The UK will host the UK-Africa Investment Summit in London on 20 January.
In preparation for the summit, which is expected to be one of the largest investment summits worldwide, Britain’s Ambassador to Egypt Geoffrey Adams held a meeting on Monday with a number of British companies in Egypt.
Earlier last month, Adams said that British Prime Minister Boris Johnson had invited Egyptian President Abdel-Fattah Al-Sisi to attend the summit.
Using the hashtag InvestInAfrica, Adams tweeted, “Our goal: the UK as the partner of choice for Africa, and the investor with the biggest impact.”
The summit, according to the British government, will create new, lasting partnerships that will deliver more investment, jobs and growth. It will bring together UK and African business representatives, African leaders, international institutions and young entrepreneurs to create new partnerships.
In an interview with the Moroccan national news agency, Philip Parham, special envoy for the UK-Africa Investment Summit and the UK Commonwealth envoy, said last month that the concept of the summit was to “collaborate between the government and the private sector as it can be a good way to stimulate new sources of financing in a way that reduces government interference.
“Ultimately, African companies and governments must define the targeted sectors in which investment should be encouraged,” said Parham, expecting that the summit’s focus will be on manufacturing, infrastructure, agriculture and renewable energy sectors.
The International Monetary Fund estimates that Africa is home to eight of the world’s 15 fastest growing economies.
According to World Bank figures, six of the top 10 fastest growing economies in the world are located in Africa and that they require sustainable foundations to support such growth.
“Africa is where the future lies… it’s the youngest continent and that’s where the world needs to pay attention to shape the future,” Kaustubh Joshi, director of corporate banking at Standard Chartered Bank, said in a video published on the UK government website on the summit.
In the same video Kunbi Oguneye, an official at CognisSys, said, “By 2050 it [Africa] will have a net worth equal to India and China combined right now.”
Against the backdrop of Brexit, the UK government currently pursues a vision of a ‘Global Britain’ and along with UK investors is looking to Africa as an attractive destination for investment.
Moreover, the growing momentum over the African Continental Free Trade Area (ACFTA) is, for the UK, another encouraging factor which may attract UK investment. An agreement to establish a Continental Free Trade Area (CFTA) was signed in March 2018 by 44 African nations.
According to Britain’s Department for International Trade, UK-Africa trade was worth over £33 billion in 2018 and that about 2,000 British businesses currently operate in Africa.
During her visit to Africa in August 2018, Theresa May, former British prime minister, stated her intentions to take Britain past the US as the G7’s largest foreign direct investor in Africa by 2022.
The UK’s former international development secretary Penny Mordaunt said: “Africa’s emerging markets offer huge untapped potential to the UK. There is a massive shortage of investment, infrastructure and jobs in these markets, and the city of London is uniquely placed to help fill this gap while earning benefits for the UK economy.”
Over the past few years, there has been a growing interest in investing in Africa and the UK is not the only country interested in boosting its presence in the continent.
Throughout the last two years, the most notable investors in Africa have been China, Germany and France. Germany has dubbed its push as the African “Marshall Plan” while France is rolling out a “Digital Africa” initiative which will provide financial and digital resources for African startup entrepreneurs.
China, the continent’s biggest trading partner, has been even more robust. At the Forum on China-Africa Cooperation (FOCAC) in September 2018, President Xi Jinping pledged a second $60 billion commitment in the form of loans, aid and investment, with particular focus on “connective infrastructure”. This follows an initial $60 billion commitment announced in 2015, a sum gradually being invested in projects across the continent.
Russia also appeared recently on the same front with $12.5 billion worth of deals struck during the first ever Russia-Africa summit held in Sochi in October last year.
International Development Secretary Alok Sharma wrote in The Daily Telegraph on 1 January, “The UK-Africa Investment Summit will mark a step-up in our efforts to promote access to local currency finance, particularly for African economies, which will give UK-based investors more options to invest in support of Africa’s growth.”
Sharma said that the UK “will do all it can to help Africa attract sustainable investment and expand opportunities for British businesses”.
“I want,” Sharma said, “the UK to be the investment partner of choice for African nations, by creating new and lasting partnerships that benefit businesses and people in Africa and the UK alike.
“We want to encourage multilateral development banks to lend more in the local currency of the borrower. We will provide support to African countries and businesses to increase the number of first-time issues of local currency bonds, to help them build a track record and show they are financially viable,” Sharma added.
*A version of this article appears in print in the 16 January, 2020 edition of Al-Ahram Weekly under the title: Courting Africa