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I understand that it is the will of the House that motions 1 to 5 on international development be debated together. The debate will last up to 90 minutes. When the first motion has been decided, I will call the Minister to move the other motions formally. If a Member objects, the motions will be taken separately. I now call the Minister to move the first motion and speak to all five motions.
I beg to move,
That the draft African Development Bank (Fifteenth Replenishment of the African Development Fund) Order 2020, which was laid before this House on
With this it will be convenient to discuss the following motions:
That the draft African Development Bank (Further Payments to Capital Stock) Order 2020, which was laid before this House on
That the draft International Development Association (Nineteenth Replenishment) Order 2020, which was laid before this House on
That the draft International Development Association (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on
Thank you, Madam Deputy Speaker. It is good to see you in your place. The orders will permit the UK Government to make financial contributions to the African Development Bank and the African Development Fund, in addition to the World Bank International Development Association, up to the stated values on the orders. I propose to start with the three statutory instruments on the African Development Bank, then move on to the two SIs on the World Bank IDA before concluding.
As the House knows, Africa remains the poorest continent on the planet, and 24 of 30 poorest countries are on that continent. Sadly, by 2030, 90% of extreme poverty is likely to be concentrated on that continent, and instability remains a persistent challenge. Until last year, Africa was growing fast, and in 2019 it experienced 3.4% growth in gross domestic product. Covid has had a significant negative impact, however, and recent World Bank estimates suggest that GDP in Africa will shrink by just under 3%. Sadly, 26 million more people will be pushed into extreme poverty. The African Development Bank is a key regional partner for the UK in delivering development, prosperity and our security objectives in Africa. It has significant financial clout, a strong regional identity and deep knowledge, and it is very much a trusted partner across the continent, which allows it to tackle sensitive issues.
That is very reassuring. Does my hon. Friend acknowledge that of those scandals that have driven the readers of the Daily Mail into a state of apoplexy over the past decade, 99% of them, I will wager, were administered not by the Department for International Development, but by other Departments? Will he ensure that this reorganisation is a genuine merger and not a hostile takeover?
I assure my right hon. Friend that it is a genuine merger. As he knows, I am not a betting man, but it is important that official development assistance is used well not only by the Foreign Office but across all Departments. This merger is about taking a step up, not levelling down to the lowest common denominator. There is an opportunity to put development at the heart of everything we are doing more generally, but I will not stray into comments that were made earlier today about the merger, and with the House’s permission, I will focus specifically on the African Development Bank, and later on the World Bank.
The ADB’s five key areas are to light up and power up Africa, to integrate, to industrialise, to feed, and to improve the quality of life across the continent. Those are closely aligned with the UK’s priorities. The majority of the bank’s lending is targeted at addressing the large infrastructure gap across the continent, and it is focusing very much on transport, energy, water and sanitation issues.
I had a chat to the Minister prior to this debate. In my constituency of Strangford, many churches are involved in work across Africa, particularly the Eden Mission in Newtownards, which does significant work in Eswatini, which those of us from further back know as Swaziland. The Minister referred to infrastructure investment, and there is a real need for investment in the electricity market. South African supplies have a sharply inflated price, which is holding back technology, and even learning for children, who have been provided with shared computers from Northern Ireland as learning tools. Will the Minister consider some help for Swaziland, to ensure that it can run those sites with the electricity it needs?
I know my Big Bend from my Piggs Peak, having lived in Mbabane for a year, a number of years ago, and I knew the problems of flickering lights and power stability. I am saddened to hear that it is still a problem with Eskom and South Africa, but power distribution across the continent is a key issue. I am not absolutely sure whether such funds are the right mechanism, but I would be more than happy to commit to talking to the hon. Gentleman about that, alongside our high commissioner in Eswatini—that is one of the new posts that opened up relatively recently—and to discuss what more we can do in Eswatini on electricity and a number of other issues. I thank the hon. Gentleman for his helpful contribution.
The African Development Fund is also supporting the continent to respond to covid, providing $10 billion of financing and technical assistance to help to mitigate the economic and social impacts, and to support recovery beyond health and humanitarian issues.
Turning to the specifics of the order, the first order permits the Government to purchase new ADB bank shares. This will maintain our 1.7% shareholding, and to do so we would need to pay £95 million over eight years. This order also makes provision to put in another £50 million of capital provisionally to allow the additional purchase of shares in the future should the situation and budgets allow. The bank provides non-concessional yet inexpensive loans to middle-income and to credit-worthy low-income countries, and also critically, to the private sector in Africa.
