Britain is being overtaken by emerging economies, such as India and Brazil in the “race” for a share of Africa’s new and fast-growing markets, according to Olusegun Obasanjo, the former president of Nigeria and leader of its ruling party.
Olusegun Obasanjo said he believes Britain could claim a much greater share of Africa's finance, energy, consumer and agriculture markets, but was too focused on other markets Photo: AFP
In an interview with The Telegraph, he warned Britain was so focused on opportunities in China and India that it was missing out on the world’s hidden growth story. If it does not wake up to Africa’s rapid development, Brazil and China could replace the City of London as the continent’s main source of finance capital, he said.
Mr Obasanjo was speaking as head of a trade delegation to India, some of whose leading companies have invested heavily in Africa’s energy, power, steel and agriculture sectors in the past five years.
He pointed to sub-Saharan Africa’s 5.5pc growth this year and predicted foreign direct investment of more than $150bn (£95bn) by 2015. He said he feared Britain may not get its share of the spoils if it does not wake up to the scale of opportunity.
“The fact is that in the past three days or so the Brazilian economy has overtaken the UK economy. The Chinese are so aggressive in Africa and the Indians are now following suit. The Brazilians are not too far behind. Are countries like the UK doing enough? Having had the advantage of being the colonial master, they can do more than they are doing,” he said.
Mr Obasanjo said he believes Britain could claim a much greater share of Africa’s finance, energy, consumer and agriculture markets, but was too focused on other markets.
“Is it that they see Africa as not yet becoming an emerging market and therefore [are] paying attention to China, Brazil, India and maybe Russia and neglecting Africa? Well those emerging markets that they’re now paying attention to are now paying attention to Africa,” he said.
Their attention has been caught by Africa’s growing population – expected to rise beyond 2bn by 2050 when 60pc of people on the continent will live in cities and consumer spending is predicted to top $1.5 trillion.
Between now and then, the continent needs a significant increase in foreign investment in infrastructure, technology and management systems, but according to Mr Obasanjo, Britain is lagging far behind in the race to provide and finance that investment.
He pointed to healthcare as an example of a sector where Britain has a distinct advantage – many Nigerians traditionally visited London for private medical treatment, but now travel to India.
“India is now building private hospitals in Nigeria, in spite of Nigerians coming here to India, they’re saying 'this cannot go on forever, let’s take the healthcare there, manage it and hold it’. Time was when it was Britain,” he said.
Britain’s historical advantage in Nigeria had been built upon by Tony Blair, he said, when the former prime minister agreed a major debt relief programme and advised on economic reforms. “Britain should take advantage of that,” he said.
David Cameron led a major trade delegation to Nigeria in July last year in an attempt to raise trade from last year’s £3.8bn, mainly oil imports and sales of petroleum products, second only to South Africa, which topped £5.5bn.
Following the visit a number of new deals were won by British companies, including Monetise, which secured a contract to spread mobile phone banking throughout the country, while companies such as Shell, Unilever, GlaxoSmithKline and Standard Chartered remain significant investors.
But former president Obasanjo and his delegation believe that Britain, and especially the City of London, could be playing a more central role in financing Africa’s development, and that Britain will lose global influence if it fails to do so.
Finance is still cheap in Britain, said Babatunde Fagbemi, an advisor to Mr Obasanjo and chief executive of the Maevis airport infrastructure group, but it is not reaching Nigeria.
“If it refuses to lend money… we turn to China or Brazil, then the end will be in line for the UK economy. Then the level of influence will be zero. You do not borrow money from them or get technology from them, you do not have their market in mind. What else will Britain be selling?” he said.
Darshan Desai, of London-based Euromax Capital, which promotes and finances Indian and British investments in Africa, said that Britain’s attitudes to Africa, of a continent “frozen in poverty, violence and disease” were outdated. Its growth rate is second only to China and India, he addded, and there are significant opportunities in construction, commodities and consumption.
“British business is still largely oblivious to Africa’s new potential. If the UK fails to pay attention to changes afoot in Africa and remains set in its notions, a giant business opportunity will be missed,” he said.
