My Lords, we recognise the importance of economic growth and we support such growth across Africa to hasten poverty reduction. As the latest African Economic Outlook report says, sustaining economic growth requires capable, accountable government, well balanced tax systems, new and growing businesses, investment, for example in infrastructure and education, and freer trade across African borders.
I thank the noble Baroness for her response. Is she aware that the chair of the Africa Panel, Kofi Annan, has pointed out that some companies are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits while at the same time millions of Africans suffer inadequate nutrition, health and education? NGOs, civil society and responsible businesses, such as Rio Tinto, are therefore calling for mandatory transparency rules. Why, then, did the Government not take an active lead in pursuit of the same objectives by pressing for the inclusion of mandatory rules in the G8 communiqué?
My Lords, as my noble friend Lord Ahmad said on an earlier Question, the previous Government and this one have taken this matter forward. As the noble Baroness recognises, it was very actively addressed at the G8. She will also appreciate from her time in government the difficulties of taking it forward. I hope she will pay tribute to the progress that was made in this regard because we all recognise that this is extremely important. We need to ensure that companies operating in Africa contribute to the development of African countries.
My Lords, in relation to elections in Africa, the AEO report notes that aspects of democratic change, such as the institutionalisation of state structures that respect citizens, social and political rights and foster political and economic transparency and accountability, have not yet taken root in many African countries. What measures are the Government taking to address that in their search for aid effectiveness across the DfID programme?
As my noble friend will be aware, this is clearly a major concern and it is also flagged up in the report. I note with some interest the greater success and prosperity among those countries in Africa that are making progress in this regard. Those countries should very quickly be able to see that it is in their self-interest to take this forward for their greater prosperity.
I applaud the Government’s continuing commitment to the 0.7% figure for the aid budget. In view of the growing risk of weak countries, particularly in west Africa, being caught up in the trafficking of drugs, can the Minister give me some assurance about the priority being given to those very weak states to help them build up and develop governance institutions, the police, justice systems and so on in order to prevent them becoming narco states?
The noble Baroness is right and she will be aware that DfID’s priority is fragile states for those very reasons. I know that DfID has great concern about all the issues that she has flagged up and is doing its best to try to improve the governance and justice systems within those countries. Looking at the report mentioned in the Question, I note that half of African countries still depend on aid and the other half do not. Of the half that do, those are the ones that suffer the kind of fragility that she referred to.
China is obviously now making a bigger contribution to investment in Africa. China was not invited to the G8 and in some respects that might be a pity because China is now claiming that it is observing all international norms and that it is not an exceptional country, as it was thought to be. Is there some way in which the Government are encouraging dialogue with China to ensure that this is the case and that it is observing international norms with regard to investment in Africa?
The noble Lord flags up an area that has caused some concern. One of the reasons why Africa has been particularly resilient in the last period is because of trade with China and other developing countries whereas trade with the EU and the US has been dropping off. There is clearly a benefit for Africa. It is important to try to convey to those who are involved in trade in Africa that it is in their long-term interests to follow the kind of rules referred to by the noble Lord.
My Lords, my noble friend the Minister commented on the half of the countries that depend on trade rather than aid. Can she comment on recent reports that there is a growing risk of piracy in the Gulf of Guinea and that there are more reports of piracy there than off the coast of Somalia? That, of course, is the massive trade route for all goods out of west Africa.
There are a number of challenges and my noble friend has referred to just one. There are many challenges in terms of trade out of Africa and within Africa. The international community and the African countries themselves are trying to take forward better inter-country trade and more effective trade out of Africa.
Last week, Members of both Houses had the opportunity to have a very interesting dialogue with the new chairperson of the African Union Commission, who outlined very clearly her priorities and the priorities of the commission for the next few years. Is it now time for the UK, other European donors and the European Union to put in place a long-term strategy to build up the capacity of the African Union and its institutions to help the continent to support its own development rather than it always being done through bilateral relationships with ourselves and others?
The AU and African countries are building that kind of experience and are doing so in a way that might lead one to be cautiously optimistic. According to the report, more progress has been made where there is better gender equality, and I note that that is also represented in the AU.