These are meeting minutes from the Africa APPG & RAS event in parliament on the 20th July 2016. An audio recording of the event in available here.
On the 20th July, the Africa APPG together with RAS arranged an panel meeting in parliament. This discussion brought together various stakeholders to discuss the impacts of Brexit on the EU and UK’s trade agreements with African countries. The panel discussion was lively and each panelist brought a unique perspective to the dialogue resulting in a rich and multi-dimensional analysis of the economic, political and social implication that Brexit may have on Africa-EU EPAs.
Chair of the Africa APPG, Chi Onwurah MP, chaired the meeting and opened the discussion stating that the Africa APPG looking closely at how trade impacts Africa and effect of European Partnership Agreements specifically. She added that there are mixed messages about economic partnership agreements. Many have good things to say and many critique and criticize the impact of agreements on indigenous groups.
Edwin Laurent- Director of the Ramphal institute
Mr. Laurent excavated particular trade agreement policies. He considered the changes that the UK will need to make in order to mirror existing EPA policies and he suggested implications that African countries need to consider in light of Brexit’s inevitable changes to European and UK trade agreements. The UK will be stretched and under tremendous pressure to negotiate and conclude many complex trade deals in a very short time, and countries whose volume of trade is small might not be seen as priorities. But for small African exporters, this trade could be of vital economic importance. These countries would hope that their trade will not be a victim (albeit unintended) of Brexit, but will be able to flourish in the post-Brexit era.
The APPG’s work on EPAs and their impact on Africa’s industrialisation is of particular importance and fundamental to African countries’ ability to move up from the bottom of global value chains where so many languish, producing and supplying raw-materials with minimal processing and transformation. Progressing up the chain is essential if they are to expand income and employment so as to reduce poverty and improve livelihoods. The EPA was intended as the vehicle for supporting that transition.
The EPA is not an investment agreement, but several African countries have investment agreements with European countries. The EPA provides duty-free quota free access to a major high income market and complementary financial, technical and policy support to help the partner countries develop and improve economic management and enhance their capacity to produce and export internationally competitive goods and services.
The EPA is a comprehensive reciprocal agreement that sets a framework for trade, investment and economic cooperation providing duty and quota free entry to the EU market for African signatories. This mechanism is, in many cases essential for African suppliers to be able to sell on a competitive basis in the UK and the rest of the EU.
Whilst the UK is a signatory to the EPA, upon leaving the EU it would automatically cease to be a member of the Agreement. The consequence is that the trade that might have been facilitated or made possible by the EPA preferences could be jeopardised unless adequate substitute arrangements are put in place. African countries would hope that this is what would happen eventually.
Generalised Scheme of Preferences (GSP) and Everything But Arms (EBA)- The prospects here are much brighter. Both of these are in keeping with WTO rules/exhortations. It is my understanding that the UK is free to continue to provide eligible countries with preferential market access under these two arrangements.
WTO rules- African exports to the UK that do not qualify under a preferential arrangement are subject to standard WTO tariffs. Brexit will give the UK the ability to negotiate its tariffs on its own rather than as part of the EU. The rates that it negotiates/settles on will be crucial, not just in terms of providing protection for its domestic production, but also a preferential margin for imports from Africa under the GSP, EBA or any UK successor to the EPA. To use some examples, permitting duty free entry of sugar from Swaziland or Mauritius, or bananas from Ghana or Cameroon would not do much to safeguard their export production aimed at the UK market if the MFN tariffs paid by Brazil or Ecuador are eliminated or overly reduced.
Consequences of Brexit
UK withdrawal from EPA: given the uncertainty over any replacement for EPA and also that formal talks will not be able to begin until after Article 50 has been triggered, the uncertainly can affect confidence and dampen the enthusiasm of investors, both local and foreign whose production is geared for the UK since they would have no assurance of ongoing satisfactory market access. This cutback in investment can itself impose a pre-Brexit cost on the African countries affected and even result in the long term loss of market presence.