Last October, governors agreed to a 125% increase in their general capital to boost the capital stock, enabling it to lend annually from £5 billion currently to more than £13 billion in 2030. The bank has made strong policy commitments in UK priority areas, expanding its climate facility and private sector operations.
The second order permits the UK Government to provide a contribution of up to £633 million to the African Development Fund’s 15th replenishment. The fund provides grants, low-interest loans and technical assistance to Africa’s poorest countries, and it is replenished normally every three years. The negotiations for replenishments concluded last November and an overall envelope of £6 billion was agreed, financed by repayments of existing loans and new donor pledges of £3.8 billion over the three-year period. Our pledge would maintain the UK’s position, providing significant influence over the fund’s operation. Over the next three years, the fund is expected to provide 6 million people with electricity connections. Six million people will benefit from improvements to agriculture and more than 20 million will benefit from improvements to transport. The fund will support 1 million jobs.
The third and final order on the African Development Bank is to amend an existing order and to permit the Government to provide an additional contribution of £66 million to support the African Development Fund’s participation in the multilateral debt relief initiative, which is very similar to the final order for a different institution. The multilateral debt relief initiative supports debt relief and enables countries to release resources, or to have released resources, to spend on poverty reduction and development that would otherwise be spent on unserviceable debt. The African Development Bank remains an important strategic partner across the board, particularly on climate change.
Let me turn now to the final two remaining orders relating to the World Bank and the International Development Association. This is the institution that provides grant finance, low interest rates and technical assistance to the world’s 76th poorest countries—countries that are not credit-worthy. Many of the most fragile countries at risk of instability and conflict are covered within this number. In recent months, these countries have been particularly hard hit by the covid-19 crisis, making the case for these orders even more poignant. IDA has responded to the covid crisis by making rapidly available additional support. It has a strong record of delivering results—for example, on supporting vaccines to millions of children and supporting childbirth.
IDA combines donor contributions with repayments from previous lending operations and market borrowing to provide more than three times the amount of leverage to get new financial commitments. IDA replenishments have taken place every three years since its establishment in 1960 and discussions took place last December and were concluded in this replenishment round, which includes 50 donors, including the UK, with pledges of more than $23 billion. The World Bank expects that to be leveraged up to around $82 billion of financing over the next three years.
The fourth order permits the UK Government to provide a core contribution of up to an average of £1 billion a year to IDA’s 19th replenishment over three years. This will help to vaccinate 140 million children and to provide safe childbirth for 80 million women, electricity for 50 million people, and a social safety net for 40 million beneficiaries.
The final order, as I said earlier, is similar to an existing order that permits the UK Government to provide an additional contribution of £562 million to support IDA’s participation, alongside the ADB, in relation to the multilateral debt relief initiative.
In conclusion, these five orders are in the UK’s national interests and also serve our development equities and interests, not only in Africa but around the rest of the world, through the World Bank.
I welcome these orders and agree that they should be taken together. We will not be opposing them. I welcome the support that they indicate for tackling poverty and disease and removing the burden of debt in Africa and elsewhere across the world.
However, in the context of the Prime Minister’s announcement earlier this week and the urgent question answered by the Foreign Secretary today, it is very important that we recognise that the decision taken will have an impact on our relationship with the African Development Bank and the World Bank institutions, including IDA. It is sad to have to contrast the positive impact of these orders with some of the ill-informed rhetoric that we heard from the Prime Minister on Tuesday on a decision that fundamentally risks undermining our relationship and influence with IDA and the African Development Bank in terms of the impact and oversight of these replenishments, and the debt relief. This decision has been criticised from many quarters, including by Members on both sides of the House and by some of the world’s leading experts. One of those, of course, is the former Prime Minister, David Cameron, who said that it
“will mean less expertise, less voice for development at the top table”— that is, the top table of these institutions. Gayle Smith, the former administrator of USAID, also said that it was a dangerous step backwards. Does the Minister agree that in fact, and in contrast to what the Prime Minister said earlier this week, in the majority of contexts there has always been close co-operation and co-ordination between the different arms of UK international policy, including in Africa, and in relation to the IDA part of the World Bank and its other institutions, as well as the African Development Bank?
It has been particularly concerning, given that we are focusing so much on Africa in these orders, to see the false dichotomy that was set up by the Prime Minister’s comments. He spoke about Zambia and Tanzania, for example, and contrasted them with priorities in places like Ukraine and the Balkans. This is particularly concerning because Zambia and Tanzania have been supported by funds from the African Development Bank and IDA in the past, and of course by DFID’s bilateral programmes. They are both long-standing members of the Commonwealth and countries with which we have had very constructive partnerships over many decades.
