Theresa May is right to focus on post-Brexit trading opportunities in Africa | Theo Clarke
Author: Theo Clarke
This week we have seen the Prime Minister, and her dance moves, splashed across our front pages as she makes her first official visit to Africa. Preparing Britain for life post-Brexit, Theresa May is attempting to woo the continent and build on the UK and Africa’s historical relationship. She has announced that she wants the UK to be the G7’s number one investor in Africa by 2022. This is certainly an ambitious agenda but one that I welcome and believe is achievable through a focus on both trade and aid.
With Africa being home to 16% of the world’s population and that set to double by 2050, this is a canny move by the UK Government. As we chart a new course for our country, investing in the economic power of this young population will be absolutely key to the success of Global Britain. Africa’s GDP is set to reach $3.2 trillion in the next five years and the continent is home to five of the world’s fastest-growing economies.
As a trading nation, our success depends on global markets. A strong African economy and healthy workforce is good news for British people as well as Africans. However, we cannot rely on trade alone and should not forget that UK aid has a vital role to play.
Africa is still the poorest continent in the world and increasing wealth has also brought rising inequality. For example, Nigeria’s GDP is booming and many individuals are enjoying the fruits of the growing economy. Yet 87 million Nigerians still live on less than £1.90 a day.
Trade and aid must therefore go hand in hand to truly harness the phenomenal potential of this young population. And when you ask local people what they require, time and time again they answer the same – jobs. To be exact 50,000 new jobs per day are needed. Job creation in Africa is not only good for African people, but for us too. Investing in jobs is crucial to reduce the likelihood of mass migration, destabilisation and radicalisation.
The good news is that the UK is good at this. The Department for International Development created their first economic development strategy last year and CDC, DFID’s economic development arm, helped create over one million new jobs in Africa and South Asia in 2015.
A fantastic example of this is Africado, Tanzania’s largest grower and exporter of avocados (pictured above), which I recently visited. Many of the fruit and vegetables in your local supermarket will have been sourced from Africa and with Brits spending $144m on avocados every year Africado is a great example of how our aid budget has been used to kickstart an entire industry. Previously an abandoned coffee plantation, Africado is now a successful avocado farm exporting 2,600 tonnes a year.
This is a great example of the UK’s economic development in East Africa in practice and exactly what the Prime Minister is speaking about. Over 2,000 farmers now supply avocados to Africado for export meaning they have extra income and food and financial security for their families. Creating jobs is one way that UK aid is helping to tackle global poverty.
If we are to achieve the Government’s objective of a truly Global Britain then we need to support projects that boost economic growth and regional trade. Africado is one of many successes that I’ve seen first hand that shows how this strategy is working in practice. It is a great example of our aid budget being spent well, helping to create jobs at home and abroad, create new export markets and increase opportunities for trade between the UK and Africa. If you believe that Britain should embrace the new trading opportunities that Brexit offers, then this is the exact type of initiative that we should support.
Despite what you read in the papers, the UK is one of the most widely respected aid donors in the world. We understand that one of the best ways to end global poverty is to invest in growth and it is the private sector that is key to delivering these jobs. UK aid is a vital part of the UK’s global offer. As a trading nation, we benefit when we stimulate global prosperity and growth. Therefore I welcome the news that London will host an Africa Investment Summit next year to help investors and African governments forge closer ties. And I agree with the Prime Minister that foreign aid works but, like her, I am also unashamed about speaking about why it is not merely a gesture of altruism but is very much in the UK’s national interest.
By stimulating economic growth and job creation we can make sure that our development partners of today become trading partners of tomorrow. Take South Korea, a former aid recipient that has become a high-income country, providing jobs, investment and trade for the UK. Last year the UK traded £7.2bn worth of goods and services with South Korea, making them one of our top trading partners in East Asia. This is the perfect example of why aid and trade are not mutually exclusive but in fact two sides of the same coin.
As the UK redefines its role in the world, we have the opportunity to forge a more globally-oriented Britain and Africa is key to this. By 2050, a quarter of the world’s population and future consumers will live in Africa. Unlocking the potential of this growing, young population will be vital to making a real success of Global Britain.