The UK has launched a new plan to ramp up infrastructure investment in Africa and other developing countries in a bid open up overseas markets to British trade and companies in a post-Brexit era.
On a recent trip to Ethiopia, Britain’s new international development secretary Alok Sharma announced plans for a new commission to mobilise private sector investment for bankable infrastructure projects in developing countries.
During his two-day visit, Sharma allocated £10m of infrastructure investments to East Africa’s fastest growing economy, Ethiopia. The funds were earmarked for clean energy and sustainable infrastructure projects in Ethiopian cities, the Department of International Development (DFID) said.
As one of Africa’s fastest growing economies, Ethiopia has “huge potential for future trade with the UK,” DFID added.
The new commission aims to mine the expertise of UK and international business leaders in order to scale up infrastructure development in Africa and other emerging economies, according to DFID.
Deploying a team of experts with experience in infrastructure development in Africa and Asia will help mitigate the risks of infrastructure projects and make such ventures more attractive to foreign investors, especially those in the City of London, Sharma said.
“The focus will be to help make investment in infrastructure in developing countries more attractive to businesses and investors,” the department said.
African economies on the continent currently face a £140 billion annual infrastructure gap, which requires urgent private sector investment, the African Development Fund says.
The Commission hopes to facilitate private equity support to build infrastructure projects and create better trading partners for Britain, Sharma said.
“This Commission will aim to turbo-charge investment in green, sustainable infrastructure, leading to more jobs, better access to basic services and opportunities for businesses, creating the UK’s future trading partners.”
Aid for trade
The UK approved £228m in foreign aid to Ethiopia in the 2019/2020 budget, while the country’s import and export volumes are expected to at least double over the next 10 years.
Sharma also allocated an additional £30 million in funding to provide training and mentoring to up to 10,000 budding female entrepreneurs and business women across Africa to hone their business management skills in marketing, financial and business planning.
The aid will also leverage partnerships with up to 30 banks across the continent to help incentivise lending and lower borrowing rates for thousands of women.
Transforming womens’ job opportunities and boosting African economies “will help countries become our trading partners and build their future beyond aid,” the DFID said.
Sharma also attended talks with Ethiopia’s Prime Minister Abiy Ahmed, the Ethiopian finance minister and British investors.
The visit comes ahead of the UK-Africa Investment Summit in 2020 aimed at promoting trade UK-African business and trade as the UK plans to exit the EU.