Mark Simmonds is a former Foreign Office Minister for Africa and Chairman of the Advisory Board of Invest Africa.
In little over a week, the Ukrainian invasion has dramatically transformed the geopolitical and economic status quo.
As major British corporations such as BP sever ties with Russia, and the Government implements wide-ranging sanctions that will limit our trade, the measures carried out to economically isolate Mosvow will inevitably have far-reaching consequences for the British economy.
At a time of economic uncertainty, it is therefore vital that the UK step up its efforts to secure trade deals with our international partners, and bolster our economic resilience.
Lost amidst this week’s news of the invasion was the announcement that there has already been some progress in this area. On Monday, the Government signed a comprehensive new agreement with New Zealand, which could boost trade by almost 60 per cent. This was a promising development in the post-Brexit drive to boost trade, particularly as it is the most comprehensive deal New Zealand has signed with a country other than Australia.
However, it is also something of an easy victory. The UK has always had close ties to New Zealand, and deals with much larger markets will still be needed to place us on a surer footing.
Post-Brexit, Britain has secured new trade agreements with several countries, including some in the Commonwealth, while also expanding to markets in Asia. The most significant of these being the UK-Japan Comprehensive Economic Partnership Agreement, signed in 2020.
The UK is in fact making good progress in Asia. Just last week the UK signed a new deal to boost digital trade with Singapore, and the Government is working hard to gain admittance to the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would significant open up Indo-Pacific trade to the UK.
While a promising path has been set for Britain’s future trade relations, one area the UK could do more is in Africa. Many countries on the African continent have become fast growing areas for high-tech innovation, which make them exciting candidates for trade and investment with the UK.
The Government has recently expressed a commitment to boosting trade with Africa. At the last UK-Africa summit, the Prime Minister stated that British businesses could help Africa prosper from the green industrial revolution, otherwise known as ‘Clean Green Initiative’.
However, while this is an important aspect of trade, the UK/Africa focus should be on far more than just green commerce, given the opportunities in financial services, tech, infrastructure, construction and healthcare.
In 2021 alone, Africa saw a $2 billion USD investment in start-ups, a 200 per cent increase in start-up investment since 2020. Investors have shown an enormous appetite for investing in new African businesses, with a wide range of promising mid-cap companies hungry for the financing they need to kickstart their growth. The UK’s financial service sector is perfectly placed to provide the support they require, which could significantly support and accelerate wider economic growth across Africa.
The growing interest in African businesses is reflected in the sharp increase in economic activity for a number of African nations. To take one example, Ghana has displayed a remarkable resilience to the economic effects of the pandemic, showing strong economic gains throughout the last year. Given its relative strength, Ghana is exactly the sort of African market Britain should be looking to partner with.
Ghana’s capital, Accra, is also home to the African Continental Free Trade Area (AfCFTA) and this is another area the UK should look to pursue. This trading bloc facilitates both intra-African trade, and inter-continental trade with Western counterparts. One of the largest free trade areas in the world, AfCFTA is predicted to significantly boost intra-African trade in the coming year. This growth in economic activity is something the UK could benefit from.
A strong trade deal with AfCFTA would significantly expand UK access to the African market as well as provide a strong springboard for greater engagement with individual countries on the continent.
At a time of heightened economic and geopolitical uncertainty, Britain’s economic resilience is more important than ever. Post-Brexit, the UK’s need for new trading partners was already a vital task, but now it is imperative that we step up our efforts and pursue all opportunities available to us. There have been many UK-Africa summits where the UK has pledged to increase ties with African nations, but now is the perfect time to focus on expanding our access to this market.
We have made good progress, but we know more than ever that the global economic picture can change in a week. Trade has to be a major focus now, our national security depends upon it.