Australia’s Partnership with Africa

879 views Published on 12th September 2017

Many countries in Africa have made great strides towards a better future with a young, increasingly educated and connected, rising generation that are willing and able to build 21st century economies and supporting vibrant societies.

Globally, one in six people are African. By 2050, that will be one in four. Along the way, African countries will have some of the world’s best ratios of working-age people relative to dependents and that is a great competitive advantage. In addition to this demographic dividend, Africa has abundant resources, and markets for them in Asia.

In Africa’s Agenda 2063 and the African Mining Vision it’s made clear that governments intend to harness this opportunity along with its domestic dynamism to achieve sustainable growth and human development.

African countries, like elsewhere, face challenges including how best to respond the rapid pace of change and how to establish an environment supportive of an investment that drives employment and helps life standards of living. African leaders, in government and business, are opening their economies to the world having assessed that doing so is in Africa’s interests.

Now, new foreign direct investment in Africa will total almost 60 billion US dollars this year. African leaders and their representatives are travelling the world to study other countries, to reflect on the experience of other governments, so that they can design their best path forward for their country.

Recently, Australia broke a world record – 26 consecutive years of uninterrupted economic growth. 26 years of uninterrupted economic growth and as the World’s 13th largest economy, yet about 53rd in terms of population terms, Australia has a positive economic experience to share. To an extent, Australia’s economy has much in common with many African economies. We have ample resources and we have long depended on our ability to attract capital from overseas.

As we know capital is agile and nimble and will go to where it finds its most attractive home. We grew beef we created other significant farm industries with foreign investment just as we developed our manufacturing and mining sector with foreign direct investment.

Today, of our top five exports, three come from minerals and energy production. We are indeed a minerals and energy superpower. I set a great deal by the future I see for our extractives sector and today the Australian government deliberately and consciously governs with a view to attracting more foreign investment, not less, more. Bringing with it innovation and skills, and generating further economic growth for our people and those to whom we export.

We know from experience that the high standards of health and education that Australians enjoy depend upon our overall economic competitiveness and the level of our national income. We know that to compete in a globalised international economy, we have had to open up to the world, and this has made us a richer place in every sense.

Australia’s been a strong supporter of global trade liberalisation based on agreed rules, dispute settlement processes and conditions recognising certain temporary national needs. Liberalised trade opens many options to economic diversification.

We believe that cultural diversity has intrinsic value. Our government believes that, and Australia is one of the most successful, if not the most successful multicultural nations on earth. We have welcomed people from every corner of the globe to Australia over generations, for example, our communities have more than 600,000 Australians of African descent here. Australia is also socially cohesive, it embraces freedoms with sound and accountable institutions, traditions of tolerance, and a pragmatic appreciation of the link between openness and prosperity.

We aim to regulate our economy and govern our society so that everyone has the opportunity to do well, or as we call it, the “fair go.” These are the values and interests that Australia can bring to our relations with African countries.

At least 170 Australian extractives companies are operating across 35 African countries many of them base their Australian operations here in Perth, we like to think of Perth as the centre of Australia’s extractives and mining services industry.

These Australian companies have invested more than $30 billion directly in African countries. To get a sense of the impact that investment can have, let me give you a case study, Base Titanium’s Kwale Mineral Sands operation in Kenya. Base and its contractors currently employ more than 900 people, almost all of them Kenyan. Base plans to continue its operations at Kwale at this level for another ten years, directly contributing an estimated 1 billion US dollars to Kenya’s economy.

On completion, Base will hand over to the local authorities a working dam, operational boreholes, an electrical system, a road and port. That is an important partnership with Kenya, with current, future and continuing value but Base Titanium is also partners with the Australian Government and Australian value-fashion group, CottonOn, in establishing ethical cotton production in Kenya. So the partnership assists local Kwale smallholders to supply cotton for clothing and sell cotton seeds as animal feed. CottonOn purchases the cotton and exports it, bringing the benefits of global value chains, the supply chains, to the women and men of Kwale and the aim is to have 10,000 profitable smallholder cotton farmers in the local region by 2020. This is sustainable development which works by boosting economic growth.

It also points to the broadening of Australia’s commercial interests in Africa: from our strong base in extractives and mining services, infrastructure and energy, into retail and professional services. The opportunity for mutual growth in our economic partnerships in these and other sectors is enormous.

Australian companies work not only in Africa, but with Africa. Illegal mining, for example, is a problem in many countries: tragic for those who die mining without the safety standards of regulated miners, damaging for the environment, and costly to governments and legitimate mining companies.

