Interview : Rona Fairhead
How is the UK government encouraging increased private sector investment in Ghana?
RONA FAIRHEAD: The UK government’s ambition is to be the largest G7 investor in Africa by 2022, and we see Ghana as a key country in helping us achieve this goal. We have a three-point plan aimed at increasing investment: we want to be indispensable to British businesses already invested in Africa; to attract new investors to Africa; and to work with African governments to boost reforms to the business environment, encouraging increased investment. What this means in practice is that the DIT will provide advice and guidance for UK businesses looking to operate in Ghana. We provide introductions for decision-makers and work to overcome market entry barriers and work with African governments to reduce blocks on investment. We also organise events and trade missions. For example, in 2019 the UK will host a UK-Africa Investment Summit in London. In what ways is the UK’s financial services sector contributing to financial inclusion across Africa?
FAIRHEAD: Financial inclusion is vital to any economy, and new mobile payment systems across the continent have brought millions of people into the financial mainstream for the first time. Successful examples include M-Pesa in Kenya, Paystack in Nigeria and Zeepay in Ghana, among many others. The UK plays an important role in financial technology, and in 2017 attracted more investment in the sector than France, Germany and the Netherlands combined. However, it is clear that we must balance the promotion of innovation against emerging risk in the financial system. This is where the field of regulatory technology may also provide a fertile ground for future collaboration between the UK and Africa.
How can countries in Africa ensure that they are an attractive destination for foreign investment?
FAIRHEAD: The World Bank’s ease of doing business index is a good measure. It is encouraging to see a lot of African countries improving both their absolute score and their relative ranking this year. However, we believe that there should be more African countries in the top 100. After all, these rankings are considered a measure of how attractive a country is to invest in.
It is also important that a country has a good sovereign credit rating – good economic and financial governance is vital to this. The fundamental factors that investors want to see are low levels of corruption with transparent, effective mechanisms for dealing with it when it does occur; low barriers to movement of capital and labour; and reasonable levels of bureaucracy. Trade barriers among African countries also prevent economies of scale that would make investment more attractive, which is why we are pleased to see the development of the Continental Free Trade Area.
What role do you expect West Africa to play in the UK’s post-Brexit trade portfolio?
FAIRHEAD: We are optimistic that we can increase the volume of trade between the UK and West Africa and the region’s share in UK trade. As we leave the EU we are aiming to replicate the effects of the EU’s Economic Partnership Agreements in order to avoid trade disruption. In addition, we hope to put in place a trade preferences scheme which will, as a minimum, provide the same level of access as the current EU trade preferences scheme, including providing duty free and quota free access for African countries.
DIT is increasing its resources across the region, enabling us to deliver on our long-term objectives in trade and investment. The UK aims to increase prosperity in Africa through trade. This is an important part of the UN Sustainable Development Goals, which the UK was at the forefront of negotiating. We are committed to investing in Africa’s development, with a particular focus on helping countries to leave aid dependency behind to become our trading partners of the future. Ghana’s Beyond Aid vision also shares this objective.
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