The UK Prosperity Agenda – growth, open markets and good governance

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The UK Government firmly believes that open and free trade is the way to increase global wealth. I want to see British businesses making the most of opportunities in Africa.


The UK Prosperity Agenda – growth, open markets and good governance

Very pleased to be here at the Deputy High Commissioner’s Residence in Lagos, on my first visit to Nigeria as the UK’s Minister for Africa. Today, I want to talk about the UK’s Prosperity Agenda and what the UK aims to achieve in partnership with Africa, and specifically with Nigeria. I want to talk about how we will work together to achieve those aims, including improving access to markets and championing the governance reforms that go hand-in-hand with economic growth. Last December I set out this agenda in a speech at Lancaster house in London. My key message was that we need to recognise the great opportunities available in Africa. Of course we want British businesses to make the most of the trade and investment opportunities on offer but more importantly we want African countries themselves to harvest the fruits. It is in all our interests to turn these opportunities into sustained growth. Nigeria is in a prime position to achieve this: according to latest figures the economy is projected to grow by 7.4% in 2011. With the right reforms and approach from government that growth can stimulate further opportunities for business and make a real difference to the lives of millions of Nigerians. The UK Government firmly believes that open and free trade is the way to increase global wealth. We have recently published a Trade and Investment White Paper that makes this case clear. In particular, it sets out our ambitions on the Doha Development Agenda, our commitment to ensure that developing countries can access trade finance, and our support for stronger African regional integration through the African Free Trade Initiative.

But regional agreements can only go so far, which is why Doha is vitally important. The current Doha negotiations are potentially worth a staggering £110bn to the world economy annually. Remember that this round was based on the principle of ensuring that it wasn’t just the developed countries that would benefit: developing countries need to see real benefits too. So 2011 is a make or break year for Doha. All countries, including Nigeria, have a role to play in ensuring that we reach a conclusion that stands to benefit everyone.

Where Nigeria fits in to the UK agenda

These last few days I have been able to meet with many of Nigeria’s political leaders of all affiliations. One clear theme ran through those discussions: the strong will and resolve to develop a renewed partnership between the UK and Nigeria that builds prosperity for both our countries on the solid base of our long established friendship. And with good reason. We are partners on the global stage. The UK and Nigeria both sit on the Security Council of the United Nations this year and we have been working hard together in New York to address shared challenges to global stability. A telling recent example has been Cote d’Ivoire, where Nigeria has spoken with a strong voice to defend the principle of democratic succession. It is around such values and principles that our countries come together as members of the Commonwealth, to which the UK Government has pledged renewed attention and resources. We look forward to working with Nigeria at the Heads of Government meeting in Perth and beyond to reinvigorate this unique family of nations which promotes democratic values, development and prosperity. And Nigerians in diaspora play such a significant role within that family. In the UK, Nigerians are prominent in every sector of society; in law and medicine in sport and music– and in politics. Increasingly British Nigerians are re-investing in Nigeria. I want to encourage that enterprise, and deepen my own engagement; something I plan to do over the coming months. In my opening remarks I said I wanted to see British businesses making the most of opportunities in Africa. The potential here in Nigeria is huge. One of the world’s leading financial analysts at Goldman Sachs recently predicted that, with the right reforms, Nigeria would be the world’s fifteenth largest economy by 2050.
And Nigerians can make that happen. Nigeria’s population – the largest in Africa - is young, dynamic, and entrepreneurial. I want to encourage British companies to forge partnerships with Nigeria, exporting their goods and expertise, in education, construction, financial services, and the energy sector to a willing partner. Some British companies are already here: Standard Chartered Bank, Diageo, PZ Cussons, JCB and many more have major investments in Nigeria, and that’s without mentioning the oil and gas industry. But there is scope for more.

