, and there are many examples where they have. So countries in Africa have understandably been cautious in their approach to EPAs. Some, like Tanzania and Uganda, have used Brexit as an opportunity to stall the process altogether, for they see little that benefits them and much that may well do harm. In west Africa, Nigeria has stood out specifically against EPAs because it fears the impact on its nascent manufacturing industry. Again, Nigeria has good cause to do so because when we look at the progress of the tiger economies of south-east Asia, we see that they have benefited from a process that would actually have been hindered by EPAs.

I would argue that Brexit provides an opportunity for us to take stock and to build a trading relationship with Africa that puts development at the heart of that relationship. It should draw on the best of existing and global practice and build into our new trading agreements the sort of arrangements that will enable Africa to develop its own processing sector, that will enable links to be developed between smallholder farmers and both regional and global value chains, and that will recognise that a degree of protectionism for local industry is probably necessary in order to promote the development of agribusiness on the continent. That in turn will provide opportunities for British companies. They will have an opportunity to assist in the development of capacity in Africa, to improve R&D and yield, and to provide the machinery and know-how that will enable Africa to grow its agribusiness and enhance its own value chains.

Ethiopia provides a classic example of how that can work in practice. The Ethiopians have resisted the imposition of external agendas and external solutions to their challenges. They have targeted science and innovation alongside support for rural farmers through nurseries, as well as the development of co-operatives. They have supported agri-industrial parks for the production of leather goods and other products related to agriculture and they have brought enhanced and added value to their own specialist coffee brands. All of this has been done in a way that has assisted smallholder farmers.

It has also been done in a way that has provided real opportunities for British business. Diageo is a classic example of that. It has developed its processes in both Ethiopia and in South Africa in a way that links smallholder producers of sorghum and other contributors to beverages directly to its factories. That has enhanced and added value and has enabled smallholder farmers to become stakeholders, and it has added shareholder value to those who invest in Diageo by increasing foreign direct investment in Africa. That is the way forward for Africa and for the UK.

In conclusion, I make a simple request—well, it is not simple, because it is quite a complicated process. I hope that the Minister will respond in a way that gives us heart, as I am sure he will, because DfID and the Secretary of State, to their credit, have been in the forefront of bringing some reassurance to Africa in this area. I ask that Britain continues to provide EBA—everything but arms—and GSP trade benefits for Africa; that we seek to conclude duty-free and quota-free market access arrangements at least with non-LDCs and in particular those that have long-standing trading links with our country; and, most importantly, that we maintain MFN WTO tariffs on sensitive products of particular importance to African countries and exclude such products from preferential trading arrangements with other regions that are low-cost competitors—for instance, in South and central America. The classic example here is Brazil and sugar. It is likely that the Brazilians will be up there on the list for early trade negotiations. If they are given preference at the cost of sugar producers in Malawi and in Swaziland, the consequences for smallholder farmers will be disastrous.

So there are challenges ahead, but there are opportunities. One should have no doubt about that when one looks at DfID’s increasingly high-profile investment in agriculture, when one looks at the interests of the Secretary of State in promoting a private sector role in development, and when one looks also at this House, where friends of the African smallholder farmer are to be found on all Benches—I do not think that there is a legislative body in the world that contains more friends of the small African farmer than this one. I hope that the small African farmer, who is at the heart of development and of Africa’s search for dignity and success, will continue to find friends and solace in this place.