LONDON — The U.K.-Africa Investment Summit saw £2 billion ($2.6 billion) worth of investments committed to African businesses over the next two years from the United Kingdom government's development finance institution.
Infrastructure development was also a key theme of the event, with international development secretary Alok Sharma announcing a new mechanism for financing projects in five countries.
Heads of state from 21 African nations and their delegations assembled in London on Monday, alongside U.K. politicians, African entrepreneurs, and representatives from finance, business, and development for the high-level summit.
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U.K. Prime Minister Boris Johnson welcomed them to the country, saying the U.K. was a “one-stop shop for investment and business,” and spoke of his ambitions for free trade with African nations. The development event’s focus on trade and the private sector was not without controversy, however.
The commitment of the CDC Group — funded by the U.K Department for International Development — to invest £2 billion in Africa by 2022 was one of the biggest announcements of the day. In addition, CDC revealed nearly $400 million worth of new investments to support entrepreneurs and small and medium-sized enterprises.
“Investors have a real opportunity to embrace the U.N.’s Sustainable Development Goals — in partnership with African countries and businesses — to fight climate change, create jobs and skills, and bring about positive social and environmental change,” said Nick O’Donohoe, CEO at CDC.
“As Africans … we expect in the future we will be a key market, and not just for the U.K. to sell to.”— Dr. Ngozi Okonjo-Iweala, economist
“The commitments we have announced today will accelerate the rollout of solar power and other renewable technologies and support the growth of countless SMEs — the bedrock of any healthy economy — across the continent,” he added.
Sharma also announced the establishment of a project development facility, “to see how we can get private sector money into infrastructure.”
The project has already embarked on partnerships with Kenya, Ghana, Uganda, Egypt, and Ethiopia and aims to “to generate billions of pounds of private sector investment for sustainable energy, transport and telecommunications projects in African countries,” according to the government.
Sharma told the audience: “That is the future, where the U.K. can support, with the brilliant City of London [the U.K.’s financial hub], our expertise and the support we provide through DFID, to make sure we have money going into infrastructure. Not just government money but private sector money. I’m absolutely confident that if we work at this we will make it a success.”
DFID’s International Development Infrastructure Commission, established by Sharma — who has been in the role since July — has identified poor infrastructure as a key barrier to foreign investment in African nations.
The U.K. will also launch a new partnership focused on infrastructure with the African Development Bank.
However, with DFID funding the summit to the tune of £11 million, the trade-focused event attracted intense scrutiny from civil society organizations. African groups in particular claimed to have been excluded from the summit. Outside, a handful of protesters brandished placards with slogans including “Stop The New Scramble for Africa” and “Say No to Empire 2.0.”
The prominence given to Egypt’s President Abdel Fattah el-Sisi — who was the second political leader to speak, after Prime Minister Johnson — also angered human rights activists.
Benjamin Ward, acting U.K. director at Human Rights Watch, said the decision sent “a terrible message to the country’s embattled activists and calls into question the U.K. government’s stated commitment to uphold human rights globally.”
Despite the controversy, the U.K. government’s approach to the event — as it evaluates the role of development, and Africa, in its post-Brexit global engagement — was welcomed by economist and Gavi board member Dr. Ngozi Okonjo-Iweala.
“Brexit is round the corner; if one of the first things the government does is organize a conference centered on Africa then it seeks to underline how important this relationship is,” she said. “The U.K. is building on historical ties … but it’s also building modern ties and reaching across the Commonwealth to pull in [other nations].”
Okonjo-Iweala also highlighted the ambitions of African nations to export to the U.K., adding: “As Africans … we expect in the future we will be a key market, and not just for the U.K. to sell to.”
The summit included sessions on sustainable finance and infrastructure, trade and investment, African growth opportunities, and clean energy transformation.
In a panel featuring President Uhuru Kenyatta of Kenya, President Mohamed Ould Ghazouani of Mauritania, and African Development Bank President Akinwumi Adesina, Ghanaian President Nana Akufo-Addo spoke of the need to update Africa’s dated financial architecture and address the “African risk premium” — where investors treat African nations as especially risky places to do business, demanding higher returns — which makes entering the bond market “a very expensive matter for us.” He also called for governments to address illicit financial flows.
Among the entrepreneurs to speak was Tatu Gatere, co-founder of Buildher, a company that specializes in training women in construction skills. She urged policymakers to think about “existing challenges ... preventing vulnerable groups like women and youth from accessing existing economic opportunities.”
Update, Jan. 22: This story was amended to correct the currency of CDC’s $400 million investment in SMEs.