The UK should pursue a new free trade relationship with Africa in a bid to capitalise on its exit from the European Union, according to a British parliamentary inquiry.
The panel of British and African experts called on the UK government to launch a partnership of “development, trade and investment” focused on slashing trade costs, enhancing productivity and boosting growth on the continent.
The value of British foreign direct investment (FDI) in Africa was £42.5bn ($51.7bn) in 2014, according to the Office for National Statistics (ONS), the UK’s national statistical body. Meanwhile, African investment in the UK stood at £3bn ($3.7bn) during the same year.
The inquiry members said that while Brexit poses short-term challenges for the UK, it also provides opportunities to implement a pro-development trade policy with Africa based on the best facets of US, Canadian and EU deals. Supporters of Brexit contend that the United Kingdom will be able to pursue more profitable trade deals once it has left the bloc, while opponents argue that it is a fantasy to assume the UK will secure better terms on its own.
Launched by the All-Party Parliamentary Group for Trade Out of Poverty, the inquiry also called on Prime Minister Theresa May to appoint a dedicated Special Envoy to engage with the continent on free trade issues and coordinate diverse activities between the UK government departments, investment programmes and African representatives.
“All African leaders are anxious to ensure that the UK Government moves quickly to prepare for possible disruptions of African trade to the UK. However, Brexit also presents a big prize – the opportunity for the UK to lead the world in structuring a pro-development trade policy with Africa, becoming a model for other OECD countries to follow,” said Ali Mufuruki, the Tanzanian entrepreneur and co-chair of the Inquiry Committee.
International development secretary Priti Patel – a high profile Brexit campaigner – will this week be the first of Theresa May’s cabinet ministers to visit Africa when she travels to Kenya for a trip focused on boosting trade ties. Patel is known to be a critic of the UK’s approach to aid, which she has previously derided as poorly targeted and wasteful. Yet she has also called for more investment and trade with poor countries.
The experts commended the existing African Free Trade Initiative, established by former Prime Minister David Cameron during a 2011 trip to Nigeria and South Africa, for cutting tariffs and facilitating intra-African trade by upgrading ports and streamlining border crossings.
Last week, Southern African nations began implementation of a new trade deal with the European Union after a decade of negotiations. The Economic Partnership Agreement is designed to give members reduced tariff access to the European market while gradually opening up fragile Southern African markets to European competition.