Is Trade for Aid such a bad thing? Do we want to be a charity case or a business partner?
Joel Popoola, the Chair IoD Africa Special Interest Group a task force aiming to improve trading ties between Africa and the United Kingdom, responds to the newly published International Trade Strategy.
The UK government’s new International Trade Strategy directly links Britain’s aid budget to trade deals – and as a result has been criticised for offering “aid for trade” and accused of putting “politics before poverty” and being “a double whammy against the world’s poor”.
One opposition politician called the policy “short-sighted and wrong” – another claimed “the UK’s proud reputation as a development superpower has been comprehensively trashed.”
As British, I think things are a little more nuanced.
As Africans we must ask ourselves – what do we want from overseas aid? Do we want to be a charity case or a business partner?
As a business leader, I know what I prefer the sound of.
One path sees nations in Africa, with something of a perpetual colonial status, eternally dependent on handouts from former rulers. The other sees us raised up – and raising ourselves up – to the status of equals.
At the heart of the strategy is a decision that the British government’s contributions to multilateral organisations will decrease in favour of bilateral partnerships.
This means favouring individual aid packages aimed at, in the words of the strategy, “supporting partner countries to grow their economies sustainably” through investment “in particular for cleaner and more reliable infrastructure.”
Does anyone deny that we need that sort of infrastructural investment if we are to realise our potential on the international stage? Much of Africa is crying out for investment in power grids, transport networks and broadband – just look at the epidemic of power cuts which has recently plagued much of Nigeria’s economic centres.
Buying British continues to be something of a status symbol in parts of Africa. We should not fear it being a condition for securing that investment.
The strategy is clear that aid is not intended to be entirely altruistic. This approach is designed to “deliver for people here in the UK – investments abroad will generate export opportunities in the UK, creating jobs right across the country”.
But that does not mean that the approach is entirely without merit for continents like Africa. Of course there is a huge amount of self-interest in the strategy. But this self-interest is mutual. Job creation, transport networks, power grids, renewable energy projects and digital infrastructure are the foundations of future growth across Africa. And this is a path to that growth.
Trade helps countries in continents like outs to grow our economies, raise incomes, create jobs and lift ourselves –and our citizens – out of poverty.
This is a more sustainable and desirable outcome than relying on handouts.
In the short term, I cannot deny that I have anxieties about the strategy’s implementation – shared threats such as Covid-19, climate change and civil disorder, in the case of my own Nigeria from Islamist Militants, demean a coordinated international response.
In its implementation, the strategy must balance infrastructural development with social projects to promote gender equality, education, democracy and other core values.
But in the longer term the approach is consistent with the British government’s support for the African Continent Free Trade Area – which as the world’s largest free trade area, has the potential to boost our entire continent’s economic growth by driving industrialisation, generating jobs and delivering prosperity across the continent.
The UK government has already negotiated a number of free trade agreements with African countries and trading blocs since it left the European Union, creating tariff and duty free trade between Britain and 30 African nations – this means significant opportunities for African consumers and companies, not least in our 24 English speaking countries.
As the head of the Institute of Director’s Special Interest Group for Africa, I want African and the UK alike to benefit from stronger trading relationships.
One UK parliamentary report recently noted that UK-Africa trade has ‘flat-lined’ –accounting for just 2.5% of all UK trade. But before Covid-19 the world’s five fastest-growing economies were all African, and regional leaders like South Africa and Nigeria are likely to become superpowers of the global economy as we move towards the second half of this century. More needs to be done on both sides to take advantage of the opportunities on offer. This strategy is a valuable starting point.
Critics of the strategy also demonstrate a certain naiveté when it comes to which nations are the most self-interested when it comes to international aid.
The UK government has stated that the strategy is designed to challenge “malign actors” who use “patronage, investment and debt as a form of economic coercion and political power”.
These “malign actors” provided Africa’s nations with development funding – but saddled them with debt which comes with political strings attached.
Britain’s world-leading expertise in finance, clean energy and infrastructure – and it’s historic and enduring links with Africa – make it the obvious choice as a partner for mutual prosperity.
Its motivations may be influenced by self-interest – but they are a good deal more altruistic than other nations.
Joel Popoola is the Chair of the Institute of Directors Special Interest Group for Africa which words to stimulate business opportunities, increase networking and grow awareness of British businesses in Africa – and African businesses in Britain.
This article is written in a personal capacity, any views do not reflect the position of the IoD.