UK-Africa Summit: UK Looks at Resetting its Economic Relationships with Africa

UK Looks at Resetting its Economic Relationships with Africa

Kenyan Horticulture

  • An estimated 8 of the 15 fastest growing economies in the world are in Africa
  • African countries receive less than 4% of foreign direct investment

The United Kingdom (UK) will host the inaugural UK-Africa Investment Summit in London. (UK-Africa) Summit planned for January 20 in London.

British Prime Minister Boris Johnson and the Department for International Development (DFiD) will host the meeting.

The summit will bring together businesses, governments, and international institutions to showcase and promote the breadth and quality of investment opportunities across Africa.

“The Summit will strengthen the UK’s partnership with African nations to build a secure and prosperous future for all our citizens. It will mobilise new and substantial investment to create jobs and boost mutual prosperity,” a statement from the Government of UK states.

Alok Sharma, Secretary of State for International Development says the summit “Offers Britain an important opportunity to flex its financial heft in the emerging world’s final frontier,” as quoted by the Telegraph.

In September 2019, he announced £500 million in private sector investment and create 50,000 jobs across sub-Saharan Africa. This was in support to financial start-ups and entrepreneurs and boost economic growth across the region.

UK Looks at Resetting its Economic Relationships with Africa
Alok Sharma, Secretary of State for International Development being showed around the EABL Kisumu Brewery part of Diageo

However, according to the Department for International Development (DFiD), “African countries receive less than 4% of foreign direct investment. The UK-Africa Investment Summit on 20 January seeks to change that.”

In 2018 trade between the UK and Africa increased by 7.7% and in 2019 the UK Department for International Trade (DIT) Africa (with approximately 95 staff across 23 African markets) helped UK companies secure business that generated £1.15-billion of value back to the UK economy as reported by ITWeb.

In Kenya, Britain remains one of the largest foreign investors in Kenya with bilateral trade totalling over £1.3 billion (KSh173 billion) writes the Business Daily with over 60 companies operating from Kenya, including Barclays Bank , British Airways, BAT , Standard Chartered Bank , Diageo, GlaxoSmithKline, Unilever, De La Rue, Finlays, G4S, Tullow Oil and BG Group.

UK Looks at Resetting its Economic Relationships with Africa

What is at stake?

Africa’s growth potential is positive with a projected economic growth of 2.9 percent in 2020 and may accelerate further to an average of 3.2 percent during 2021 and 2022 according to the World Bank’s Global Economic Prospects report.

An estimated 8 of the 15 fastest growing economies in the world are in Africa.

Growth in the region’s three largest economies Nigeria, South Africa, and Angola is expected to rise to 2.1 percent, 0.9 percent, and 1.5 percent, respectively, in 2020, from an estimated rate of 2 percent, 0.4 percent, and negative 0.7 percent in 2019.

In Kenya, growth is seen edging up to 6%.

The International Monetary Fund (IMF) on the other hand projects an overall average economic growth rate forecast of 3.8% (or 3.6% for Sub Saharan Africa).

UK-Africa Summit
Joint training between Kenyan and UK troops in Laikipia County

Former UK Prime Minister Theresa May ahead of her maiden visit to Sub-Saharan Africa -South Africa, Nigeria and Kenya-, she said: “A more prosperous, growing and trading Africa is in all of our interests, and its incredible potential will only be realised through a concerted partnership between governments, global institutions, and business. 

“By 2022, I want the U.K. to be the G7’s number one investor in Africa, with Britain’s private sector companies taking the lead in investing billions that will see African economies growing by trillions.”

Marcus Courage and Natalie Maule, Directors of Africa Practice, a strategic advisory firm operating at the nexus of industry and government jointly state that “At a time when China, Japan, the US, Russia and India are all pursuing clearly articulated agendas in Africa, the UK must unleash its political imagination, it’s economic will and it’s social capital – based on belief in a common destiny. Everything should be on the table, including reform of the UN Security Council, where Africa’s voice is so starkly under-represented.”

“If Britain fails to engage African leaders and African societies in more transformative ways now, before Africa’s demographic momentum becomes overwhelming, she will have lost one of the greatest opportunities to harness global demographics for positive outcomes and failed Britain’s youth in the process.”