The EPA itself with the remaining 27 can continue unchanged legally. However, since it will no longer provide the vehicle for access to the UK, such a major and important market, particularly for countries with longstanding Commonwealth ties, its value from a commercial standpoint could be diminished. In this regard one might recall that last week after 14 years of negotiating an EPA with the East Africa Community (EAC), Tanzania announced that it would not be proceeding. The signing of the Agreement was to have taken place on Monday this week and has now been called off.
EBA and GSP preferences are in line with UK commitments made within the WTO framework so EBA and GSP imports should not be affected.
Development finance: The UK’s voluntary contribution to the European Development Fund (EDF) has been considerable. Brexit will mean that it is no longer available and so the EDF that has benefited African countries would be expected to be cut back (unless as is most unlikely the remaining 27 agree to make up the shortfall). The UK can decide to channel the same volume of aid directly or through other intermediaries. Brexit can offer an opportunity for the UK engage more directly and constructively with development partners to ensure that financial assistance makes a fuller contribution to sustainable development and transformation.
There will be the loss of the valuable, progressive and pro-development voice and perspective of the UK in framing EU development policy.
How can the UK safeguard Africa’s exports post Brexit?
- Continue to provide EBA and GSP trade benefits
- Conclude duty-free and quota free market access arrangements at least with the non-LDCs in particular those that have longstanding trading links.
- Most importantly maintain Most Favoured Nation (MFN) tariffs on sensitive products of particular importance to African countries and exclude them from preferential trading arrangements with other regions that are low cost competitors for instance in South and Central America and South and South East Asia.
Dr. Eka Ikpe- African Leadership Centre, Kings College London
Regionalism has been an important basis upon which the EPAs have been consolidated, with regional bloc representation for West Africa, Southern Africa, Eastern and Southern Africa and Central Africa. An arrangement on the basis of regionalism strengthens Africa’s stance as regional collaboration can serve to strengthen its production base and thus its export base; there is opportunity for wider developmental benefits through building frameworks for transnational public goods; there is potentially a larger destination market for FDI and this can be a more attractive prospect for foreign investors among other factors.
Reciprocity has been central and a very contentious element of the EPAs. This is because in principle they expose prematurely African markets to European goods that may be be produced more competitively (although there are current provisions intended to manage these dynamics; many argue they are insufficient). The risk then is that they lock African economies into their static comparative advantage of primary exports (mineral resources and agricultural goods) thus undermining the current commitments and efforts towards structural transformation. The risks of such a situation are evident in the current challenges that many including the the largest African economies are facing as result of the downturn in commodity prices (Nigeria and Angola in particular).
Another important factor is the impact that Europe/UK trade agreements have on trade relationships that Africa has especially intra-African trade and economic integration more widely and trade with emerging partners such as the BRICs.
Further, we need to consider the importance of trade taxes to fiscal revenue in many African economies as result of the historical reliance (from colonial times) on this mechanism for the generation of public revenue. This is something that needs consideration given the requirement to remove tariff barriers to trade.
Dr. Kaire Mbuende- Ambassador fo the Republic of Nambia to the European Union
We want to attract investment. Namibia doesn’t qualify for other partnerships and that’s why EPA is really important to us. We have nothing else to fall back on. That’s why we were against Brexit. The EPA provides a broader market then just bilateral and not knowing whats going to happen is the most worrying
The UK is an important contributor to development finance/ foreign aid which has been instrumental in facilitating certain phases of development. The UK is third largest contributor to development funds. The UK leaving may have an impact on the amount of funds contributed to development through the European developing funds, we have access to some funds as an upper-middle income country. However, 40% of poorest of the poor are in middle-income countries. That’s why they also need help.
Liz May- Head of Policy at Traidcraft
As the UK starts to negotiate FTAs with third countries, Africa will be affected, but African countries are unlikely to be amongst the first priorities for those FTAs and this is OK.
