Zuma in the UK

By Hamish Stewart and Marco Picardi, africapractice London

The arrival last week of Buckingham Palace’s first candidly polygamist guest under Queen Elizabeth II’s reign has been uncharacteristically subdued. But, whilst the South African premier, Jacob Zuma, will be crossing his fingers for as mellifluous a sojourn as possible, his visit should be seen as an opportunity for Britain to reassert itself as a protagonist in Africa in the face of rapidly growing competition from the BRIC countries.

Britain has much work to do on the continent if it hopes to retain its historical importance in the region and to match the surging investment and growing influence of the BRIC nations. Amongst this grouping, it is China that has made the most waves in its permeation of the continent. Although China is certainly not a new arrival in Africa, trading sums of up to $100 million per annum with some states during the height of the Cold War, recent rapid growth in the volume of economic transactions with Africa has been striking; within ten years of establishing economic and diplomatic ties with South Africa, it is now the rainbow nation’s largest trading partner. In fact, Chinese engagement in continent has seen it claim the title of Africa’s biggest trade partner, a relationship currently worth around $100 billion and growing.

Not to be left out, Russia, India and Brazil have also joined in the post-colonial struggle for new business opportunities on the continent. By mid 2008, Russia had become the second largest foreign investor in Africa. While this situation has changed following the financial crisis, it is a strong indication of what lies ahead. Large, formerly state-owned firms such as Rosneft, Lukoil and Gazprom continue to pursue new opportunities in the oil and gas sectors in diverse countries from Nigeria to Angola.

Along with other emerging economies Russian, and more significantly, Chinese private sector and government investment in the continent is changing the politics of aid and trade in Africa. The British are limited in their capacity to match the munificent repayment terms and low interest rates often afforded in Chinese financing of infrastructure development. Innovative schemes adopted to bolster Sino-African business, such as the creation of special cooperative economic zones, first seen in Zambia in 2007, where Chinese enterprises get tax breaks in exchange for attracting investment into the local economy, present a challenge to Britain’s traditional relationship with the continent. The most recent of these projects, a proposed Suez Economic Zone agreement between the Egyptian government and a Chinese firm from Tianjin, highlights the increasing reach of emerging economies in strategic economic sectors.

Britain must no longer rely so heavily upon historical political ties in seeking to influence the path to development of key countries, but rather must be prepared to engage in constructive long-term investment that will demonstrate commitment to a prosperous future for Africa. In light of Chinese, Russian and more recent Indian trade overtures to African leaders, Britain must be more aware that what she offers is a choice among a growing list of developmental partners in Africa. As domestic economic tides ebb and flow it will be increasingly important for Britain to build constructive economic and political relations with Africa. Here’s hoping Zuma and the Queen will get things started…