The City of London is the world’s greatest financial centre, with over $8tn in assets. More African companies are listed on the London Stock Exchange than anywhere else in the world and it plays a crucial role in helping Africa raise much-needed capital for its urgent development requirements. As the UK heads towards Brexit, the City is looking to create deeper relations with Africa. By Peter Estlin*, the Lord Mayor of London
The embrace of free trade and free markets across the continent have acted as the greatest agent of human progress the world has ever seen. Market economies across Africa have resulted in increased life expectancy, the shrinking of absolute poverty and hugely improved access to education.
There is still more to do of course. Africa’s population is set to double by 2050 and as many as 18m extra jobs a year will need to be created to meet that demand. But with its collective GDP set to skyrocket beyond $3tn within the next decade, the Fourth Industrial Revolution gives Africa the opportunity to propel itself towards truly inclusive and sustainable prosperity.
My predecessor as Lord Mayor, Charles Bowman, was present when the UK Prime Minister, Theresa May in her speech in Cape Town in August stated that the City of London – as the world’s leading financial centre, with more than £8tn of assets under management – is an unrivalled future investment partner of choice as Africa looks to realise its full potential. If Africa is to meet the challenge while also achieving the UN’s Sustainable Development Goals, it will need access to capital and to create investable investment assets. London’s scale and innovation means it is uniquely placed to deliver this growing demand.
As the location for 11% of the world’s fintech industry, the UK is helping to bring basic financial services to hundreds of millions of unbanked people across Africa, while UK fintech firms, such as Azimo and WorldRemit are making it cheaper than ever before to send remittances back home, fuelling local economies.
I am working closely with the UK government to share UK expertise and grow Africa’s fintech industry, identifying opportunities for further private investment and sharing business models.
New raft of opportunities
That’s not all. For instance, more than 110 African companies are listed on the London Stock Exchange – more than anywhere else in the world – and in November it saw the listing of the first local currency corporate bond from Ghana and West Africa, worth GHS45m ($10m).
Quantum Terminals Group (QTG), a leading energy infrastructure developer in Ghana, will use the bond to support the growth of its liquid petroleum gas (LPG) storage business. Because LPG generates significantly less CO2 emissions than oil and coal – most commonly used in Ghanaian households – its increased uptake will have particularly beneficial health impacts.
This good work continues in earnest and will progress to the next level in 2019. Here at the City of London, our Sustainable Development Capital Initiative (SDCI) is bringing together key figures across the public and private sectors to develop London’s role in raising the necessary capital to meet the UN’s Sustainable Development Goals.
The first set of findings will be presented when I join the PM at the UK-Africa Summit later this year, while in the autumn, I will take a business delegation to South Africa and Kenya to scope out a new raft of opportunities. And while we know that Brexit will pose challenges, let me make one thing very clear – the UK will remain alongside Africa as an outward-looking, pragmatic, innovative champion of free trade.
Nelson Mandela spoke boldly of transforming South Africa from a country in which the majority lived with little hope, to one in which they can live and work with dignity, with a sense of self-esteem and confidence in the future. With the arrival of the fourth industrial revolution, that ambition is becoming ever more tangible.
Technologies such as blockchain, AI and much more give our generation the chance to work together to tackle global issues such as access to the financial system and climate change, in turn creating inclusive and sustainable prosperity for millions in Africa. As we approach the middle of the 21st century and centenary of independence for the majority of African nations, together we can provide the means to make Mandela’s bold vision a reality. NA
*Peter Estlin was elected as the 691st Lord Mayor of the City of London in October. As the elected head of the City of London Corporation, he will serve as a global ambassador for the UK-based financial and professional services industry for a one-year term.