Some thoughts on Theresa May’s first visit to Africa

 
IMG_6289.jpg

The PM’s first visit to Africa is an important opportunity for her to begin to get to know the continent, which she rightly recognises as being important for the future of our planet. I hope that as she travels and meets people over the next few days she is able to take the time she needs to listen as well as talk.

In her Cape Town speech she set out some good aspirations for how she wants the UK and Africa to develop a true partnership. There was a commitment to work together in a responsible way to achieve common goals. But we all know that to be meaningful, a partnership requires a frank assessment of the mistakes, needs and responsibilities of each side and action that matches the fine words. 

So what might the PM hear in South Africa, Nigeria and Kenya? She will no doubt hear excitement about the continent’s ambitious, sometimes painful, possibly transformational process of developing a continental Free Trade Area. She will also likely find countries worried about future currency instability due to Brexit as well as concern about what an economic downturn in the UK would mean for exporters. There will certainly be confusion about what the terms of the UK’s final deal with the EU will mean for supply chains which touch the continent. 

In each country the PM visits she will see unique trade challenges – most of which have been triggered by globalisation, which she rightly recognises has not brought benefits to all.

The UK and Southern African countries have issued a Joint Statement of their intention to replicate the EU’s EPA once the UK leaves the EU, but details are clearly still being worked out. South Africa has (rightly in our view) indicated that it will seek some modifications or improvements to the deal. This makes a possible March 2019 deadline (in the case of no deal/no transition) look ambitious. Will the UK agree a fall-back position that could work for all the countries of the region, or will we default to the age-old tactic of threatening tariff re-imposition to secure agreement?

Today the PM is in Nigeria - the powerhouse of the West African region - which has proved a tricky trade customer. It has consistently refused to sign the proposed west African EPA preferring instead to face a re-imposition of certain tariffs in order to be able to shield its own business and support industrialisation. This has left other West African countries in a dilemma, with both Ghana and Ivory Coast signing ‘stepping stone’ deals to secure market access to the EU, undermining the region’s nascent customs union.

Countries in the West African region now have no less than four separate trading systems with the EU, none of which are compatible with each other and all of which the UK is proposing to copy. Perhaps instead the UK could work together with our partners in West Africa to propose a future trading arrangement which respects their regional integration and development priorities rather than repeating the EU’s mistakes?

And in Kenya, Mrs May will find that the EU has created similar tensions. Kenya feels compelled to sign the EU’s proposed EPA to maintain access for its green beans and flower exports. But poorer countries in the region such as Tanzania do not want to have to open their markets to the EU. This impasse is contributing to souring relations in the East African Community, and this is a problem that the UK is planning to replicate rather than tackle – a clear missed opportunity.

The PM clearly has a vision where jobs will be created by the private sector. We support this, but with some important caveats.

Jobs created in global value chains are often precarious, dangerous, low-paid and are sometimes exploitative, particularly of cheap female labour. They have to be matched by robust regulation of supply chain practices and resources for effective labour rights enforcement. Supporting the development of strong regulatory institutions and organisations that can represent workers would be a good investment of UK development assistance.

Despite the PM’s assertions, she would not have to travel far from Cape Town, Abuja or Nairobi to meet communities who have been negatively impacted by UK investment – particularly in the extractives sector. To make sure UK investment contributes to development there needs to be proper legal liability for companies that cause harm and investment frameworks that ensure responsibilities go alongside privileges.

Throughout the continent the PM is likely to find small businesses who are struggling to access regional, let alone international markets. Their priorities are to build or grow good products and move into the more lucrative value-added processing such as packaging, canning or finishing the products. This is where the UK should be directing its development assistance. Large multinationals that extract value out of the continent while paying a pittance for raw materials, are not in need of aid, nor should they be recipients of it.

So on her return, when she has had time to think through what she has heard I hope that the PM will:

  • Direct officials to work with our trading partners to devise simple solutions that will continue to provide all African countries with market access, but in ways that support regional cooperation and which respect countries’ industrialisation strategies;
  • Take the necessary steps to ensure that UK investment is always responsible and contributes to building national skills and capacity;
  • Direct aid towards the small-scale private sector, farmer-led businesses and the informal sector;
  • Make sure that development assistance and trade policy do not contradict each other, but work hand in hand;
  • Find ways to continue to listen and learn in a spirit of cooperation and respect.

Liz May is Director of Policy and Advocacy at Traidcraft Exchange. @LizMay12

 
Nancy Demuth