UK companies are looking at Kenya and the rest of Africa as they seek new markets and trading partners. This follows UK’s exit from the European Union (EU).
A recent report by the Overseas Development Institute (ODI), a UK-based think tank shows that British firms made the largest profits investing in Africa than in any other region of the world. The organisation has urged British firms to seek profits in Africa rather than only seeing it as a place in need of charity.
With 1.2 billion people and eight of the world’s 15 fastest-growing economies, the ODI says Africa offers world-beating returns on investment.
The report looks at investment by British firms in Ghana, Kenya, Nigeria and South Africa. Its authors say the “young population, growing middle class, and planned industrial growth make the continent a great place to do business.”
In 2019, the rate of return on all inward foreign direct investment in African countries was 6.5 percent, higher than the rates in Latin American and Caribbean countries at 6.2 percent, and also higher than the 6 percent return in developed economies.
The report was published as Britain formally left the European Union on January 31. The government has repeatedly said its ambition is to create a “global Britain” with new trading partners beyond the European continent.
As part of the effort to court new partners, London recently hosted the UK-Africa Investment summit.
Data from the Central Bank of Kenya (CBK) shows that in October 2019, the value of Kenya’s exports to the United Kingdom was KSh 3.5 billion.
This is compared to KSh 803 Million (Germany), KSh 3.7 billion (USA), KSh 4.7 billion (Netherlands), KSh 6 billion (Uganda), KSh 3.8 billion (Tanzania), KSh 4.5 billion (Pakistan), KSh 764 Million (France), KSh 1.8 billion (Egypt) and KSh 464 Million (Belgium).
The secretary-general of the United Nations Conference on Trade and Development, Mr. Mukhisa Kituyi, told the media that African nations need to work harder to attract investment.
“We need to develop this human resource as a contribution to the world’s economy, we need to create the conditions to make Africa the next factory of the world. Then you can say, can Britain step in, just like any other friend of Africa, and offer some of the solution?”
Britain says it can offer solutions. However, many analysts warn, that negotiations over its future relationship with Europe will likely dominate trade talks in the coming months and years.
The leading destination for Kenya’s exports is Africa, especially COMESA and the European Union. Within the European Union, the major importers of Kenyan goods are the Netherlands and the United Kingdom.