Look to Africa for ‘hard cash’, Lords tell new UK government

The British government was urged to treat Africa as a place of opportunity to make money.The House of Lords said the UK had missed the boat and had to play catch-up in the race for Africa’s critical minerals.The Commonwealth is seen as an open market for British businesses in Africa.

The Labour government in Britain has been urged to rethink soft power and diplomacy, and to look for “hard cash” in doing business with African countries.

Since Brexit, the former colonial master has had to set up its own trade relationships outside the European Union.

And, as things stand, its policy in trade with Africa compares poorly with the United States, China and, to some extent, Russia.

In 2020, a report – “The UK and Sub-Saharan Africa: prosperity, peace and development cooperation” – said several British governments had said that trade with Africa should get greater priority, but had “failed to make this a reality in the face of competing demands”.

During a House of Lords debate on trade with Africa, Lord Popat, of Harrow, a former trade envoy to Uganda, the Democratic Republic of Congo (DRC) and Rwanda, revisited the issue.

“We need to see Africa not as a charity, but as a place of opportunity. Politicians and diplomats believe in soft power and diplomacy… Coming from a business background, I believe in hard cash,” he said.

He added that UK exports to Africa had dwindled.

“Our exports to Africa were more than 30% not long ago. Today, they are less than 3%,” he said.

The UK generally runs at a trade deficit.

Popat urged the UK to join the race for critical minerals in Africa, such as lithium, to salvage the little that remained of its car manufacturing industry.

“We need access to foreign markets, particularly in Africa. Several car manufacturers have already left the UK due to significant challenges in sourcing batteries, which are critical to electric vehicle production. 

“The uncertainty in supply chains has made the UK less competitive. The shortage of essential materials, such as cobalt, much of which come from the DRC, has further strained the UK’s car manufacturers. 

“If we do not secure reliable supply chains for these materials, we will see a further exodus in the car industry,” he said.

Countries from both the east and west have followed China’s approach towards Africa, particularly, the Forum on China–Africa Cooperation.

READ | Phillip de Wet: China is getting ready to bypass South Africa on minerals – a little behind the USA

Even relatively small-time players, such as Italy, have ambitious plans for Africa.

In April this year, the UK-African Investment Summit was postponed, and there was no date for the next one.

The UK had missed the boat, said Popat.

“Other nations, such as China, India, the US, and the EU, have already signed deals with the DRC, while we are still working on a memorandum of understanding. We must expedite this process. I urge the minister to look into this as a matter of urgency,” he said.

Popat took credit for Arsenal’s Visit Rwanda deal, worth £30 million a year, which he said had allowed the Rwandan government to double the country’s tourism.

Lord Bruce, of Bennachie, noted that relations with Africa had been constrained, even through aid cuts. He said the UK should not separate trade and aid because both speak to Africa.

“I will link with the fact that aid has been drastically cut. I appreciate that we are focusing on trade, but the two are linked because the relationships grow together. 

“The cut in aid has had a very disruptive effect on our relationships with Africa. I am glad the previous government started to restore the balance, and I hope the new government will follow that through and help us to cement new relationships. 

He said:

The cancellation of the UK investment summit was disappointing, particularly at a time when the World Bank was making a very big engagement with Africa.

Lord Risby, who served as trade envoy to Algeria, urged the British government to deploy more trade-focused envoys and allocate more funds to embassies across Africa to catch up with their counterparts from Europe.

“The number of individuals devoted to trade promotion in our embassies and the budget allocated is frankly anaemic compared to that of our competitors,” he said.

Lord Swire suggested that a starting point for a reset of relations with Africa could start with the Commonwealth because it “presents a real opportunity and an open market for British businesses”.

Africa is home to 21 Commonwealth nations, which together have a GDP of over R19 trillion, and this translates to almost 40% of the continent’s population. 

The News24 Africa Desk is supported by the Hanns Seidel Foundation. The stories produced through the Africa Desk and the opinions and statements that may be contained herein do not reflect those of the Hanns Seidel Foundation.

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