Deputy Prime Minister’s speech at the Africa Jubilee Business Forum
Deputy Prime Minister Nick Clegg gave a keynote address at the Africa Jubilee Business Forum on 13 May 2013.
The African Heads of Mission in London held the event to commemorate the 50th anniversary of the founding of the Organisation of African Unity, which later became the African Union.
Text of the speech is below:
Let me first thank the African Diplomatic Corps, African Heads of Mission and Commonwealth Business Council for inviting me to open this business forum and for organising this event.
Today is a chance for all of us to recognise the businesses and jobs being created by African and British entrepreneurs together. And to focus on securing the wealth of investment opportunities available to us in the future. So I’m also pleased to see so many business leaders here with us as well.
It’s a fitting tribute, I think, to mark the 50th Anniversary of the founding of the Organisation of African Unity, now the African Union. I want to welcome my old friend Dr Tedros Ghebreyesus – Chairman of the Executive Council of the African Union – as we recognise and celebrate some of the achievements of that partnership.
Five decades ago, the Organisation of African Unity was there to help countries across the region transition from colonial rule. And as the African Union, it is there again now to support the continent as it takes on an increasingly global role.
On a recent visit to Mozambique and Ethiopia, I saw for myself how successful businesses, both large and small, are transforming millions of people’s day-to-day lives.
In Ethiopia, for example, I met female entrepreneur Bethlehem Tilahun Alemu. What others saw as scrap, Bethlehem saw as a business opportunity.
Her company Sole Rebels, which turns old car tyres into shoes, now employs around 80 people. It’s an enterprise that’s transforming the lives not just of Bethlehem and her workers, but also their families and the people they do business with elsewhere.
As a quick aside, Bethlehem would never forgive me if I didn’t tell you that you can buy her shoes online, here in the UK. I still wear the fabulously comfortable and very brightly coloured shoes that I got from her myself earlier this year.
Also Vodafone’s innovative M-Pesa system. Recently launched in Mozambique, it’s a money transfer service enabling people to carry out financial transactions on their mobile phones.
Started first in Kenya, with investment from Vodafone and support from the UK Government, this extends access to vital banking services for millions of people, who would otherwise only be able to trade in cash.
In Kenya alone, there are now 17 million users, with around 10% of Kenya’s GDP being processed through the system per year.
What these stories show us is the positive change that success, however big or small, can bring. Seven of the world’s fastest growing economies are in Africa.
Recent research shows that almost a quarter of African countries’ GDP grew at 7% or higher in 2012. It’s estimated that that growth across the continent could rival China in years to come.
Now that’s a story worth telling, but one often lost in the customary narrative of conflict and instability in Africa. So it’s time to rewrite the script. Africa is being transformed: once perceived by the outside world as merely a continent in distress; now looked to as a great continent of opportunity.
And as Africa’s presence on the global stage increases, we need to secure economic success for every country in the region. For the good of Africa, for the good of the UK and for the good of the world.
Everybody, of course, wants growth – the key decision is how you achieve it. More and more African countries face a choice between the economic models of authoritarian capitalism, on the one hand, and liberal democracy, on the other.
In countries like China, authoritarian capitalism argues the case for economic growth ahead of political freedoms. And it’s a seductive argument in view of surging growth rates, which have occurred in the absence of political freedom.
But ultimately it is a false promise. My view, the liberal view, is that economic progress and political rights are inseparable. They are parallel tracks, each reinforcing the other.
Fairness, freedom, empowerment, education, the rule of law – these are not so-called Western values. They are the values that will underpin healthy economies across the globe, long into the future.
And in a world of younger populations, growing middle classes and technological innovations that allow relationships and communities to form across traditional state borders, the demand for both economic success and political freedom – will only increase. Lasting stability depends not just on opening up our economies, but creating open societies too.
As nations across Africa continue to grow and prosper, the UK will seek to be an effective partner. First, in terms of the UK’s own changing relationship with Africa. And second, how the UK through European and international channels, not least our current G8 presidency, is determined to address the fundamental barriers to further growth and investment in Africa and the rest of the world.
Our focus is more trade; fairer tax; and greater business transparency.
The UK remains a strong partner with Africa. I’m proud that we will honour our commitment to spend 0.7% of this nation’s wealth helping the world’s poorest countries.
