Theresa May pledges Africa investment boost after Brexit

The prime minister confirmed that Britain would replicate a deal the EU currently has with six southern African nations.

Posted by Times News on Tuesday, 28th August 2018

Theresa May has announced plans to boost Britain’s investment in Africa after Brexit, during her first trip to the continent as prime minister.

In a speech in Cape Town, she pledged £4bn in support for African economies, to create jobs for young people. With the hope of further match investment from the private sector to come. The prime minister said she wanted to see “strong African economies that British companies can do business with” adding that the “integrated global economy means healthy African economies are good news for British people as well as African people”.

She also pledged a "fundamental shift" in aid spending to focus on long-term economic and security challenges rather than short-term poverty reduction.

She will also visit Nigeria and Kenya during the three-day trade mission.

On her way to South Africa, the prime minister played down warnings from the chancellor about the economic damage a no-deal Brexit could cause.

Talking to journalists on board RAF Voyager on Tuesday morning, Mrs May reiterated that she believed a no-deal Brexit was still better than a bad deal - adding no-deal "wouldn’t be the end of the world".

Last week Chancellor Philip Hammond warned in a letter that a no-deal Brexit could damage the economy.

Mrs May’s trip - which will see her meet the presidents of all three countries - aims to deepen economic and trade ties with growing African economies ahead of Britain leaving the EU in 2019.

Mrs May said she wanted the UK to overtake the US to become the G7’s biggest investor in Africa by 2022. She emphasised “that’s why I’m delighted that we will today confirm plans to carry over the European Union’s Economic Partnership Agreement with the Southern African Customs Union (SACU) and Mozambique once the EU’s deal no longer applies to the UK.

“As a Prime Minister who believes both in free markets and in nations and businesses acting in line with well-established rules and principles of conduct, I want to demonstrate to young Africans that their brightest future lies in a free and thriving private sector.”

Countries in the SACU agreement include Botswana, Lesotho, Namibia, South Africa and Swaziland, with Mozambique also included in the pact with the EU that the UK will take on.

Britain plans to take on all of the EU’s current trade deals after Brexit with agreement of the other country’s involved, but the announcement that the first has been locked in will be a boost to Ms May.

She had already let it be known that she was preparing to use the UK’s aid and development spending to support Britain’s private sector in making greater investment in the continent.

The prime minister said the “driving focus” of the UK’s development programme will be to ensure the governments in Africa have the “environment, knowledge, institutions and support” to private sector investment.

She promised to continue existing economic links based on the UK’s EU membership - including an EU-wide partnership with the Southern African Customs Union and Mozambique - after Brexit next year.

Promising an extra £4bn in direct UK government investment - which she expects to be matched by the private sector - she said while the UK could not match the "economic might" of some foreign investors - such as China or the US - it offered long-term opportunities of the "highest quality and breadth".

It came moments before she held a bilateral meeting with South African president Cyril Ramaphosa at which the agreement laying ground for the deal was to be set in stone.

The UK’s overseas aid budget totalled £13.9bn in 2017, an increase of £555m in 2016.

UK direct investment in Africa was £42.7bn in 2016, compared with £44.3bn from the US, £38bn from France and £31bn from China, according to data from the United Nations Conference on Trade and Development.

Editor: Jian Ping Sun

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