As the UK-Africa Investment Summit takes place in London today, AFFORD executive director Onyekachi Wambu, says the diaspora has a unique and critical role to play in smooth and successful trade and they must have a seat at the table in the development of new agreements.
Africa is a huge, emerging and increasingly important market for Britain and Boris Johnson knows it.
With Africa’s population of 1.2 billion predicted to reach 4 billion by the end of the century – by then, 40 per cent of the world’s population – that market will only get bigger. According to the IMF, Africa is home to eight of the world’s 15 fastest growing economies. By 2050, one in four global consumers will be African.
More pressingly for the prime minister, the UK-Africa Investment Summit on Monday (January 20) is the first big opportunity since December’s decisive general election for the government to showcase and shape its vision of trade in a post-Brexit, Global Britain. So, it doesn’t surprise me that he will be personally welcoming the cavalcade of African leaders coming to London.
The UK wants and needs closer trading partnerships with African nations, so those leaders will arrive knowing they hold plenty of cards. Mr Johnson should be clear: it isn’t going to be easy.
Africa is a maiden being courted by many suitors, so no deal with the UK might well be better than a bad deal. Britain is jostling its elbows amid a clamour of competitors: Chinese trade with Africa grew from $10 billion in 2000 to $204 billion in 2018, the US has pledged $60 billion to focus on power, while Germany is proposing a ‘new Marshall Plan’ for Africa.
Like they have done with the Chinese, African governments will be pushing for hard deals for increased capital and investment in structural transformation to drive growth and job creation. Infrastructure development that enables goods to be moved around the African economy will be vital.
They also want to prioritise support for regional and continental integration through bodies like ECOWAS and the African Continental Free Trade Area (AfCFTA).
But in the negotiations, maybe Britain has an ace up its sleeve too. Unlike China for example, we have long standing relationships with many African countries and very strong present-day connections with the Continent, through the millions of people who make up our African diaspora.
Post-Brexit, our spirited and entrepreneurial diaspora can be a huge asset in helping Global Britain enter these emerging markets. The unique and critical role this group can play in smooth and successful trade should not be underestimated and they must have a seat at the table in the development of new agreements.
The diaspora provides ready-made and unrivalled networks of partners for end-to-end trade and the unique skills, knowledge and commitment that come with having a foot both here and over there.
The Summit’s goals include ensuring ‘a prosperous future for all our citizens’ and boosting ‘mutual prosperity’. This suggests any trading partnership between the UK and African nations should be founded on equality and reach beyond aid. Africa must be allowed to trade more freely in areas in which it enjoys a comparative advantage, such as agriculture and labour.
Labour has dominated Africa and UK trade ties for 400 years, first through slavery, then colonisation. This came to an end only in the independence era. In 2020, serious trade deals, that avoid being one-sided and finally give African interests equal standing, will have to include provision for the movement of labour, and unfettered market access for African businesses and business people.
The UK’s current visa regimes demonstrate a reluctance to allow potential global African ventures such access and the freedom to grow their businesses, small or large, as highlighted in a report by the African Foundation for Development (AFFORD) and its partners last year. This will have to be addressed, so it is easier for Africans to come to the UK to do business.
An additional $2.5 trillion is needed every year to end poverty in developing countries and meet the SDGS. So there is an urgent need to mobilise far more private sector investment.
The huge financial value of diaspora remittances needs to be more formally integrated into investment and aid structures. What is at stake here is the $87 billion that the World Bank estimates was sent to Africa in 2018 to fund day-to-day living, healthcare, education and investment projects.
The UK government and its Department for International Development must continue to work with the diaspora and diaspora organisations to ensure diaspora remittances are part of a more structured response in meeting this financial shortfall. One example is AFFORD’s plan to raise investment for affordable housing in Rwanda by issuing a diaspora bond, denominated in local currencies, in line with DFID targets to develop local African capital raising markets.
The diaspora needs to be a fully visible partner in the efforts to deliver the SDGs. This is a huge agenda with enough work for everyone.
Currently, more than 20 million people enter the African job-market each year, which is expected to rise to 100 million by 2100.
It is in all our interests to help secure African stability, jobs and growth because conflict, poor work prospects and economic instability will continue to encourage migration and dangerous escape journeys to Europe. By using its financial and intellectual clout, its investment and business development advice, the diaspora can support the small and medium sized enterprises (SMEs) which will generate the millions of jobs and help turn migration and development challenges, facing both Africa and the wider world, into a triple win situation for Africa, the UK and for the diaspora themselves.