International Development

Rob Butler Excerpts

Thursday 18th June 2020 Commons Chamber

[Rob Butler (Aylesbury) (Con)]

There is a saying that charity begins at home, and over the past few months we have witnessed extraordinary acts of charity and kindness across the United Kingdom. Confronted by coronavirus, people have volunteered to help neighbours who are shielding, donated to food banks to help the hungry and contributed to appeals raising funds. We have truly seen the best of British. However, charity does not end at home. Our help is needed not just here, but in other countries and on other continents—perhaps nowhere more so than in Africa. That is why I whole- heartedly support these measures and will speak specifically to those affecting the African Development Bank.

The bank is, as we have heard, an important player in African nations’ development, and crucial in the reduction of poverty. Right now, there is a pressing need for the bank to help African countries cope with coronavirus. Many of them do not have the resilience that exists here in the UK. A considerable number have to cope with malaria, and Congo is tackling an outbreak of Ebola. There are fears that covid-19 could lead to a wider food and health crisis, and deep concerns of lasting damage to economies that are already fragile. Although there has undoubtedly been considerable progress in economic development over the past 10 years or so, there is a real risk of that being undone. The African Development Bank is being called on to ensure that that does not happen and to provide immediate help in many parts of the continent.

That underlines the role that the African Development Bank has built in recent years. Its High 5s initiative focuses on providing infrastructure through prioritising the needs that are most pressing across the continent: sanitation and water, energy, transport, finance and agriculture. Those are ultimately all about enabling and equipping the people of Africa to improve their own lives.

The UK’s contribution to the replenishment of the African Development Fund will undoubtedly have a marked beneficial impact on the objectives of inclusive and green growth. The greater focus on climate and gender in designing projects agreed as part of this replenishment are extremely welcome reforms to the bank. I am also pleased to see a commitment to speedier delivery of project funds. Similarly, it is encouraging to see that approximately £100 million is dependent on a positive mid-term review, underlining the need for contributions from the UK to be based on effective performance. I look forward to hearing more from the Minister about how that will be assessed.

On the instrument on further payment to capital stock, it is worth highlighting the beneficial impact that a relatively modest immediate payment for shares brings, as the increased capital stock then enables the bank to leverage its balance sheet on the capital markets to mobilise private sector financing for projects. It is a matter not simply of giving money, but of demonstrating confidence and thus building even greater capability.

The instrument on the multilateral debt relief initiative honours our commitment to cancelling the debt of some of the poorest nations in the world, and I fervently hope that the UK’s financial assistance to the African Development Fund will make a material difference to those countries’ ability to tackle poverty and develop economically now that the burden of unmanageable debt has been relieved.

Although the UK’s shareholding in the African Development Bank is relatively small, I know from conversations with senior members of staff at the bank that we are seen as a very important stakeholder. Our commitment at this time sends a strong message to other shareholders and donor nations. That is surely welcome.

One reason I was keen to speak on the African Development Bank is that, among multilateral development banks, it is in a unique position. It is headquartered and based in Africa and has teams on the ground that really understand African nations and can interact with Governments to help both public finance management and governance. With technical and financial expertise, it is able to mobilise resources and improve capacity so that countries can reduce their dependence on donor funding.

These instruments today are a reminder of the potential for the UK and African nations to forge closer and stronger relations, especially as we leave the transition period following our departure from the EU. Our historical relationship and, in the case of many African countries, shared membership of the Commonwealth also provides opportunities. The president of the African Development Bank himself said on a visit to London in January:

“As wealth grows in Africa, it leads to wealth growth for the UK.”

He pointed out that our strong trading and cultural ties give British investors a head start in Africa, where, as he put it, there are

“huge markets, brimming with enormous investment opportunities.”

It is therefore perhaps something of a pity that foreign direct investment from the UK to Africa has fallen by a third since 2015, but I hope that the Government’s commitment to the African Development Bank, as demonstrated by this new funding, will provide at least a nudge to investors to consider the potential for imaginative and bold action that could bring mutual benefit.

It is important that the British taxpayer has confidence that the money devoted to development is spent wisely and carefully. There have been too many cases in the past of waste, profligacy and worse. Wherever our development funds are sent, there must be thorough auditing of projects and robust analysis of their real-world impact on the people in greatest need.

[Mr Mitchell]

Does my hon. Friend agree that the prime way of ensuring that there is really good value for money, apart from all the structures that have been put in place, is the Independent Commission for Aid Impact, which was set up by the coalition Government in 2010? It is the taxpayer’s friend. It is independent of Government; it reports not to the Executive or to the Department but to Parliament and, at the moment, to a Sub-Committee of the International Development Committee. Does he agree that it is very important, for precisely the purpose he set out, that ICAI should be retained in full?

[Rob Butler]

I do indeed, and I take the point that my right hon. Friend makes. I was going to mention that I am indeed pleased that the Independent Commission for Aid Impact is currently conducting a review of the effectiveness of DFID’s support for the African Development Bank Group. It is perhaps a pity that it was not able to report before the decisions that will be taken today, but that is understandable given the limitations caused by coronavirus. As a general principle, it surely makes a lot of sense to have the independent scrutiny that my right hon. Friend refers to.

Additional scrutiny of how we spend development money is inevitable. As here in the UK we confront the worst recession we have known, it will be vital to demonstrate how supporting development initiatives is beneficial to us all. I feel confident that Ministers will ensure that that is the case with the moneys we are discussing. The Minister may even wish to provide me with some reassurance on that momentarily.

It is right that, even in difficult economic times at home, we continue to support those elsewhere who are much worse off. These funds for the African Development Bank and those for the International Development Association of the World Bank illustrate how Britain can be a force for good by making solid financial and political commitments that contribute towards economic development and social progress around the globe.