AS the British government continues to forge new trade relations with developing non-European Union countries post-Brexit, it announced this week further import tariffs reduction on hundreds of everyday products
This could see 99 per cent of goods imported from Africa entering the UK duty-free.
The Developing Countries Trading Scheme means that a wide variety of products – from clothes and shoes to foods that are not widely produced in the UK, including olive oil and tomatoes – will benefit from lower or zero tariffs.
It also removes some seasonal tariffs, so that cucumbers, for example, which cannot be grown in the UK in the winter, will now be tariff-free during this period for the majority of the countries in the scheme,
The UK’s International Trade Secretary, Anne-Marie Trevelyan, said: ‘As an independent trading nation, we are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.’
Last month, the UN Conference on Trade and Development’s (UNCTAD) Economic Development in Africa Report 2022 urged African countries to diversify their exports in the midst of soaring global food and energy prices.
‘To cope with current crises and insulate itself against future shocks, Africa must diversify its economies.
‘The continent of 1.4 billion people is among the least diversified regions in the world with regard to exports,’ the report said.
Commodities account for more than 60 per cent of total merchandise exports in 45 of the 54 countries in Africa, leaving them highly vulnerable to global commodity price shocks and undermining the continent’s inclusive growth and development prospects, according to the report.
However, businesses that deal with Africa have pointed out some of the obstacles that African countries will have to overcome if they are to successfully diversify their economies: weak financial bases, poor regulatory measures and infrastructure deficiencies.
One major stumbling block to economic diversification is the erratic nature of electricity supply across the continent.
The Geneva-based Paramount Energy and Commodities, which is involved in Africa, pointed out that the continent’s development would always be hamstrung if it did not have regulated, cost efficient, and clean energy generation.
‘Africa has plentiful resources but for the potential to be reached, a significant amount of capital expenditure is required – and international institutions and investors must help create the right environment for capital to be deployed to support African nations striving to reach this goal.
‘Electrification and access to energy is the lynchpin to economic growth.
‘Until electricity generation is consistent and reliable, African countries will always struggle to attract significant foreign direct investment in sectors that depend on state-produced electricity,’ Paramount added.
‘Businesses in Africa are at an automatic disadvantage due to the high cost of electricity production on the continent.
‘African development will be held back until the price of generation drops and businesses are able to operate on a level playing field to their international counterparts.
‘Governments must take steps now to invest in critical national infrastructure that helps to reduce costs on both the private sector and on ordinary citizens,’ Paramount said.
It noted that developing access to new sources of energy that were cheaper and cleaner must be a priority for Africa, as it sought to recover from the recent global economic challenges.
The company, which has been running a programme called Empowering Africa since 2017, said that this lack of electricity across the African continent could affect the fundamental aims of the African Continental Free Trade Area (AfCFTA).
The goals of the AfCFTA call for collaboration through the creation of a single market and the movement of capital, which ultimately aim to boost economic prosperity and unleash the potential of the region’s resources.
Paramount noted: ‘While the aims of AfCFTA target significant societal imbalances and inequalities, these issues can best be resolved by prioritising energy supply in the region.
‘In order to produce tangible results and realise the benefits of a free market and free movement of capital and labour, electrification is crucial.’
Paramount has been supplying affordable electricity to a number of African countries through investment in various power-generating projects, which will allow these countries to reliably supply affordable electricity to citizens and businesses to boost economic development.
As part of its Empowering Africa initiative, Paramount is also supporting Africa’s food independence through sustainable investments.
The company invested $500 million in a local food distributor in Angola towards the construction of a large food processing plant that will create thousands of jobs and reduce the prices of basic food.