The Future of UK-Africa Relations: Global Britain or Status Quo?

By: Dele Bello-Williams & Kieran Davis

The decisive victory of the Conservative Party in the United Kingdom’s General Election on December 12th should, in theory, enable Prime Minister Boris Johnson to act more decisively in matters of state than any Prime Minister since Tony Blair. How he and his team of advisers respond to the fundamental tests of his premiership will no doubt unfold in the coming months after the ratification of the Brexit Agreement by the UK and EU parliaments; the negotiation of trade deals with the EU as well as other global partners will present particularly striking challenges for the new administration. For the UK-EU post Brexit trade agreements, thorny issues around fishing rights, financial services, free movements and more await both sides. The opportunity to craft new independent trade policies with other states do, in fact, offer the Prime Minister an opportunity to realign current UK trade consensus and engage in more bilateral trade with the nations of Africa for instance, as a counterbalance to the expected politically charged and contentious negotiations with the USA and our EU neighbours. Crafting landmark bilateral trade agreements more beneficial than default WTO terms with other major trading nations like China, India, Brazil amongst others can not be a walk over either.  The recent UK government sponsored UK-Africa Investment Summit 2020 is a step in the right direction.

Indeed, it is the stated goal of Boris Johnson and key figures in his government to promote the UK exit from the EU as a golden opportunity to pursue a so-called ‘Global Britain’ agenda of escalated trade with nations outside Europe. For example, Liz Truss, in her capacity as Secretary of State for International Trade, has been vocal in advocating that Britain dramatically improves its trading relationships with the member states of the Commonwealth. At a meeting of the bloc’s trade ministers in October 2019, Truss advocated Commonwealth member states use their influence over global supply chains and band together to speak with one voice at the World Trade Organisation. Africa provides the largest single delegation to the Commonwealth (19 of 53 member states). Thus, if the UK government’s dreams of a Commonwealth of Nations more united on trade are to be realised, increased trade engagement with African countries, especially those that are members of the Commonwealth, will be essential.

UK-Africa trade relations in context

In recent years, the UK’s trading relationship with Africa has declined to such a degree that, in terms of goods exported to the continent, the UK has now been usurped by Turkey, the Netherlands and Spain. All these countries accounted for a greater proportion of Africa’s total imports in 2018 than the 2% contributed by the UK.

Even more grave testimony to an anaemic UK presence in African markets is offered via comparisons with French trade policy on the continent. At the surface level, a combination of economic, historical and environmental factors suggest that the UK and France should be operating at comparable levels of trading relations with African nations: the similar size of their economies (they are the 5th and 6th largest economies in the world, respectively by GDP; their current, considerable influence on trade negotiations conducted by the EU; and, critically, their previous hegemony over vast swathes of Africa in their previous guises as imperial rulers. As a result of the EU’s status as Africa’s main trade partner, France and the UK ought both to be ideally positioned to derive significant benefits from trade with the continent.

Despite these similarities, the French conduct a vastly superior trade policy on the continent than the UK. France exported €26 billion in goods to Africa in 2018, almost three times as high as the UK (€9.4 billion); this represented 12.9% of France’s total goods exports outside the EU in 2018, with the UK’s figure representing only 4.3% of its exports of goods outside of the EU in the same period.

As well as engaging in trade with Africa to a dramatically lower extent than its nearest neighbour across the English Channel, the UK also suffers in comparison to France when examining the respective balances of trade in goods with Africa. In 2018, France recorded a trade surplus of over €1 billion with the continent. By contrast, arising from the dramatically lower volume of trade, the UK recorded a goods trade deficit of €7 billion with the nations of Africa in the same year. Trading statistics, especially when observed from a comparison of the UK and France, illustrate a moribund UK-Africa trading relationship, unsuitable for an economy of Britain’s size and historical connections to the continent.

The issues with current UK trade policy on the continent

In spite of their similar past relationship with Africa, as well as their current prominence within EU trade negotiations apparatus, France and the UK have trodden diverging paths regarding trade with African countries. The relative balance of trade comparisons with France suggest that the UK has a lot to learn from France on how to do business more effectively Africa.

An examination of the UK’s current trading relationship with Africa reveals a foundational problem in British trade policy there: it is overwhelmingly focused on the extraction and harvesting of primary goods, in an era where African economies are rapidly transitioning to focus on secondary and tertiary sectors such as in the digital media and technology related goods & services, where the UK possesses some comparative advantages. UK trade policy with Africa in its current form is obsolete.

The UK’s major continental trading relationships share a single theme: they are all overwhelmingly predicated on the export of primary resources and agricultural goods to Britain. Nigeria, Britain’s largest trading partner in West Africa, exported £2.43 billion of goods to the UK in 2018; almost exclusively export of crude oil. Similarly, the two largest exports of South Africa to the UK in 2018 were non-ferrous metals and fruits or vegetables; combined, these categories constituted almost £2 billion of South Africa’s total £3.47 billion of exports to the UK.

Wherever Britain conducts significant trade in Africa, this theme is repeated. Well over half of exports that Kenya, the UK’s largest East African trading partner provide, are primary agricultural goods (tea, fruits and vegetables). Although  trade in services with the continent, where Britain achieved a total surplus of around £3.5 billion, does display more constructive engagements, this is not enough to offset the inevitable conclusion that the UK’s overall trading approach to Africa is in need of an overhaul

British trade policy on the continent appears not only lax and unimaginative in nature, but appears aimed at perpetuating a vicious cycle, wherein African nations are only courted as trading partners for the export of primary resources. This prevents diversification of their economies, and leaves the fortunes of these countries and their citizens at the whim of global commodity markets.  Simultaneously, the UK has lost out essential connections and resources derivable from first mover advantages in a new Africa trading landscape to the likes of China, Turkey and France.

A New Direction for UK-Africa Trade Relations

As it stands, the UK has not demonstrated enough vigour and commitment to improving its bilateral trade relationships with key trading partners in the African continent post Brexit. The Department for International Trade (DIT) has taken some steps to maintain trading ties at their current levels with several African nations and trade blocs; the government announced the successful negotiation of continuity trade deals with, among others, SACU+M (a customs union of Southern African countries including South Africa and Botswana) and Morocco. Given the relative urgency and competitive position with other major trading nations to sign bilateral and regional trade agreements in Africa, more ambition on the parts of UK Trade Negotiators is required.

The UK has thus far, been unable to complete continuity trade deals with some of its biggest trading partners on the continent; negotiations with Nigeria, Kenya and Algeria (Britain’s foremost trading partners in West, East and North Africa respectively) have not yet progressed to the stage of continuity deals. A wholesale re-assessment of UK-Africa trade policy approaches is required.  The huge size of Britain’s Aid commitments to Africa in itself offer ‘space’ for UK trade negotiators to craft out mutually beneficial arrangements viz-a-viz its closest global competitors.

It is also time for UK policy makers to take seriously the burgeoning youth populations of Africa. The pattern of demand and supply relationships in the continent is fast changing. With increased access to the world wide web, higher disposable incomes, dramatic increases in access to telecommunications and banking services, Africa’s youth population are a proven post Brexit replacement market for UK industry, going forward.  The UK may do very well to redirect some Aid budget investments to resolving some of the pervasive supply side administrative and structural bottlenecks that make selling direct to these fast growing demography difficult for UK enterprises. On top of the obvious economic benefits of more fruitful trading relationships, such a move could reduce the burden on the UK’s foreign aid budget.

Dele Bello-Williams, Executive Director (NIAS)
Kieran Davis, Research Assistant (NIAS)