This is particularly relevant in relation to the impact of the covid-19 pandemic on Africa and elsewhere, which the Minister spoke about. He and I have discussed that issue outside the House. I want to thank him for the courtesy that he has shown me since my taking on this role in discussing a number of matters on which there is no division across this House. For example, the African Development Bank has been supporting the One WASH programme in Ethiopia. The bank and other partners’ funding has been supporting that ambitious national programme to serve 110 million people in Africa’s second most populous country. As well as the ADB, key partners include the World Bank, the Department for International Development, the Government of Finland, and UNICEF. The programme has been embracing safe water development systems, including boreholes, hand pumps, diesel pumps, gravity pumps and electric grid power to bring safe, potable water to Ethiopians. Water development commissioner Mogesse said recently:
“The One WASH National Program did not plan for the COVID-19 pandemic. But it has prepared us to fight the pandemic better than we would have been without the program, especially in the unserved rural communities.”
That example highlights the sort of impact that the ADB and other funding the UK has provided to the multilaterals has had, not only on tackling covid but on tackling wider water and sanitation issues.
I am most grateful to the hon. Gentleman for giving way. May I take him back to his point about Zambia and Tanzania, and the Prime Minister’s point about how he would rather spend money in Ukraine? Did it not strike him as rather odd that the Prime Minister—he is, after all, the Prime Minister—needs to abolish the Department for International Development to achieve that? Surely he simply needs to pick up the phone to the Secretary of State for International Development, hold a meeting of the National Security Council and say he has decided that those are to be the priorities.
Indeed, and it did strike me as very odd and very concerning, and it will no doubt have been noted with concern in the capitals of many of those countries that we have enjoyed strong partnerships with for many years.
On that note, can the Minister assure our partners in countries across Africa, and indeed across the developing world, including Ethiopia, Tanzania and Zambia, that we will continue to partner with them and their citizens, to tackle the coronavirus pandemic and continue our long-term work to tackle poverty, disease and inequality, tackle gender injustice and urgently deal with the climate change crisis?
The UK role on the boards of the multilateral financial institutions has often been such that we have been able to influence the direction of those institutions, which have not always had the right focus or agenda, for the better. The former Secretary of State will know that well; I know he took a keen interest in these matters, and I am sure the Minister does, too, and I too have seen that at first hand.
I want pay tribute to the officials and successive Ministers across the parties that have seen Britain’s role as one for global good in these institutions, contributing to multilateral action, so that we can achieve a bigger impact than the mere sum of our parts. That very much, for me, was global Britain in action, and not the Britain that I fear we now seem to be heading towards. So can the Minister confirm: who will determine the future role of executive directors at the World Bank and the African Development Bank, and who will they take their orders and policy steer from in future? Will they still have the same mandate to focus efforts on poverty reduction, or do we risk seeing them go the way of, for example, the badly run Newton Fund, overseen by a non-DFID Department, which was recently criticised heavily by the Independent Commission for Aid Impact and the Sub-Committee on the Work of the Independent Commission for Aid Impact—and indeed the Chair of that Sub-Committee, Theo Clarke, who is not in the Chamber at the moment, but I know takes a keen interest in these matters?
Turning to the two specific institutions and the replenishments, the record of global Britain in action is reflected in a history of partnership with the African Development Bank, and we have contributed over many years to programmes and initiatives such as the African water facility, the Congo Basin forest fund, the sustainable energy fund for Africa and, indeed, the actions on covid that I have just described in Ethiopia. The Minister spoke about the “high five” focus points of the African Development Bank—power Africa, integrate Africa, feed Africa, industrialise Africa and improve the quality of life in Africa, and I hope that he, in his remarks, can confirm that that will continue to be a UK priority for our role in those funds.
On development for women and girls, we were very happy to see that 80% of the new African Development Bank operations were categorised as having gender-informed design; of course, developments cannot succeed without economic development, health and education for women and girls. So will the Minister and his Department continue to negotiate with the African Development Bank and ADF to ensure that funds go to women-led and women-and-girl-directed programmes? I also understand that the pledge rightly includes an element of performance-based funding dependent on positive results reported at the mid-term review, so will he clarify how much was disbursed or held back at the same point in the last replenishment round? It is important that we hold these institutions fully to account.
On the IDA part of the World Bank—a crucial institution, in which we have played a key role in over many decades—for every £1 of grant finance that the United Kingdom and other donors put in, IDA is expected to deliver more than £3 in development commitments for its clients, and we remain one of the largest donors—in fact, the largest donor in 2019. with an appropriate share of the budget. Could the Minister outline how we will seek to ensure that IDA programmes focus on issues like climate change, public health and education, and women and girls. Given some of the discussions that the Minister and I have had about fragile states, what focus will the new funding round have on investment in those? What performance-related measures will be taken in relation to the replenishment?