It looks politically (and possibly legally) unlikely that the UK will be able to negotiate access to the EU’s existing FTAs including EPAs, but also agreements such as South Korea. Suggestions that the UK could simply replicate the EU’s FTAs, look similarly fraught.
The best guesses I have heard so far suggest that it would be simplest and therefore quite likely that we would choose as a starting point to base our tariff schedule on the one we currently implement i.e. the EU’s, perhaps with some tweaks. This would then need to be bound at the WTO with the UK as an independent member and this would then form the basis of our negotiations with third parties.
So who are the priorities for the new International Trade Department? Countries we already know are the United States, Australia, China, Canada, Japan, UAE, South Korea, India, Indonesia.
The important thing here is to note that SS African countries are unlikely to be on the UK’s priority list, but that they will be impacted by these other FTAs, in particular they will likely face preference erosion of the UK manages to strike a deal with some large competitive agriculture exporters. So these need to be watched closely.
Answering what will happen to the EU’s existing FTAs (including EPAs) is a lot harder to predict as it depends on the EU-UK negotiations. The UK might try and negotiate some kind of continued application of those existing EU FTAs at least for a temporary period of time, perhaps through a legal protocol. It is hard to imagine the EU agreeing to this option as it is very like having your cake and eating it.
Access to the EU market for African countries under the EPAs have been bought at the price of reciprocal market opening and in some cases regional fragmentation. So we see Tanzania pulling out of the East African EPA because as Aziz Mlima said “Our experts have analysed the pact and established that it will not be to our local industry’s benefit. Signing this pact at the moment would expose young EAC countries to harsh economic conditions in post-Brexit Europe……..”
Given these uncertainties and the urgent need to send a signal to business and investors that market access will not be disrupted, we think the UK has an opportunity to develop a preference scheme that builds on and improves existing schemes, that is specifically designed to support regional integration and is genuinely pro-development.
The UK has the chance to demonstrate its commitment to open and fair trade by designing an innovative, pro-development preference scheme that builds on existing good practice, is WTO compatible, does not require complicated and time consuming negotiations and crucially provides developing country exporters with the certainty they need – at least as an interim measure.
Such a scheme could:
· Be more generous than existing EU schemes, in terms of the products and countries covered.
· Be designed explicitly to support regional integration in particular through having regional accumulation in the rules of origin.
· Be granted for a sufficient time period to provide stability and further legal certainty could be provided by having the scheme bound under article 2 of the GATT
· And for some regions, it could provide a stepping stone towards more comprehensive FTA negotiations at a later date, as and when regions are ready.
· the Norway model and be part of the EEA, but this would mean accepting the free movement of people
· we could join EFTA, but not the EEA as the Swiss have done
· or we could negotiate a very comprehensive FTA as the Canadians have done
· we may also try negotiate a bespoke membership of the EEA, perhaps without joining EFTA
Now for regions like the Caribbean this might not be too far off, in the case of Africa this scheme could be designed to fall away once progress towards the continent wide FTA is sufficiently embedded.
Questions and Contributions
· Effect of Brexit on Commonwealth?
o Edwin: Good idea but not something that can be easily arranged. Commonwealth is a political rather then economic partnership
o Kaire: Commonwealth does play a big role.
· Level of African—UK trade and FDI. How can we ensure that Africa is on the “agenda”?
o Chi: encouraged interested participants to suggest parliamentray dedicating questions and debates to ensure this dicussion is on the agenda.
o Liz: Africa shouldn’t be at the front of FTA. We need to think about how we can incorporate Africa into the FTA agreements.
o Kaire: if the UK doesn’t prioritize Africa then it’s the UK’s loss. Africa is too important to be left to Europeans. Now, they are saying that African is too important to be left to China alone. The state of development might not attract development but it should be able to make a case for itself.
o Eka: UK needs to have a more interconnected thinking about Africa. Think about development and security issues and the economic implications. Look at the complex interconnections.
