14 Sep After The Dance: Making the most of business opportunities from the PM’s Africa visit
Although the PM’s recent Africa visit was largely misunderstood or patronized by the UK media, it represented an important and welcome indication of fresh ambitious thinking in delivering HMG support to securing post-Brexit trade growth. But it also raised serious questions as to whether the UK is fully prepared to compete for the opportunities Africa represents to UK business.
Government support for trade in these markets is important. While not all African states are command economies, the state is a major actor, and government to government engagement is critical for UK export success. Yet smart coordination with the private sector is key, and the Prime Minister’s Africa trip offered a compelling example of the limitations of current arrangements, and the urgent need to improve them if the UK is to compete at the level it deserves in these markets post-Brexit.
Before the critique the positives: a ‘feel -good’ change of atmosphere; a get-away from the endless grind of Brexit; a visit to a vibrant and growing part of the world about which Brits feel very warm, where there are strong connections and to which they give generously; and African countries lining up to sign deals with the UK (even though the ‘trade agreements’ signed were actually contingent continuity agreements). Plus, the doughty part of ‘brand May’ did well. Whilst the PM’s dance moves were never going to get a ‘ten from Len’, most TV viewers will have given her credit for giving it a go.
Away from the cameras, though, in the nitty-gritty detail of the preparation and delivery of the UK trade ‘offer’, there were gaps of the sort that need to be remedied if trade missions are to go beyond the photo-op and new trade agreements to be more than scraps of paper for political show.
Whilst the list of the business delegation accompanying the PM included some exceptional companies and very impressive people, it did not represent the scale or breadth of UK PLC many African counterparts expected. The UK is seen by its current and future trading partners as excelling at fashion, the creative industries, the professions, education, expertise in infrastructure, healthcare and medtech, finance and fintech. Many of these represent major opportunities with Africa. So where were the likes of the British Fashion Council, the leading established UK law firms, our leading healthcare sector, the representatives of our world-respected water, transport and infrastructure consultants? Sure, The City was represented by the Lord Mayor, banking has the impressive Bill Winters and names like Mott Macdonald and JCB flew a flag for infrastructure, but this was hardly a knock- out delegation of the full range of impressive British expertise, a fact commented on by the South African business people asked to travel down from, mainly, Johannesburg, to Cape Town.
Doubtless there will be reasons as to why British business was thinly represented; and they will sound fair. The problem is that last-minute, cobbled together trade delegations have become too regular a feature of UK trade promotion and excuses are not what the host country are interested in. Foreign officials tell us they want a focused and compelling trade ‘offer’ based on their needs as a nation. That offer needs to be imaginatively and enthusiastically presented by their visitors based on self- evident, relevant competence. When the African countries visited by the PM compared the UK offer they saw on the PM’s trip with what they have been presented in Beijing the difference may be stark.
In common with so many parts of the world, the undoubted ability of our embassies to position the UK well with the host country needs an equally persuasive, very focused UK trade offer. The credibility of that offer is based on close prior HMG consultation with the private sector to identify key target areas for the host nation. This then needs to be translated into a well thought through plan of engagement, with emphatic HMG financing support where the private sector can’t provide it. There are promising signs that this sort of focus is beginning to be included, not least with the DIT appointment of an impressive private sector trade minister, as well as trade commissioners for key export regions around the world and an export credit agency, (UK Export Finance) with £50bn of financing clout and a good team. Yet the challenge remains of generating effective, consistent, and early, strategic HMG engagement with the UK private sector.
There are two main steps that need to be taken to ensure future high level trade missions lead to greater trade wins for the UK.
First, more power to and investment in HMG missions in-country. FCO and DIT people on the ground are best placed to spot opportunities. Yet due to FCO cuts many missions are visibly starved of investment and staff compared to our competitors. This is a highly visible statement of our trajectory and long-term commitment to these countries.
Second, an active re-engagement by DIT with the many trade associations and other sector – expert bodies in the UK is way overdue. There appears to have been a writ running through Whitehall since the days of the unexpected Cameron majority that trade associations were fusty, old hat and what government needed to do was break bread directly with CEOs of ‘real businesses’. This may sound fine, but the reality is that neither CEOs nor government have the capacity or time to engage, company by company, in depth. It’s deeply inefficient. Trade bodies, used highly effectively by governments in Germany, Japan and elsewhere in the major trading nations, are there precisely to collect their members views and expertise and deliver them effectively to government. What has been happening in the UK in contrast has been their disintermediation in the critical business needs – to- export role by substantial hiring of Whitehall trade staff and advisors who, whilst hard working and well meaning can’t hope to have even a modicum of the associations’ knowledge. This is more than just special pleading. It’s timely to ask whether, whilst keeping HMG’s expertise in funding export opportunity, the hundreds of millions spent on employing trade civil servants would not be better deployed in outsourcing to private sector expertise the key role of working with the UK’s embassies and high commissions to translate opportunities they identify into rapid, knowledgeable and successful UK business offers.
Finally, the blame lies on both sides. It can’t be accurately said that the UK private sector has covered itself in glory when it comes to cooperation with HMG. Many industry bodies have adopted a tone around Brexit that has meant a number 10, not known for its willingness to listen to other views, has seen ‘Business’ as a remoaner menace. Business groups could still have made their deep fears about Brexit known whilst engaging early on, sector by sector, to work positively with HMG to methodically identify challenges and suggest solutions. If business does not have its accustomed ear in Cabinet it has, to a large degree, itself to blame.
The week following Prime Minister May’s visit, China greeted Africa’s leaders with full pomp and a persuasive message based on ready finance for major projects and a repeat of a (somewhat unconvincing) ‘no- strings attached’ message. The UK’s ability to compete with this sort of clout may seem limited. It’s not. We have huge and relevant sector expertise needed by Africa, and deep ties through large African diasporas in the UK, through the generosity of its citizens, and not least through the powerful glue of The Commonwealth. The announcement of a UK Africa Summit to take place next year is to be very much welcomed. But without the effective, welcomed and coordinated involvement of the private sector, the risk remains of great sound-bites and photo -opps- and possibly a raft of new trade agreements- but no real export progress as defined by the only statistic that matters; material growth exports to the new non-EU markets that lies at the heart of the Brexit opportunity.