In a Bid to Challenge China, Britain Will Reallocate $500 Million of its Aid Budget to Jump Start Private Sector Investment in Africa

African leaders from 20 countries are in London today where they will take part in the UK-Africa Investment Summit. The summit, hosted by Prime Minister Boris Johnson, aims to chart a new post-Brexit course for British foreign policy on the continent that has largely been focused aid and humanitarian development. 

In a bid boost private sector engagement and to elevate the role of London’s financial services hub, known as The City, the government announced plans to direct around $500 million (£395 million) from their $18 billion aid budget to help money from private sector investors to more easily flow to Africa.

International Development Secretary, Alok Sharma, said the money will be used to achieve the following three objectives:

  1. Improve the financial systems and regulations in 45 African states.
  2. Launch a new investment fund to identify and develop projects.
  3. Embark on a joint initiative with the World Bank to nurture local currency bonds.

Although British officials did not specifically mention China when they announced this new initiative, the British media seemingly interpreted the move as an effort to regain some of London’s influence that it seemingly lost over the years to the Chinese and others. 

ADDITIONAL READING:

by Eric Olander

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