On 12 May the Prime Minister hosted an international Anti-Corruption Summit in London. Representatives from over 40 countries agreed to a series of practical steps to ‘expose corruption so there is nowhere to hide; punish the perpetrators and support those affected by corruption; and drive out the culture of corruption wherever it exists.’
On 10 May James Duddridge MP, Parliamentary Under Secretary of State at the Foreign and Commonwealth Office with responsibility for Africa, the Caribbean, and the Overseas Territories, joined the APPGs on Africa, Anti-Corruption, Nigeria, and Sudan & South Sudan, to discuss corruption, conflict and the role of the international community.
The discussion was chaired by Mark Durkan MP, Chair of the APPG on Sudan and South Sudan and Secretary to the APPG on Anti-Corruption. Emma Vickers from Global Witness and Leah Wawro from Transparency International sat on panel.
The Minister delivered the keynote address, the full transcript of which can be read here.
Leah Wawro described corruption as a weapon for those who want government institutions to fail. Looking at the actions of ISIS, the Taliban, and Boko Haram it is clear that corruption is a driver of terrorism and conflict. Violence and bribery flourish when governments line their own pockets rather than invest in services.
It is not only the direct costs of corruption, but the opportunity costs that must be taken into account. In Nigeria, 20% of the annual budget is spent on defence. Much of this is ‘wasted’ or diverted to corrupt ends. If this ‘waste’ was excluded, more resource would be available for other budget lines and expenditure would be more effective.
Currently, lack of legitimate funding for Nigerian security forces encourages ‘predatory’ defence services. Nigerian defence corruption is widespread with cases of soldiers selling their goods to Boko Haram.
Nigeria needs to: introduce transparency into defence policy development, improve parliamentary oversight of defence spending, establish protection for whistleblowers, and open defence procurement information to the public.
Increasing accountability in defence institutions would provide a model of best practice for other areas of public procurement in Nigeria.
Emma Vickers called for renewed focus on the global architecture that allows corrupt individuals to move their funds out of Africa and for the UK, as a global financial centre with numerous tax havens under its jurisdiction, to get its own backyard in order.
South Sudan is beset by conflicts and corruption: it is the source of the 3 rd largest oil wealth in Sub-Saharan Africa but revenues are being misused to fund trade in weapons and fuel conflict. An estimated $8bn in oil revenue has been lost since independence.
Corruption links to conflict in South Sudan through fostering a lack of trust in state institutions, promoting patronage networks and competition over the state, and through the proliferation of arms.
Since the recent conflict began, the UK has been supporting the so-called’ roadmap to peace. UK parliamentarians need to hold this roadmap to account and to support efforts to exercise oversight over South Sudan’s oil industry.
Closer to home, the UK has some serious work to do on dealing with anonymous companies registered in Overseas Territories and end the ability of corrupt actors to use shell companies as a means to move corrupt funds into the legitimate financial market.
Baroness Northover asked the Minister what progress has been made on ensuring that representatives from the Overseas Territories attend the Summit.
In response, the Minister stated that the Overseas Territories have gone a long way in introducing tax transparency and information sharing, but still need to go further. He stated that penalising the Territories was identified as an unhelpful solution. He described that it was easier for the UK to introduce a public register of beneficial ownership given that banking only makes up one part of the UK economy.
Lord Luce stated that corruption is a direct tax on living standards and identified transparency as the primary solution. He inquired as to the role of the Commonwealth in supporting countries to tackle corruption.
Attendees asked what the role churches, civil society, and the private sector could play in challenging corruption and assist in asset recovery and return.
Ms Vickers highlighted that the benefits the private sector can bring depends on the jurisdiction and the strength of the rule of law. For example, in South Sudan it has become clear that some multinational oil companies are not abiding by domestic legislation.
South Sudan needs investment, but the right kind and at the right time. Star Petroleum in failed to meet any basic standards to enable it to tender for business in South Sudan, indeed some owners registered in BVI. UK has a role to play in preventing rogue traders taking advantage of lax institutions. There has been a lack of transparency surrounding tenders; schemes such as EITI should be expanded.
