Chartered Institute of Export & International Trade Africa Lead, Eugene Waluvengo, sat down with the Daily Update to look at some key sectors for trade between the UK and African nations – as well as some of the strategies UK firms can adopt to make the most of that trade.
Agri opportunity
One of the strongest areas of cooperation between the UK and Africa is agricultural products, which remains “one of the most important sectors in Africa”, Eugene says.
While Africa exports agricultural products like cocoa, coffee, tea, fruits and flowers, "these agricultural products are exported unprocessed or having undergone very little value addition resulting in African countries receiving little earnings from export of these products".
“UK firms can benefit through investments in agriculture, partnering with African countries to do agri-processing in African countries.
“Several African countries offer attractive incentives for foreign direct investment, aimed at enhancing their national agri-processing capacity”
While “most of Africa is not very productive in agriculture because of the use of traditional farming methods”, Eugene explains, “with UK expertise, for instance in precision farming and irrigation, and in supply chain management”, both continent and country can benefit.
Energy and investment
Similarly, UK expertise in renewable energy could be put to particularly productive use on the continent.
“Many parts of Africa remain unconnected to power grids,” says Eugene,
“Power is not reliable, even in some of the bigger economies like Nigeria – Africa’s largest economy – they really struggle with power.
Many businesses have to buy generators to sustain their power needs when power from the national grid is not available. There is also the famous load shedding (planned power outages) in South Africa, implemented by Eskom, the national power utility, to prevent widespread grid failures and blackouts when electricity demand exceeds supply.”
There is therefore a “big need for investment in the energy sector”, something which presents an opportunity for UK renewable energy firms.
Solar, wind and hydropower are all industries in which the UK has an opportunity to export to Africa – whether that be in the form of goods or services – and support the development of infrastructure.
More broadly, there is opportunity for UK firms in supporting the development of local infrastructure in Africa through both investments and exports, Eugene says.
Advice to exporters
On the strategies traders in both jurisdictions should adopt when looking to trade with each other, Eugene advises firms to look at the UK government’s Developing Countries Trading Scheme (DCTS) for opportunities.
The government says that this scheme “cuts tariffs, removes conditions and simplifies trading rules for 65 developing countries”.
"DCTS provides African countries with increased access to the UK, although it is not widely publicised in Africa."
That “very few African traders know about this scheme” presents an opportunity to grow trade between the region and the UK just by raising awareness, as Eugene does himself as part of his work with the Chartered Institute.
He also raises the importance of trade missions in building links between the UK and Africa, and points to the work of institutions like Equity Bank in Kenya, South African Chamber of Commerce UK and the International Trade Centre through the SheTrades initiative.
“These are really helpful,” he says, advising traders to make the most of them.
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