Greening: UK will focus on frontier economic development
Britain to increase investment in emerging economies and partner with leading companies to improve business conditions in Africa and South Asia.
Justine Greening opening the market at London Stock Exchange. Picture: London Stock Exchange.
Britain will more than double its investment in growing emerging frontier economies to end their dependency on aid, International Development Secretary Justine Greening has announced.
The UK government will also agree a series of new partnerships with leading British and international companies to improve business conditions in Africa and South Asia, kick-start embryonic capital markets and drive more investment into frontier economies.
In a keynote speech at the London Stock Exchange this morning, Justine Greening set out the Department for International Development’s new approach to support growth and create jobs in developing countries.
She also met the first delegation of East African businessmen, civil servants and regulators to be trained in managing capital markets through the DFID-backed London Stock Exchange Group Academy.
Justine Greening said:
Economic development is, without question, the only way countries can leave behind enduring and chronic poverty for good.
I have restructured my department to focus on jobs and growth and can now commit to more than double the amount we will invest in this crucial area.
Working with world-class businesses ensures frontier developing economies get the best support, advice and expertise they need to grow and Britain is well placed to benefit from this growth.
DFID’s new approach, outlined today in Justine Greening’s speech, means DFID will:
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More than double aid spending on economic development.
In 2015/16 DFID will plan to target £1.8 billion of its budget on economic development, more than doubling the amount spent in 2012/13. This is on top of indirect funding through core contributions to multilateral organisations
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Partner with 12 UK high street names to improve working conditions and job opportunities for more than 700,000 workers and smallholder farmers in Kenya, South Africa and Bangladesh.
This will include working with Sainsbury’s to help workers gain qualifications; Marks and Spencer to develop leadership and management skills for farm workers; Debenhams, Primark, Asda, River Island, John Lewis Partnership, C&A, M&Co, Next and Morrisons to improve management in Bangladeshi garment factories; and Tesco and Asda to invest in young fruit farm workers from disadvantaged backgrounds in South Africa.
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De-risk business investment in frontier economies by backing investment insurance in frontier economies including Burma, Sierra Leone, Zimbabwe and Nepal.
A lack of adequate and affordable insurance prevents promising business investment in fragile states. A £20 million investment in the Multilateral Investment Guarantee Agency will enable it to support up to £270 million of new private investment in fragile countries.
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Appoint Novastar, a venture capital fund based in East Africa, as the first beneficiary of a CDC-managed fund that will provide capital to promising businesses which benefit the community.
The fund will invest up to £9 million in Novastar to allow it to support more entrepreneurs and businesses and in East Africa which provide low-cost schooling, healthcare, energy, housing and safe water.
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Sign the UK’s first Memorandum of Cooperation with the London Stock Exchange Group to support emerging capital markets in Africa.
This will allow the LSEG Academy to expand its training in Tanzania and, in time, across East Africa
Notes to editors
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In 2015/16 DFID plans to target £1.8 billion of its budget on economic development. In 2012/13, DFID spent £620 million on economic development.
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The Trade and Global Value Chains initiative was first launched in January 2012. A total of 9 projects will now bring together business, government, and civil society to improve working conditions in the developing world and support the long-term resilience of global supply chains.
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CDC has selected Novastar Ventures to receive £6.12 million ($10 million) from the DFID Impact Fund. An additional £3.07 million ($5 million) will be provided if the Fund Manager raises additional private investment.
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The MIGA Conflict-Affected and Fragile Economies Facility (CAFEF) will provide political risk insurance to foreign investors in DRC, Liberia, Sierra Leone, Somalia, South Sudan, Sudan, Zimbabwe, Afghanistan, Burma, Nepal, Yemen and the OPTs. DFID will contribute £20 million to the first loss layer, alongside at least 2 other donors. Donor funding will mobilise up to £270 million ($450 million) of insurance to support investments in sectors such as manufacturing and infrastructure.
Quotes from participating UK brands:
Katharine Stewart, Ethical Trade Director, Primark Stores Ltd.
Primark is committed to the on-going development of our business relationships in Bangladesh, and we are proud to be part of the BBW initiative in Bangladesh, working with stakeholders to improve conditions within the garment industry. The BBW initiative complements our existing range of long-term programmes in Bangladesh, from structural building inspections to empowerment of female garment workers.
Judith Batchelar, Director of Sainsbury’s Brand
As part of Sainsbury’s commitment to creating a positive impact in the countries we source from, we are proud to be partnering with DfID on two new projects in Africa.
An innovative radio show will give thousands of small scale farmers, workers and communities in Kenya access to vital education and skills to address challenging social issues. Coupled with the delivery of a training programme for fruit supply chain workers in South Africa, both projects will contribute to securing healthier lives and more sustainable livelihoods for those that need it most.
By investing in nurturing skills, supporting development and encouraging healthier lives, Sainsbury’s is ensuring our customers will have the best quality fresh products today and in the years ahead.
Adam Creasey, Trading Director, Global Sourcing, Debenhams
Being part of this collaborative project is an exciting step for Debenhams. In our global supply base, we need to source from competitive & productive businesses which provide good jobs for workers, and BBW is a great way to do this in Bangladesh.
Louise Nicholls, Head of Responsible Sourcing, Marks & Spencer
We are delighted to be working with DFID on these projects. The DFID partnership/ funding will help create real impact and scale leading to a better trained workforce and networks of leaders who will drive change in their communities, ultimately this will lead to more resilient businesses and communities.
This innovative approach makes firm business sense for us while delivering real benefits to workers and their communities.
Giles Bolton, Director of Ethical Trading, Tesco Plc
We’re pleased to be working with DFID to help improve the lives of young people in South Africa and Bangladesh. We understand that a sustainable agricultural system in South Africa is built on fair working practices and opportunities for farmers to learn and grow.
We’re committed to further improving the working environment there, which is why we have launched a mentoring and leadership programme. In Bangladesh and India our work with DFID and other retailers on skills has meant that 67,000 Bangladeshi garment workers have received an extra £3.4 million in pay.
Jane Coppen, Head of Sourcing and Quality, M&Co
BBW is a practical and cost effective training model which delivers real change in factories – enabling better jobs and more profitable businesses. Taking part for us means that we can harness this collaborative force and Impactt’s experience on the ground in Bangladesh to contribute to the industry as a whole.
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