With the United Kingdom’s departure from the European Union certain, it is no surprise that the UK is currently on a charm offensive, to deepen and strengthen its global partnerships. Specifically, London has intimated that the expansion of its trading partners is key to its trade agenda, with Africa ranking high.
Evidently, with 16% of the world’s population, but only 3% of global goods trade, Africa is heralded as containing untapped trade potential.
In support of its new focus on trade partnerships with the African continent, Boris Johnson’s government has earmarked an additional GBP 4 Billion in British trade and investment support for Africa, with an expectation that a similar amount will be matched by the private sector. Through this, the UK has signalled a shift in its trade relationships with Africa.
Critics have however expressed concern that the UK tends to prioritise financial aid targeted at eradicating poverty in the African continent – financial aid that in the long run does not concretely benefit the continent. With the Brexit all but concluded, the UK hopes to focus on long-term economic growth and development of the African continent, with the expectation that a rapidly industrialising Africa will stand to plug any potential trade deficit resultant of the UK’s exit from the EU.
A rapidly industrialising Africa is currently experiencing an existential identity shift by rejecting the label ‘dark continent’ and re-imagining itself as a global player in the international context. Be it on matters trade, politics or security, the message Africa is currently sending to the world is that it is open for business.
This is evidenced by major changes across Africa, with traditionally inward-looking African nations such as Ethiopia and Djibouti opening up for trade and partnerships. Similarly, political, governance and enterprise reform measures Zimbabwe, South Africa and indeed Kenya can be viewed as a concerted effort to create an enabling, modern and globally competitive business environment in Africa.
These have not gone unnoticed. With abundant untapped natural resources, a growing, educated and skilled middle class and rising innovative practices, multinational entities have flocked to set up shop in Africa in recent years. Given, that, Chinese, American, Indian and other European businesses and investors are seeking to partner with Africa, the UK would need to differentiate herself from the lot in order to justify a protected trade relationship with the African continent.
Africa’s time is now.
Karen Kandie – MD IDB Capital
