Economy

The United Kingdom’s Race To Win Africa

I came across a post on social media where one of Nigeria’s leaders questioned the fact that Africa is playing in the race for global domination. One of his followers commented; “Africa is the table”. I totally agree with the commenter’s assertion. Britain is known for its rule of 23% of the earth’s population i.e. over 85 countries in her colonial portfolio.

Modern power and rule are however measured by different metrics especially foreign interests,  The UK, USA, and China are at the forefront of foreign investments in Africa. Investors, however, continue to face challenges in pricing assets in African markets as the lack of data and a formal market impact valuation methodology. Jan Groenewald of PwC Southern Africa highlights, “Ghana, Nigeria, Tanzania, Mauritius, and Zambia are considered the top five countries of choice outside of potential investors home markets”. This renewed interest in Africa is a result of an improved risk profile of African countries.

With the departure of the UK from the EU, it has made bold her interest in becoming Africa’s investment partner of choice birthing the UK-Africa Investment Summit. Held on the 20th of January, 2020, the summit was primarily a major step in unlocking and placing the UK at the forefront of foreign investments with its unique offer, becoming Africa’s investment partner of choice and benefiting people and businesses across the UK and Africa. Africa, a young continent bursting with opportunities has 8 out of 15 fastest growing economies in the world.

On the day of the summit, British and African firms announced £6.5 billion worth of commercial deals including:

  • A £25 million investment by Matalan in Egypt to launch 11 new shopping outlets.
  • GSK, who are investing a further £5 million in their operations in Egypt.
  • Diageo’s £167 million investment in Kenya and East Africa to support the sustainability of breweries.
  • The UK aims to be the biggest G7 investor in Africa by 2022 and is supporting Nigeria’s economic development through specialist expertise and financial products such as bonds.
    The UK is looking to provide £1 million through a new partnership with the Private Infrastructure Development Group (PIDG) to give countries like Nigeria the expertise they need to develop such local currency bonds.
    In addition, the UK is working on boosting future UK-Nigeria trading relations. For example, UK aid is supporting a new programme with the Nigeria Export Promotion Council to diversify Nigeria’s exports, help non-oil exporters comply with British Standards, and encourage British and Nigerian traders to work more closely together.

In a bid to show her sheer commitment to growth, the UK and Ghana Governments have formed the UK-Ghana Business Council (UKBC) co-chaired by China’s Vice President and UK ministers. The council is focused on fostering investment in 6 sectors; financial services, agro-processing, extractives, garments, digital, and pharmaceuticals. From a $1billion from the UK export credit finance listed on the London Stock exchange is the ‘Cedi bond’. Also, trade policy discussions were held to maintain Ghana’s duty-free and quota-free access to the UK in 2021 and beyond. This will protect Ghanaian jobs and support foreign investment.

For East African giant, Kenya, it is a strategic partnership between herself and the UK. A focus of both countries’ collective expertise, resources, and leadership on the priorities (bilateral, regional, and global) that will help deliver more prosperous, secure, and sustainable societies.
The strategic partnership will work across 5 pillars namely; mutual prosperity, security & stability, sustainable development, climate change, and people to people. These five pillars reflect the key challenges and opportunities of our time.

Kenya’s bobbling Fintech is of key interest to the UK and investors. The British High Commissioner to Kenya Jane Marriott said: “Kenya’s FinTech sector is strong, diverse and growing quickly. The innovators we met (at the summit) show the future of Kenya’s economic growth and I am proud that the UK is able to support their work, helping create growth, jobs, and the achievement of the Global Goals in partnership between our two countries”.
BFA global, the consultants in charge of the catalyst fund have asserted the importance of early-stage capital for tech companies. Amolo Ng’weno who is the BFA’s CEO says, “…Our mission at the Catalyst Fund is to accelerate these startups and strengthen the inclusive fintech ecosystem, and we look forward to working toward this goal with the support of UK Aid”.
The catalyst fund has gone on to graduate four innovators from its portfolio. They are:

  • Daniel Yu, Sokowatch
  • Ed Magema, Chipper Cash
  • Ted Pantone, Turaco
  • Fausto Marcigot, Paygo Energy

Andrew Stevenson, UK’s minister for Africa indicated optimism towards partnerships and growth, “Wherever I have been, I have found people receptive to the UK’s desire to build modern, future-focused, mutually beneficial partnerships for prosperity”, he stated.
Now that Brexit has happened, the prior Economic Partnership agreement Southern African Customs will now run effortlessly.

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