We must seize the opportunity to pursue a post-Brexit trade deal with Africa
In the next few decades, it is my sincere hope that we return to being Africa’s most important partner of choice, writes Lord Popat | PA Images
A year on from the first UK-Africa Investment Summit (AIS), progress has been made to improve our links with the great continent of Africa. We have only just started.
On the anniversary of the UK-Africa Investment Summit in London, we look back on this historic event which brought together heads of state, politicians and business leaders from the UK and Africa. In the year since the summit, progress has been made. Post-Covid and post-Brexit, it is key for the UK to promote exports and investment to this magnificent region.
Africa is where the future lies, arguably the most rapidly developing and innovative region in the world. The continent accounts for 17% of world population, but only 3% of global GDP. There is good reason why many call it the ‘Last Frontier.’ It is not too late to harness Africa’s abundant opportunities.
By 2050, more than a quarter of the world’s population will be African. And this population will be overwhelmingly young and middle class: the continent is experiencing the fastest growth of the middle class in the world, with 24 million people added to its cities each year. Its collective GDP is nearly $7trn and among the fastest growing in the world. Business opportunities are soaring at an unprecedented rate, currently worth nearly $6trn. Digitisation, improvements in infrastructure, and political reform are taking hold. One thing is clear: Africa is the place to be.
Why, then, was our total trade with the continent just $27bn in 2019 (2.4% of the UK’s total trade). Germany and France export double the value of goods that Britain does to Africa. In stark contrast, over half of the UK’s exports are sent to European countries.
What is perhaps most disappointing is that not so long ago we were at the front of the pack in doing business with Africa. The UK’s role as an exporter has significantly deteriorated in the past few decades. In the 1970’s, 16% of Africa’s imports came from the UK, falling to 7% by 1998 and approximately 2% now. This is bleak reading, but the good news is that our influence on the continent remains.
Post-Covid and post-Brexit, it is key for the UK to promote exports and investment to this magnificent region
As a Trade Envoy for three African countries, I am constantly reminded of the love they have for Britain and their preference for doing business with us. We cannot underestimate the soft power we have: 18 commonwealth countries; English the business language in 75% of African countries; and of course the shirts of our football teams are ubiquitous. We must leverage this soft power into hard cash.
I am extremely glad to see this government being more proactive in Africa. Greg Hands, the Minister for Trade, has been working extremely hard with Trade Envoys to see how we can increase our exports to Africa. The Prime Minister also recently announced an expansion of the Trade Envoy programme to cover more African countries and greater UK Export Finance funding has been made available for markets with large potential. Presence of the DIT and FCDO is increasing: the former is expanding its reach across the continent under the leadership of HM Trade Commissioner for Africa, Emma Wade-Smith, while the latter now has a physical footprint in 23 African countries.
I urge policymakers to consider a free trade agreement with the continent. The Africa Continental Free Trade Agreement is coming into force next year, creating the largest free trade area in the world by number of countries, with a market size of over $3trn. This is the perfect opportunity for a one-stop shop FTA with the whole African continent to open up African markets which currently seem to be out of reach for many UK businesses.
We are devoting the rest of our days to ensuring the UK harnesses Africa’s potential. In the next few decades, it is my sincere hope that we return to being Africa’s most important partner of choice.
Lord Popat is the Conservative member of the House of Lords.