Greening: Supporting growth and jobs in Africa can beat poverty

28 Apr 2014 10:38 AM

Development agencies must invest more in supporting Africa's growth, International Development Secretary Justine Greening has said. 

Speaking during a keynote speech to the London Business School, Ms Greening set out how the UK’s aid to Africa is undergoing a ‘quiet revolution’ to focus on creating sustainable growth and jobs in addition to basic services like health or education.

The call follows the announcement of the UK’s first ever impact bond to drive much more private investment into preventing the deadly but neglected sleeping sickness in Uganda.

Justine Greening said:

High levels of growth, young and growing populations and a wealth of natural resources mean that Africa has tremendous potential. We must keep that momentum going, accelerate growth even faster and ensure that everyone reaps the benefits.

Our aid is undergoing a quiet revolution in Africa. We are focusing more resource on creating the jobs, investment and growth emerging and frontier markets need to escape poverty.

Emerging nations, aid donors and private investors must collaborate to make sure every penny spent on development has the greatest possible impact.

Examples of the UK’s support for economic development in Africa include:

• The UK’s first ever development impact bond to bring together private and public investment in the prevention of sleeping sickness in Uganda. A £1.5 million inception project will research and design a bond to purchase drugs to treat infected cattle before the disease spreads. Private investment will be followed by a further ‘top up’ investment by aid donors after specific results have been achieved.

• More than double aid spending on economic development across the world. In 2015/16 DFID will plan to target £1.8 billion of its budget on economic development, more than doubling the amount spent in 2012/13. This is on top of indirect funding through core contributions to multilateral organisations

• Share UK skills: Next month, the UK will deploy staff from chartered accountancy institutes to developing countries such as Zambia, Nigeria and Ethiopia to help raise professional standards, improve financial reporting and build investor confidence.

• Boost capital markets in frontier economies: The UK recently signed the UK’s first Memorandum of Cooperation with the London Stock Exchange Group to support emerging capital markets in Africa. This will allow the LSEG Academy to expand its training in Tanzania and, in time, across East Africa

• Help women entrepreneurs and businesses: DFID is investing £4.4million in Women’s World Banking, a global network of financial service providers. This investment will provide over one million women across Africa with access to financial services.

• Co-invest in development projects: DFID will set up four new trial partnerships with businesses and not-for-profit organisations working in Tanzania, including new tea and rice estates. DFID will collaborate with social enterprise and business with loans and equity, generating a return that can be reinvested.

• De-risk business investment in frontier economies by backing investment insurance in frontier economies including Burma, Sierra Leone, Zimbabwe and Nepal. A lack of adequate and affordable insurance prevents promising business investment in fragile states. A £20 million investment in the Multilateral Investment Guarantee Agency will enable it to support up to £270 million of new private investment in fragile countries.