African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down which threatens to undo the hard-fought gains of the last 25 years
Nestled in the undulating hills of central Ghana is a Fair Trade cooperative cocoa farm that produces chocolate for export to the world, including to supermarkets across the UK. When I visited the farm last summer, I saw for myself the many jobs the farm provides – many taken by women – and the families that these support.
Consumers of the chocolate that originates from Ghana include, no doubt, thousands of workers in my constituency of Stafford, like those in the General Electric factory in Stafford. They manufacture transformers for the energy grid across the globe, including in developing countries like Ghana, where electricity supply can often be insecure or not available.
That’s how trade works. Both sides win. For the UK and Africa, our two-way trade has enormous value – a total of £35.1bn of goods and services in 2018 according to ONS – creating and sustaining countless jobs across our country and on the continent. The Prime Minister has been quick to seize the opportunity. At the inaugural Africa Investment Summit in London earlier this year, he promised to renew our economic partnership with Africa, containing some of the fastest-growing economies in the world.
Today, however, African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down which threatens to undo the hard-fought economic gains of the last 25 years. Ghana’s cocoa industry alone is facing a billion dollar fall in revenues, with devastating consequences for the farm workers and their families who I met last summer.
The pandemic is affecting every sector of every African economy. A year ago, the World Bank’s Africa Pulse report forecast sub-Saharan economies to grow in 2019 and 2020 by around 2.8%. Now the bank forecasts that the region will fall into its first recession for a quarter of a century. Yet at the very moment that African economies require both emergency support and the ability to fast rebuild their economies, another insidious threat looms.
Protectionist impulses and demands are being rekindled in British politics. Some are arguing for a new form of self-sufficiency – a sort of autarky that means we in Britain should try to grow our own cocoa, however expensively, so that we are no longer reliant on overseas producers. Others are pursuing protectionism under the guise of well-meaning social and environmental demands.
Whatever the rationale, “protectionist policies would wreak havoc in Africa” according to the UK think tank, the Overseas Development Institute. They would deprive poor countries of their export markets, while leading to tit-for-tat measures against our exporters here in the UK. Protectionist policies would hit British jobs, drive up prices and reduce choice in our supermarkets.
Liz Truss, the Trade Secretary, has moved swiftly to galvanise G20 action on trade, instigating a virtual meeting of G20 Trade Ministers where they pledged to ensure that emergency measures are “targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules”.
The UK is also working within the WTO and Commonwealth to champion a liberal free trading agenda across the world and support developing countries to maintain the benefits of trade for their economies and population – all the more important now that the WTO’s 12th Ministerial Conference in Nur-Sultan, and the Commonwealth Heads of Government Summit in Kigali, both scheduled for June, have been postponed.
Next, we must focus on Africa’s special situation. First, UK Ministers should intensify meetings with experts for advice on how we can keep trade with Africa flowing. Second, the UK and others should target funding urgently for “safe-trade” measures on the continent – such as testing, protective equipment and hand-washing facilities for truckers and officials at key ports and border crossings – being rolled-out by leading development organisations like TradeMark East Africa. Third, we should work with African leaders to chart out a new economic partnership covering trade, green investment and technology, a model the rest of the world can follow to build-back-better. There is much the Government can do to help British companies to export around the world, such as the work being done by the Trade Minister Greg Hands to reduce tariffs. This would make a huge difference to local businesses in the West Midlands such as the ceramic industry in Staffordshire.
One billion people have been lifted out of extreme poverty since 1990 through international trade, and we must not kick the economic ladder away from Africa. The Prime Minister knows this well, and has pledged the UK as the foremost champion of free trade in the world. The devastating economic impact of COVID-19 makes that role more important now than ever – not just for the cocoa workers of Ghana, but for the employees of General Electric and many others companies across the UK too.