In Ghana, for example, our High Commission has brought together various stakeholders to support the Government in looking for ways to overcome this problem. Many Australian resource projects in Africa are outposts of good governance in remote locations.

The Australian Strategic Policy Institute, ASPI, has studied, with Australian Government support, the impact these projects can have on local communities in Burkina Faso, Kenya and Ghana and the project points to the importance of bringing together local knowledge, economic opportunity and security perspectives and I hope that you hear more about this study during this conference.

Our emphasis today is on opportunity. The Australian Government encourages the people of Africa to see us as an open-cut mine for lessons-learned, for skills, for innovation and, I would like to think, inspiration. Events like this one are invaluable, and I am delighted that Australia-Africa Week in its second year, is also gathering momentum.

For every policy conundrum there is an Australian solution worth considering. Draw on the more than 6,000 Australia Awards alumni who have returned to Africa with new skills, like Justin Anumnu of Nigeria. In 2015, Justin took leave from his job in the Nigerian Geological Survey Agency and came to Australia to attend the University of Queensland’s short course on Local Economic and Social Development in Extractives. Back at home in Nigeria, Justin created a community development agreement between mining companies and local communities.

He believes this agreement provides a stronger social foundation for the mining project, and its economic value for local communities and the miners who work amongst them.

In discussion with our African High Commissions and Embassies about what our scholarship scheme for overseas post-doctoral students – this is what we call The Australia Awards – this is what it should focus on, African Governments I’m told have consistently pointed to mining governance, including revenue management and contract negotiations. Next year, around 30 African recipients of the Australia Awards will begin Masters Degree courses focused on the extractives industry at Australian Universities, many of them here in Perth.

This is in addition to the 57 professionals, and I must say almost 45 per cent of them are women, studying specialised short courses on mineral energy economics and trade negotiations at Australian institutions in 2017 and 2018. These are skills that equip African people to benefit from Africa’s resources – in partnership, we hope, with Australian investment and expertise.

Here at Africa Down Under, with our shared interest in natural resources, we know that we must understand the global commodities market and the global economy. The global economy itself depends on an international order of rules and conventions and this is the third dimension in Australia’s partnership with Africa: we have a common interest in the global system of international relations.

Australia recognises that African nations put a high priority on African economic integration, and for good reason. Australia supports this objective, just as we have supported economic integration in our own region.

From the late 1980s we helped build APEC – Asia Pacific Economic Cooperation, and we continue to work towards a free trade area of the Asia Pacific. Since the 1960s, we’ve also actively supported the economic integration of South East Asia. So Australia champions economic integration and we certainly champion the international norms and frameworks that directly support Africa’s priorities and its rise.

Australia was the first government to commit finance and technical support to the UN Economic Commission’s African Minerals Development Centre. We worked hard for the breakthrough in the World Trade Organization in Nairobi in 2015 that ended agricultural export subsidies which suppressed the profits which could come to you from farm trade.

We pushed for the Trade Facilitation Agreement which will unlock one trillion US dollars a year in global GDP, including by supporting economic integration across the continent of Africa.

We stand up for transparent and competitive international frameworks for foreign investment, including through our influence in international financial institutions. We have signed on to, and provide support to, the Extractive Industries Transparency Initiative. As Chair this year, we vigorously support the Kimberley Process to safeguard the diamond industry. We contribute to the global effort to end piracy off the Horn of Africa.

Australia ranks eleventh amongst nations that fund the UN’s peacekeeping operations, much of which is undertaken in African countries. We’re taking forward innovative ways the UN can do better in the fight against terrorism and we join in coalitions to defeat terrorist around the world.

We have brought new energy to the Indian Ocean Rim Association, which we see as a platform for high-level economic and security cooperation in the ocean that connects Australia with East African countries.

These endeavours support both Australia’s interests and those of African countries. Australia’s international outlook will be clearly stated later this year when we publish our Foreign Policy White Paper which will provide a framework for our international engagement for the next decade. It will look at how we can protect and strengthen international rules to guide the behaviour of states, promote open economies and rise to common challenges.

Australians and Africans, working together, can build strong companies and partnerships that strengthen communities and nations. We are I believe at the beginning of an upswing in relations between our countries led by our partnerships in resources, as the majority of Australia’s projects are in the exploration stage, or pre-exploration. There’s enormous potential for Australian investment to increase steeply, as projects move through to the operating stage.

Our collective challenge is to ensure that we circulate best practice, in business, in relations with government and in social and environmental impact, amongst this audience and more widely. With such a large attendance here, numerous delegations and substantial opportunity for discussion, all this is possible.

The Hon Julie Bishop MP

Australian Minister for Foreign Affairs.


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