Nigerian central bank moves to push banks to increase lending will be a damp squib, meaning an interest-rate cut is in prospect, says John Ashbourne, senior emerging markets economist at Capital Economics in London.
UK trade commissioner: ‘Post-Brexit Britain will be Africa’s Largest G7 investor’
The UK’s trade commissioner for Africa, Emma Wade-Smith, says Brexit is an opportunity not a threat, with Britain poised to improve on existing EU trade agreements and invest billions in African growth.
“By 2022, our ambition is that the UK will be the largest G7 investor in Africa, with our private sector companies taking the lead in investing the billions that will see African economies growing by trillions,” Wade-Smith told The Africa Report in an interview, echoing Prime Minister Theresa May’s target set last year.
Trade between Africa and the UK is growing, says Wade-Smith, a former diplomat who was appointed Her Majesty’s Trade Commissioner for Africa in June 2018. She has been based in South Africa since 2016, and set up the Department for International Trade’s (DIT) pan-African regional trade team in April 2017.
UK-Africa trade increased 7% to £33.1bn in 2018
Citing figures from the Office for National Statistics (ONS), she says UK-Africa trade increased 7% to £33.1bn in 2018. On a visit to Africa in April, foreign secretary Jeremy Hunt announced British business deals in Ghana and Nigeria worth £82m ($108m).
Business as usual
Wade-Smith disagrees with the thesis that trade with Africa will suffer as a result of a contraction in the post-Brexit UK economy. In Britain’s defence, she points to nine straight years of British economic growth. Sceptics, however, will question whether the growth can continue once Britain leaves the European Union, which is the world’s largest free-trade zone.
After two postponements, the date for the UK to leave the EU (“Brexit”) is now set for 31 October. Until then, “we remain a full member of the European Union and therefore do not have the ability to set our own trade policy,” Wade-Smith says.
The City of London will play an increasingly large role in financing Africa’s growth over the coming years, Wade-Smith argues, citing the example of Ghana’s Quantum Terminals, which in 2018 listed bonds on the London Stock Exchange.
Industries such as Kenyan floriculture, Wade-Smith says, will be unaffected by Brexit. Current sanitary standards for food, animal and plant products will be maintained, she says. “The Withdrawal Act will convert EU law into UK law as it applies to these products, with the amendments necessary to make them operable.”
“Replicating the EPAs is not the limit of the UK Government’s ambition.
The UK government plans to put in place a Trade Preference Scheme for approximately 70 developing countries, which will provide the same level of access as the current EU Generalised Scheme of Preferences (GSP), Wade-Smith says. If any of the UK Economic Partnership Agreements (EPAs) are not agreed in time, some EPA partners will be eligible for some preferential access under this scheme, she adds.
“We are working hard to ensure continuity of trading arrangements as the UK leaves the EU, so that businesses will be able to continue to trade as they do currently,” she says. The UK has already signed an EPA with Madagascar, Mauritius, Seychelles and Zimbabwe.
Despite this planned continuity of trading arrangements, Wade-Smith sees an African jackpot that has eluded the EU and the rest of the G7, but which Britain alone will be able to seize.
“Replicating the EPAs is not the limit of the UK Government’s ambition. Following our exit from the EU, we will look to see how we can improve upon these trade arrangements, using the structured dialogues provided for within the EPAs.”
The UK government is “determined to ensure that no deal involving UK companies fails because of lack of finance,” Wade-Smith says. UK Export Finance has over £26bn of export credit available to support deals in Africa involving UK companies, she says.
According to Wade-Smith, the UK’s development finance institution, the CDC, will continue to invest “billions” over the coming years, with a focus on key industries and job creation. The CDC will be “helping to inspire the UK’s private sector to invest the billions that will see African economies grow by trillions”, she reiterates.