Nigerian progress on governance reform

Here in Lagos, I am seeing that economic potential being realised hand-in-hand with improved governance. In my short time in this city, I have been struck by its size and strategic significance as well as its dynamism, energy and abundant optimism. I do not underestimate the challenges for those charged with the responsibility of running it and planning its future, given its rapid growth and the demands placed on the public services, environment and critical infrastructure. But it’s clear to me from my meetings how far the current State Administration under Governor Fashola has brought the city in a relatively short time – and based primarily on tax revenues. Improved business-friendliness, including in security and infrastructure, are factors that make an impact internationally and will attract the attention of worldwide investors – as we have already seen in terms of record levels of commercial enquiries from the UK. Progressive policies make a genuine difference too. For example the openness to public-private partnerships, business-friendly tax regimes, and a clear commitment to accountability in public office all contribute towards growth. While some features of Lagos are unique –the size and productivity of its port and population - but what is happening here is raising the bar of accountability and performance for other States and cities too. The UK is excited about Lagos. We want to be a part of its future, as it grows in African and global importance. The reforms necessary to enable economic growth and attract investment are also being made at the national level. The UK applauds Central Bank Governor Sanusi’s drive to address the widespread financial malpractice that had threatened to undermine Nigeria’s banking system. One of his first acts was to commission a sector-wide audit that exposed significant frailties and diminished capital bases across several banks: the latter the result of imprudent and sometimes improper lending. This has led to the removal, and in some cases prosecution, of eight CEOs. He has now established an Asset Management Company to soak up some of the sector’s remaining bad debt and to encourage a return to private sector lending. International recognition has followed: Governor Sanusi was recently named Central Bank Governor of the Year for Sub-Saharan Africa by Emerging Markets Magazine. This is deserving recognition for the pace, quality and courage of reform that he has brought about. I know many of you here will agree that Nigeria’s power and energy sectors require both legislative reform and investment if they are to act as a force multiplier for the economy. President Jonathan has recently expressed confidence that a new Petroleum Industry Bill may be passed before the end of the current legislative session in May. Bringing about a more coherent regulatory structure and improving transparency in the industry is greatly needed. At the same time, it’s important that any Bill encourages further necessary investment that will allow Nigeria to take full advantage of its natural resources in a sustainable, responsible way. The President has also made progress on improving domestic power supply a priority, launching a Power Road Map last summer. I am sure that British firms will be competing hard to bring their expertise to this ambitious project. We want to help keep the lights coming on all over Nigeria.

The UK’s Prosperity plans in Nigeria

For all the reasons I’ve mentioned today, the UK is committed to making our Prosperity agenda work here in Nigeria. There are two main strands to that: upping the tempo of our commercial engagement, and working with Nigeria on the reform programmes necessary to create the enabling environment for growth. On the first strand, my ambition- and I firmly believe we can achieve it- is to double bilateral trade by 2015. My visit here, during which I have taken the opportunity to talk with the leaders of the Nigerian business community, signals the start of a year of renewed commercial engagement by the British Government. Next month, I will speak at an event to promote British investment in Nigeria at Arsenal Football Club’s Emirates Stadium, and the next day we’ll hold another event at Old Trafford in Manchester. The Lord Mayor of the City of London will visit Nigeria later in the year and UK Trade and Investment will continue to drive forward their hugely successful work to introduce UK firms to the market. Let me provide you with an example of the work they do: UKTI has recently forged a link with Dun & Bradstreet, the world’s foremost credit agency. One of the most difficult aspects of doing business in Nigeria, indeed around the world, is how to build trust between different companies; Nigeria has suffered as a result of a poor reputation. This provides a process so that UK companies can commission a D&B report on any company that approaches them. The D&B number is then valid worldwide and gives the company credibility. In reverse we encourage Nigerian companies to ensure validation by applying for a D&B number. We are officially launching the process in March 2011. I’ve already spoken about the importance of Doha. The Prime Minister urged action to conclude the Doha Development round this year when he spoke at the World Economic Forum in Davos last month. We’ll keep working on that too. But to reap the long term benefits of trade and investment, it is very important that the UK works with Nigeria on the second strand of the Prosperity agenda to promote good governance, including through economic and democratic reforms. These reforms will underpin sustainable growth for Nigeria. Our Department for International Development is already very active in Nigeria. Its programmes have raised incomes for farmers and are expanding access to financial services and creating jobs in targeted sectors. Advisory work on infrastructure and business is creating the conditions for more private sector investment and wealth creation. In recent weeks and months, events in Tunisia, Egypt and Cote d’Ivoire have renewed the world’s attention to the principles of democracy and self determination. The UK firmly supports democracy and believes that believe that individuals should be free to make choices about how their life is governed. We want to help embed Nigeria’s democratic structures and so are committed to working with Nigeria to deliver credible and peaceful elections in April. We have worked with electoral experts, with civil society, with the judiciary, national assembly and the national electoral commission to help achieve that, and to build those institutions for the long term. In my meetings this week, I have urged Nigerian leaders to deliver the open and peaceful elections that they have promised, and that Nigerians deserve. That means campaigns free from inflammatory rhetoric and hate speech, and zero tolerance for any attempts to manipulate the outcome. Our Prime Minister, our Foreign Secretary and the Commonwealth Secretariat who visited this country in recent weeks have all given the same messages over the last six months. It is now time for Nigeria’s leaders to make good on their promises. The world is watching. We are convinced that well-run elections, in which Nigerians can credibly choose their new Government and elected representatives at all levels, represent the path to a prosperous and peaceful future. I can assure you that the UK, with partners in the international community, will do all we can to support that process. As I have said this morning, the UK’s prosperity agenda is about partnerships that build growth in our own countries and in the global economy. This week, I heard a Nigerian proverb that says “A man cannot sit down alone to plan for prosperity.” I am determined that today and in the future, the UK and Nigeria will sit down together. Thank you.