The Prime Minister has opened her tour through South Africa, Nigeria and Kenya with a keynote speech, setting out the UK’s bold vision for a new UK-Africa partnership. Theresa May strongly recommitted to spending 0.7% of British GNI on aid and showed the UK’s commitment to work in partnership with African countries. She also referenced the successes UK aid has achieved around the world, under a strong leadership by the Department for International Development (DFID). This is a welcome reassurance of Britain’s continuous leadership on development, international aid and humanitarian relief – particularly ahead of the government’s next spending review and as Britain re-calibrates its power in a post-Brexit world.
Save the Children welcomes the focus on increasing prosperity throughout the African continent. As a critical route out of poverty, it is absolutely right that UK aid helps to develop the economies of low-income countries. Working in partnership with African countries, which are home to a young and dynamic population full of potential, but also to a large number of the most deprived and marginalised people, is key to overcoming global poverty and achieving the SDGs.
What concerns us is the idea of using UK aid solely to deliver UK national interests. UK aid should strive to bring win-wins, and it will in the long term, but only if it prioritises eradicating poverty and tackling inequalities in the first place. If designed primarily to serve national interests, UK aid tends to be bad value for money. Therefore, to ensure this strategy is successful, it needs to get two tests right – as outlined below. First, ensure that the partnership is truly African-led, and thus enables local populations to transform their nation’s prospects and opportunities. And second, any investment strategy needs to also put the poorest and most marginalised at its heart.
1. UK aid needs to support African countries’ businesses, build local jobs and institutions
UK aid can be a genuine win-win for the UK and African countries, if it is helping to build a healthy, stable and prosperous world. This will benefit populations and open up investment opportunities all over the world, including in the UK. But to get to this point, the focus of investments and development activity needs to be on delivering for people in African countries, instead of simply looking at what will produce returns for British businesses.
The Prime Minister committed to an additional £4 billion programme to invest in African countries. £3.5 billion of this will delivered by the CDC, the UK’s development finance institution. This is a good start. But in order for this strategy to lead to sustainable returns, including for Britain, as a first step the focus has to be on local return: strengthening local business, generating jobs in African countries, improving public services, local institutions and tax systems. UK aid will lead to a stable world when it drives transformational change.
For instance by helping to build tax capacity in country, so African governments can finance universal health coverage and quality education for their population. The UK has already committed to using parts of its aid spending to help build local tax systems, for instance with the Addis Tax Initiative. The PM’s announcement yesterday on activities on tackling Illicit Financial Flows, and repatriating funds from tax evasion to countries such as Kenya can usefully complement this approach. As long as UK aid focuses on driving change for people in country, British business will benefit from stable social systems and great investment opportunities in the long term.
2. UK aid has a core mission to fulfil: delivering on poverty reduction and development for the most deprived and marginalised people, including children.
With the Sustainable Development Goals, and the pledge to Leave No One Behind, the UK has committed to changing the world to the better. UK aid and investments should reach the furthest behind as a priority, no matter which sector is addressed. Part of this ‘leave no one behind’ pledge is to ensure that aid is not diverted away from the most deprived and marginalised groups, or the sectors they benefit from most. Hence successfully investing in Africa’s prosperity is not only about the sectorial what, but also the focus and how – which can be outlined at the example of health below.
An example of how an investment’s focus can leave the poorest behind can be found by looking at a few of CDC’s past investments in developing countries. Historically, there has been a lot of criticism of the CDC’s investment in health. The bias has been towards investing in private healthcare, ostensibly for economic development and employment growth, but without considering the impact on the health infrastructure in a country. Investing in profitable health companies means hospitals which provide high quality paid-for services. But they target the wealthy, expats and health tourists, not health services which the general population of a country could ever use. This is drawing publicly-trained nurses and doctors from the public system to the better paid luxury health care industry, and undermines the case for increased and fair taxation to pay for health.
Recently, criticism of this has led to the CDC committing to consider the impact of their investments on the “health ecosystem of a country”. It is important that any UK aid investment keeps the focus on the most deprived, and in the case of health specifically, invests in public health services, free to use for the whole population including the most marginalised people. The UK’s focus on Leave No One Behind is a key criterion that needs to be integrated in any investment strategy. The PM’s continuous commitment to work in difficult places such as fragile states and countries affected by conflict – where a large part of the poorest people lives – is also most welcome.
If these key tests are met UK aid can create a genuine win-win: UK taxpayers’ money can continue to help addressing global problems. As the PM referenced UK aid under DFID leadership has for instance helped put 11.5 million young people in school. It will also benefit our own country – by generating stable investment context, quality social systems that ultimately curb migration, growth in African countries and the potential this holds for our own businesses.