To prevent corruption in natural resource industries, the application of EITI standards are key. Transparency measures are beneficial for the private sector, the OPL 245 case study alone demonstrates the cost of corruption for companies.
The Minister stated that multinationals should and can provide best practice examples of dealing with corruption, for example Shell refuses to pay bribes in Nigeria. On the issue of asset recovery, the Minister stated that more needs to be done on to assist the repatriation of the proceeds of corruption. However, it equally important that due process is followed.
Responding to a questions about the possible role of domestic law enforcement the Minister acknowledged that weak or missing institutions are problematic. On the question of so-called ‘cultural corruption’, he stated that cultural sensitivity is important but that understanding must not cede into a tacit acceptance of petty corruption.
Ms Wawro called for the UK to provide training and assistance to Nigeria to deal with asset recovery, the prevention of illicit financial flows, and effective policing. She also called for international actors to protect civil society space and support anti-corruption activists on the ground; this is particularly important in Nigeria.
President Obama’s message to Africa’s rulers at the African Union in Addis Ababa today will encourage Africa’s economic growth but he will also be critical of the dictatorial tendencies that still abound in Africa’s politics. Africa, he says, needs strong institutions, not strongmen.
Never since the end of the Cold War has there been such a dearth of leadership on the continent. South Africa and Nigeria are the continent’s major powers but President Jacob Zuma of South Africa shows weak leadership at home and little interest in the rest of the continent. In Nigeria, Africa’s largest economy, newly-elected President Muhammadu Buhari is struggling to establish a government. Continent wide, regional integration which should be driving bigger inclusive economies, has been at a snail’s pace because of lack of vision and each president’s fear of losing control.
In the early 1990s America promoted democracy, human rights and the free market to the world as the principles of global governance. The free market has taken off fast in Africa, largely because Africans have simply got on with it. African cities today are bustling and growing and trade has been at an all time high. But African rulers have never been less committed to democracy and human rights. Most countries hold elections but fewer and fewer lead to a change of government. Nigeria in April was an extraordinary exception. Respect for human rights is in the hands of the governments and respected in varying degrees.
Embarrassingly Ethiopia which hosts the African Union headquarters where Obama will be speaking tomorrow, has not a single opposition MP in its 547-strong parliament, despite being in power since 1992. The press is also very tightly controlled. The government makes no apology for its political repression but points to Ethiopia’s high economic growth rates – around 10% for the last few years – and the fact that a third of Ethiopians, about 1.5 million who were regarded as poor in 2000, are now better off.
A similar situation exists in Rwanda, another favourite of Western donors. Its government delivers health and education to its people while maintaining total control over their lives through a surveillance system that North Korea would be proud of. At least, its friends argue, they have good reason after the 1994 genocide. Elsewhere governments are increasingly rarely changed by elections and several presidents, including Rwanda’s, have removed or are trying to remove term limits from their constitutions.
In Kenya on Sunday Obama stood next to an uncomfortable-looking President Uhuru Kenyatta. Son of the country’s first president, he heads the country’s richest family. You could see Kenyatta’s discomfort when Obama spoke of Kenya’s rampant corruption, lack of gay rights and discrimination against women. Kenyatta bluntly refused to accept gay rights and I believe most of his fellow presidents will support him.
At one time presidents like Kenyatta would have smiled meekly and obeyed. Thanks to China’s engagement in the continent, African rulers have an alternative powerful ally and can push back against US demands. The outright refusal to accept gay rights shows Africa’s growing self-confidence. China has given Africa’s rulers an alternative trading and political partner. Its engagement in Africa over the past two decades has enabled African governments to ignore or reject demands from Britain, France and the US although there are signs that Beijing is now beginning discreetly to support western demands for better governance, not least to protect their own interests in the continent.
This is a crucial time for Africa. Today it has more than a billion people. By 2050 that will have become 2 billion. Until now it has lived by exporting commodities, vulnerable to the price swings of raw materials. If it can start adding value by manufacturing and exporting, it could become the next big global economic driver. But this requires vision and leaders who have their countries’ interests at heart.