As you may know, legislation to enshrine this commitment in law was not included in last week’s Queen’s Speech – it’s an issue that has proved highly controversial amongst some Conservative MPs – but I’m pleased that the Coalition Government in its deeds and actions will continue to meet our commitments abroad: and our actions show that we will not balance the books on the backs of the world’s poorest.
But we also understand that aid must be properly targeted and that longer-term success depends on supporting businesses and trade in new and emerging markets.
UK companies already export more to Africa than they do to Brazil, India and Russia combined. That’s good, but we can always do more.
Especially, if we’re to compete effectively with companies and governments in Europe and elsewhere, who are making a determined push to seek out their own opportunities in Africa.
In line with Africa’s vision for a Continental Free Trade Area and the African Mining Initiative, we also want to explore how the G8 can help to unblock trade corridors across Africa, building on the successful trade facilitation programmes run by the DFID-supported Trademark East Africa.
As well as what Britain can do bilaterally, there is also the question of what Europe can do collectively. We are two great neighbouring continents joined by the Mediterranean.
Yet somehow, I don’t feel the EU acts with the coherence and leadership, which Africa deserves.
Other world powers, notably China, have a clear and consistent strategy: China invests big. It invests fast in pursuit of clear economic objectives.
I believe the EU could and should offer an alternative approach – one that can contribute to lasting success in Africa built on economic, political and social reform. Prosperity and stability in Africa and Europe are mutually reinforcing: when Europe fails, Africa is affected; when Africa fails, Europe is affected. So we must work together, continent to continent, so we both succeed.
Through the UK’s presidency of the G8, we are also keen to focus the agenda on issues that are fundamental not only to your success, but also, in the long-term, our own and the rest of the world.
Eight years ago at Gleneagles, we secured an agreement to cancel debt for the world’s poorest countries and to double aid. That action contributed to strong economic performances across Africa over the last decade.
Working together again now, focused on the 3Ts of Trade, Transparency and Tax, we can achieve even more.
Over the next decade revenues from newly discovered extractive resources in Africa will increase massively, dwarfing aid volumes.
In 2010 exports of oil and minerals from Africa were worth £216 billion – nearly seven times the value of international aid in the same year - £31 billion.
Too often in the past such revenues have bypassed Africans - due to unfair tax systems and opaque business deals. Lining the pockets of the few. Denying investment and jobs for the many. That has to stop.
We want to make sure Africans receive their fair share from the resources they have and the business they do. That demands fairer tax rules and greater transparency around what is being paid for oil, gas and mining resources and where the profits then flow.
We are pushing for more companies to report on the revenues they pay to governments, and for more governments to report on the revenues they receive.
The EU has just agreed legislation that will require all oil, gas and mining companies listed in Europe to publish what they pay to governments, in line with the US. Through the G8, we are pushing for equivalent standards to be applied globally.
The Extractive Industries Transparency Initiative sets a global standard for this. The UK helped establish EITI in 2003 and has been one of its staunchest backers. We’re now actively considering whether and how the UK should implement this initiative.
We also want to support greater transparency around land transactions; and to publish more G8 government data, including about aid budgets, in an open and accessible format – so it’s of real use to citizens across the world. Information empowers citizens and allows them to take control of their own development. Governments across the world must be accountable to their citizens.
Equally important is ensuring that tax regimes are transparent and efficient. Already, the UK’s flagship governance programme in Ethiopia has helped their authorities increase tax revenue from £8.2bn per year in 2002 to £55bn in 2011.
Only in partnership together – developed and developing countries- can we ensure our systems work as they should. These tax revenues are integral to deliver the infrastructure and skills that will drive growth in the future.
The Prime Minister and I will be chairing a high-level G8 event on 15 June to drive forward progress on tax, trade and transparency. We want to discuss with businesses, NGOs and governments how to achieve real progress on the agenda.
So today is about celebrating the next 50 years of Africa’s unity. We can’t ignore the challenges we face, but we also need to focus on the major, growing commercial opportunities that do exist. Building on our work together through the African Union, EU and G8 and directly with African States, I can see opportunities that benefit both Africa and the UK.
Today’s forum is another important step in the right direction. I look forward to hearing the outcome of your discussions. Our relationship with Africa remains strong, but is changing.
We are partners focused on growth, jobs and security. So let’s look to the next fifty years of the African Union and the success of our work together in the future.
Thank you.