"Africa-Plus-One" Summit: What the UK can learn from Africa-China Trade and Investment
The United Kingdom is hosting its first Africa summit today (Jan. 20), welcoming around 15 heads of state to London.
The UK-Africa Investment Summit 2020 is the latest in a series of what are coming to be known as “Africa-Plus-One” summits, referring to the idea of several African countries plus one non-African country. The first summit of this kind kicked off with France back in 1972, followed by Japan in 1993, and the US tried one in 2014 during Obama’s presidency. Most recently even Russia had an Africa summit last October.
However, none of these have matched the scale and interest of the China-Africa summits, which kicked off 20 years ago. At the last one in 2018, twice as many African presidents attended the Beijing summit as attended the United Nations General Assembly in New York.
If other countries, including the UK, are interested in generating the kind of interest that Chinese summits produce, there are three important lessons they could learn from the world’s second largest economy’s evolving relationship with Africa.
The first lesson is that summits are only the shiny jewel-in-the-crown of years of hard work and engagement.
When China’s summits started in 2000, China’s various foreign ministers had been making trips to three to five African countries every year for 10 years. Since then, that tradition has continued, bolstered by fairly regular visits by the different Chinese presidents and premiers, meaning that in just one decade—over 2008-2018—China’s leaders visited 43 of the 55 African countries. In contrast, the UK’s leadership visited 23 countries, with huge time gaps. Before Theresa May’s infamous visit to South Africa, Nigeria and Kenya in 2018, the last time a UK prime minister had stepped foot on the continent was 2013.
Of course, by making so many visits, China risked being seen with corrupt leaders. However, what China gained from upstanding leaders was crucial. For instance, China got the chance to do normal government-to-government deals to help its companies feel safe when investing in African countries. Just look at the number of Bilateral Investment Treaties (BITs) that China has signed with Africa, which protect foreign investors against domestic risks.
Starting with Ghana in 1989, China already has 20 such treaties with African countries and 14 to come into force. In comparison, the UK, starting back in 1975 with Egypt, has just 19 BITs with six to come into force. China is now the 5th largest investor in Africa, just $3 billion behind the UK.
The second lesson from China—which arguably it has only recently started doing—is to listen carefully during summits. The UK’s summit will provide an opportunity for British leaders and business people to listen to African leaders who are, now more often than not, doing their best to shape a positive future for the continent. Indeed, the IMF predicts that six out of the world’s 10 fastest growing countries in 2020 will be in Africa.
The continent has 1.2 billion people, of whom 420 million are young and ready to work. The summit will provide an opportunity to carefully listen to their priorities—jobs, infrastructure, manufacturing, renewable energy—and properly digest what those priorities mean for the shape and direction of UK aid, for post-Brexit trade priorities, and for where UK investors put their stakes. British investors should be excited to hear these priorities first-hand.
Last but not least, the third lesson from China is to actively use the summits to ask African leaders a very specific question: “What can we do?”. Too often, and especially where the UK is concerned—the question is the other way around: telling Africans to make reforms to make their countries more attractive, to work up the World Bank’s controversial Doing Business Index, curb corruption, or meet environmental or social standards. These are important issues. But an equally, if not more important issue is, how can the UK government or UK investors change.
Why? Changing helps deliver results. Take trade. Back in 2000, when China held its first summit with Africa, China was importing just $5 billion worth of goods from Africa, and the UK $13 billion worth. By 2013, China had overtaken the UK.
In 2017, China imported 15 times more from Africa than it did in 2000—goods that accounted for three times the proportion of China’s overall trade than they did for the UK. There is a lot more that China can do for African trade, not least demanding more manufactured products from Africa, but how did it achieve this initial shift in scale? Not by China telling African countries to change, nor by using its aid budget (which, incidentally, is estimated to be a third the size of the UK’s), but by China taking responsibility and gradually cutting its own trade tariffs and making other internal reforms. Seeing and treating Africa as an equal partner.
But why bother? Why should the UK even be interested in summits with Africa, or learning lessons from China? Indeed, as mentioned earlier, China’s relationship with Africa is far from perfect.
The fact is, the UK’s aid, trade and investment patterns still reflect an old picture of Africa, a picture that remains rooted in a colonial and paternalistic mind-set of working with primarily agricultural societies and rural people with few skills, basket-cases requiring reward and punishment.
This is why, for years on end, raw materials—fuel, precious stones and fresh fruit—have been the top products exported from Africa to the UK. It is why a huge 51% of UK’s investment in Africa still goes into mining and quarrying, and 34% into financial services, versus other lucrative and high-return areas such as manufacturing, technology and even construction—sectors in which the UK invests elsewhere in the world. It is why, worried about human rights or corruption, the UK has, for instance, not invited Zimbabwe to the summit.
Yes, the African continent does have the largest number of poor people in the world—over 700 million. There are civil wars and humanitarian emergencies. But that is a limited aspect of what is happening and will happen on the continent.
Africa’s vision is to succeed China as the world’s next manufacturing hub, armed with favorable demographics. African countries want investment into value-added manufacturing—of the kind that turns a $5 billion-worth cocoa market into a $100 billion chocolate market –and into infrastructure and other public goods for their people, including growing and sophisticated middle-classes. International investors can support these visions and aspirations, including those from the UK.
Prior to today’s summit, the UK announced a goal to be Africa’s largest G7 investor by 2022. It wants to be Africa’s top development partner. This is an admirable goal, but will not be achieved or transformational unless the UK, like China, begins to align with Africa’s new, reimagined future. Today’s summit provides a key opportunity for the UK to catch up with China, and do even better, for the UK’s own long-term interest.