During his recent speech at the House of Lords, Lord Sheikh emphasized his interest to promote more business between the United Kingdom and overseas countries. He stated that this will be one of the driving forces of UK’s continued recovery. Ultimately, it will help UK to balance its budget and reduce its national debt. He also talked of his personal affinity with Africa, as he was born in Kenya and spent his formative years in Uganda.
Lord Sheikh has travelled across the continent, spoken at various meetings, met African businessmen and has first-hand knowledge of what Africa has to offer. Africa’s continent’s GDP is expected to grow by 4.5% this year and 5% next year. Furthermore, many African states have been members of the much-admired “7% club” in recent years. A number of economists have predicted that Africa could account for 7% of the global economy by 2040. Africa has a huge land area and an abundance of untapped natural resources. These include substantial reserves of oil, minerals, food and natural resources, and will undoubtedly serve much of the world’s demands in the future, he said.
Africa offers so much but, like any other economy, it has its challenges and vulnerabilities. Africa has realised these challenges and is already working hard to address them. At the moment, a conference is being held in South Africa where one of the subjects being discussed is the growth of the continent’s economy and achieving prosperity.
Recently, Lord Sheikh hosted and spoke at an event for the Economic Community of West African States, a body of 15 West African countries with a vision of collective self-sufficiency for their member states. They are creating an integrated region with mutual access to resources and investment opportunities.
Lord Sheikh also met African businessmen who are very keen to promote trade between the UK and Ghana. It is worthwhile to note that UK is accelerating its trade with Ghana, as it is a stable country with good governance. Similarly, last year, he spoke at an event for the Southern African Development Community. It is a great example of fluid multilateral co-operation to encourage economic growth. It is investing in projects aimed at improving infrastructure in the region.
At a recent dinner held by the Association for African Owned Enterprises, Lord Sheikh was awarded the lifetime achievement award for his involvement in trade with Africa. In 2014, during his speech at the Ugandan investment Convention in London, he said that UK is Uganda’s largest foreign direct investor with investment worth over 1.1billion dollars. Since UK has historical ties with Uganda, he believes that if the ties are strengthened further, it will create more business links and opportunities for the two countries.
African countries are also moving quickly to improve their investment climate and conditions for doing business. Last year, a World Bank report found that Africa comprises five of the top 10 places in the world with the most reforms making it easier to do business. The same report found that since 2005, all African countries have improved the business regulatory environment for small and medium-sized businesses. Foreign direct investment is gradually moving away from mineral resources into consumer goods and services. This is in response to the needs of a growing middle class. Manufactured goods now constitute nearly 40% of intra- African exports. These changes present an unprecedented opportunity for overseas businesses to get involved. UK must capitalise now before it is too late.
The UK’s current engagement with Africa is based too heavily on aid and long-established commodity-based businesses. Lord Sheikh says that new British companies need to enter the African market, and that the continent should be helped to grow rather than simply be supported with aid contributions. This in turn will help the UK to grow further as well.
The UK already has a natural advantage with the significant African Diaspora settled here. Businesses should look to engage with these people in seeking to connect with Africa for the first time. There is of course a young and hungry new workforce in Africa, ready for foreign investors to utilise. Indeed, it is estimated that Africa’s share of the global workforce will increase from 12% to 23% by 2050. The United Kingdom must do more to help unlock this potential. Lord Sheikh stated that as someone who has a business as well as an academic background, he would like to see more partnerships between British and African universities. UK must help to build practical vocational programmes and increase access to secondary and further education. Young Africans need to develop new skills in order to properly navigate what is a rapidly changing career landscape for them.
Lord Sheikh is a fervent supporter of trade through Commonwealth. It is in Britain’s economic interests to utilise what is essentially a ready-made trading bloc that covers a third of the world’s population. Many African countries are part of the Commonwealth, including Ghana, Kenya, South Africa, Uganda, and Africa’s largest economy, Nigeria. He was pleased to note the Government’s recent enthusiasm for working with the new Commonwealth Enterprise and Investment Council.
He advised that UK must surge ahead of the rest of Europe, and indeed the rest of the world. It is also crucial that the relevant people and bodies work together in order to maximise UK’s trade efforts. It must pool its talents as much as possible. The expertise from the Foreign Office, the Department for International Development, UK Trade & Investment and the private sector must all be combined and work in tandem to accelerate the trade activities.
The Lord further continued that UK high commissions and embassies in African countries can take an active role in notifying relevant companies in the UK of the opportunities and tenders available for bidding in the countries where they serve. Trade exhibitions and visits of delegations should be arranged to suitable African countries.
Also the embassies and high commissions of African countries should prepare details of the opportunities available in their countries and provide them to interested parties in the UK.
Africa is made up of 54 countries and each does business in a slightly different way. Local knowledge will help shape investment models that present African ventures to reflect their true commercial value. The UK will be left behind if it does not address its international trade engagement strategies with Africa. For future growth, and to see new UK companies enter the African markets, there is a need to look at individual sectors and have more of a business approach to engagement with Africa.
Particular areas that UK companies can look at are construction, infrastructure, manufacturing, minerals, IT, agriculture, the financial services sector and export of goods from the UK.
Lord Sheikh urged that the time to act is now and businesses at home must connect with the overseas markets of the future. From more overseas trade will come growth, and from growth will come prosperity and stability. UK has unique services and products which it can offer to Africa. No other continent offers such a unique mix of opportunities and challenges. Indeed, Lord Sheikh believes that the opportunities far outweigh the challenges.