Theresa May wants the number one spot

2018-09-02 12:31
British Prime Minister Theresa May, seen here with President Cyril Ramaphosa at round table discussions this week, is competing with China as it looks to expand its operations in Africa (Velani Ludidi, City Press)

British Prime Minister Theresa May, seen here with President Cyril Ramaphosa at round table discussions this week, is competing with China as it looks to expand its operations in Africa (Velani Ludidi, City Press)

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British Prime Minister Theresa May would have given South Africa a miss, were it not for South Africa's change in presidents six months before.

May's predecessor, David Cameron, planned a big visit to Africa in July 2016 to revitalise relations. South Africa at the time was facing a storm over state capture allegations surrounding former president Jacob Zuma, and was not placed on Cameron's itinerary. His visit never took place because May took over as Conservative leader earlier than anticipated.

Zuma paid a state visit to the UK in 2010, but May's was the first visit of a UK head of state since 2013, when Cameron attended former president Nelson Mandela's funeral.

"South Africa was added in because it wasn't on the plan in 2016," a British official told City Press. "It's obvious that South Africa was struggling in 2016 and our relationship was suffering as a reflection of that. The relationship at the top level was nothing like it is now."

Investment-focused policy

May, who travelled with a business delegation, delivered her speech spelling out the UK's Africa investment-focused policy in Cape Town – the same city where British Prime Minister Harold Macmillan in 1960 made his "winds of change" speech that started a process of decolonisation and independence for African nations.

With the finalisation of Brexit negotiations imminent, May announced an expansion of British operations on the continent, including new missions in Mali, Chad, Lesotho and eSwatini. She also sought trade allies in Africa as the Brexit timeline looms.

An additional £4bn (R76.14bn) programme of UK investment is set to pave the way for at least the same amount in private sector financing, May said, with job creation at the centre of this. She also announced that the UK wanted to become the number one in Africa among the G7 investors by 2022. America is the current number one.

China

Overall, however, Britain was facing tough competition from China, which "has been setting the pace on investment" in Africa. Britain is still bigger than China in terms of stock, but China's flows are now bigger.

May's visit came on the eve of the Forum on China-Africa Cooperation in Beijing, where African heads of state will be meeting with China to discuss cooperation and investment. President Cyril Ramaphosa is also paying a state visit to China ahead of the forum.

"While we cannot compete with the economic might of some foreign governments investing in Africa, what we can offer is long-term investment of the very highest quality and breadth," she said, with apparent reference to China.

Ramaphosa used Tuesday's round table discussion with May and a business delegation to invite the British to come to his investment conference from October 25 to 27. His aim is to secure $100m (R1.4bn) in investment.

A British official, who sat in the meeting, said he was convincing. "He was clear throughout the discussion that jobs is the focus," he said.

Land reform

Asked whether Ramaphosa managed to put investor fears at ease about the hotly debated land reform process, he said Ramaphosa raised the issue even before he was questioned on it.

Parliamentary consultations on changing the Constitution to allow for land expropriation without compensation are under way. In her speech May did not express an opinion on the end goal, but said the UK supported a sound process.

"We have to respect this is a South African process," the official said. "It's not really our business. Our interest is in helping support a positive business environment and an environment where investors feel confident in the security of their existing investments and incentivised to add their investments and not detract from them."

He said a lot of investors were reassured and more convinced hearing about the process "from the horse's mouth".

"It's useful in stabilising things, as they do hear different noises from other people."

Ramaphosa was "very clear about the direction he wanted to take the debate in" and investors emerged from the meeting reassured.

From South Africa's side, Ramaphosa was keen to learn from the UK's experience in designing its National Health Service, as South Africa was envisaging a similar project.

John Battersby, director of the SA Chamber of Commerce in the UK, said May's visit built on the relationship started at the Commonwealth summit. Both leaders found themselves "negotiating hostile political territory" domestically. May could offer Ramaphosa trade while Ramaphosa could offer her "credibility and an ally in Africa who sees benefit for South Africa in Brexit". China, the UK and South Africa could also build joint development projects in the continent, he said.

Read more on:    theresa may  |  cyril ramaphosa  |  uk  |  economy  |  investment  |  trade

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