Africa: Commercial Opportunities and Exports

Lord Leong Excerpts

Thursday 12th September 2024 Grand Committee

[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.