Today I expect President Obama will speak to all Africa’s presidents about better governance, term limits, human rights and democracy. He will urge them to create space for their young populations to thrive in a corruption-free market. They will give him a standing ovation but at the back of their minds many will be thinking: “nice words and good ideas but will they help me stay in power?”
Richard Dowden is Director of the Royal African Society.
This article was published in The Times on July 28th
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Date & Time: Tuesday 11 March, 7-9PM
Place: Khalili Lecture Theatre (KLT), SOAS
Event in partnership with the SOAS Pan-African Society.
Speakers: Mick Csaky, Series Executive Producer; Gus Casely-Hayford, presenter, Lost Kingdoms of Africa; Professor Stephen Quirke, Institute of Archaeology, University College London; Dr Ayman El-Desouky, Senior Lecturer in Modern Arabic and Comparative Literature, SOAS.
The Royal African Society is proud to announce that it is hosting the 30 anniversary of Basil Davidson’s awardwinning 8 x 1hour documentary film series “AFRICA: A Voyage of Discovery” which first appeared in the UK on Channel 4 television in April 1984 and went on to play worldwide, with an accompanying book.
Basil Davidson’s seminal documentary series ‘Africa’ challenges the long held beliefs like the opinion of David Hume that Africa had ‘no ingenious manufactures among them, no arts, no sciences’. The series presents a pan-African conception of history from the origins of Egypt and Nubia to the liberation movements that Basil was familiar with, and newly independent nations in Zimbabwe and Mozambique.
When Greek Historian Herodotus visited Ancient Egypt he described the civilisation he saw there as ‘different but equal’. Episode one shows that some of the world’s greatest early civilisations have their origins in black Africa, including those along the Nile Valley. The episode includes interviews with Senegalese mathematician, philosopher and Egyptologist Cheikh Anta Diop and explores the growth of African civilisations in West and Northeast Africa.
In the Q&A following the screening we will discuss the extent Victorian Egyptologists ‘whitewashed’ archaeology to fit in with their conception of Africa as a land with no intrinsic history.
About the series:
The series was produced in collaboration between Channel 4, The Nigeria Television Authority MBTV and RM Arts. It first aired 30 years ago in 1984 and won many awards, including the International Film & TV Festival of New York Gold Award. It has since been distributed, free of charge to many schools and colleges in the UK and Africa.
About Basil Davidson
Basil Davidson was a distinguished author and historian, having written more than 30 books on Africa. Prior to this he was a soldier working in Churchill’s Special Operations Executive during World War 2.
AFRICA - Episode 1: Different but Equal. Written & Presented by Basil Davidson. Executive Producer: Mick Csaky. 1983.
AFRICA - Episode 2: Mastering a Continent. Written & Presented by Basil Davidson. Executive Producer: Mick Csaky. 1983.
Join us for our live screening of Episode 3:
Many missed out on her April show at La Linea, as the tickets sold out quickly.
Hailed as a star in contemporary flamenco, Buika is blessed with a remarkable voice; raw and smoky but with a tenderness that hits right at the heart.
This is your opportunity to see her in an intimate environment, playing tracks off her latest release: "La Noche Más Larga"
Get your tickets now, her show at the Barbican is selling fast!
"Buika possesses the most haunting voice to be found on either side of the Atlantic” - Sunday Times
Watch the trailer for her Barbican Show Here
The concert follows her sold out show at this year's La Linea festival and the release of her stunning new album in June.
'Luminous…magnificent…superb!' New York Times
Ticket Prices: £15-£24
Jazz driven by Latin grooves.
Tony Dudu is an in demand session guitarist, appearing on over 100 records with artists from Guinea Bissau, Angola, Mozambique, Sao Tome, Cape Verde and Brazil. Tonight Tony Dudu and his band “Gumbe Jazz” play frenetic jazz dance grooves powered by creative jazz solos.