I want to ask a specific question about the World Bank’s private sector arm, the International Finance Corporation, because that has delivered a proportionate share of its profits as grants to IDA in the past, but in the past few years we have seen the pattern reverse, with IDA now effectively helping to fund IFC shortfalls. I understand that in 2020 it will be a net recipient of $2 billion-worth of IDA-financing-supported investments. How does he expect IFC returns to be further affected by the global economic crisis relating to the pandemic, and does he expect them therefore to be a greater draw on IDA resources even than was perhaps expected for the year ahead?
I have already mentioned one example of a programme that helps Ethiopia prepare for and mitigate the impacts of covid 19. Over the past few weeks, my Labour colleagues and I have met and been listening to senior experts and African voices from the Africa Centres for Disease Control and Prevention, the World Health Organisation and other national agencies and Governments and, indeed, workers on the frontline in countries from Sierra Leone to Zimbabwe. Some of the stories that they have shared with me have obviously been of great concern, and I have discussed those with the Minister. The effects of covid-19 are already having a significant impact on the continent. That impact is on health—whether directly or indirectly—but also on the economic prospects and stability of many countries and regions, although it appears to be diverse and heterogeneous across the continent. That is also the case when we look at who is affected within countries because, like in this country, covid-19 is often a disease of poverty and disadvantage. The worst affected are likely to be: the low paid; the marginalised; women and girls; those in conditions exposing them to greater risk, such as care workers, workers in health services, people who provide security, food processing and transport, and those who work in places with low ambient temperatures and poor ventilation such as ships, and prisons; and, of course, people who live in the slums and dense settlements that we see in many locations across the global south.
I have been impressed and inspired by the clear and growing African solidarity and leadership on tackling the virus, as in so many other things. We could learn much from that, but it is also clear that there are going to be substantial short, medium and long-term challenges. Global solidarity and support—for example, through this funding and replenishment—is not only a moral duty, but in our common global interests. Would the Minister say a little bit about what he understands about how both IDA and the African Development Bank will seek to focus their programming to deal not only with the immediate short-term needs—obviously there have been substantial changes, which he mentioned, particularly in relation to IDA—but with long-term needs? Has he had discussions with them about how they might facilitate investments that support the roll-out of any vaccine treatments and critical medical supplies on an equitable basis?
Reform is crucial with these institutions, so it is crucial that we continue to seek these reforms. The multilateral aid review rated the African Development Bank and IDA as good—very good, in some cases—but there are areas where they were ranked as weak. Will the Minister say a little bit about how he is going to use our position on the boards of both those institutions to continue to push a reform agenda?
On debt relief, it is almost 15 years ago to the week that I helped to co-ordinate the historic march of a quarter of million people around the streets of Edinburgh in a white band as part of the Make Poverty History movement, which called for life-changing aid, debt cancellation and justice. I know that Mr Mitchell was a strong supporter of that campaign, which happened in the run-up to the historic Gleneagles G8 summit. It was a true example of what global leadership can achieve both for our country and for our fellow human beings.
The multilateral debt relief initiative was one of the proudest achievements of the last Labour Government, and has enabled us to make substantial progress towards the global goals—both the millennium development goals and their successor, the sustainable development goals. Will the Minister tell us how much debt UK support has enabled IDA and the African Development Bank to cancel over the recent accounting period, and what expectations he has in relation to these orders, given the changed global economic output?
We will not oppose these orders today, but I reiterate that the speech that I had hoped to make, which would have been full of positivity and support for the measures, has unfortunately been tempered by the announcement by the Prime Minister earlier this week and the many unanswered questions, particularly in relation to our influence and role in institutions such as the African Development Bank, IDA and the World Bank. I fear that the past global leadership that we have shown—for example, on debt relief—may now be in jeopardy.
Order. Just before we move on, let me say that it is quite important that we focus our remarks on the SIs in front of us, which are quite narrow, and perhaps not relive too many other debates that may have taken place earlier today.
On that point, as we are not allowed to have points of order at this time, may I just say that there has been a statement and an urgent question in the last week on the dismantling of DFID, neither of which, for slightly different reasons, I was able to contribute to under the current rules of the House? Let me say through you, Madam Deputy Speaker, that I would hope Mr Speaker might keep those rules under strict review and perhaps introduce some discretion if they are to persist in their current form for very much longer. Having said that, I thank you, Madam Deputy Speaker, for allowing me to contribute to this debate.
I draw the attention of the House to my interests, which are laid out in the Register of Members’ Financial Interests, including that I am a strategic adviser to the African Development Bank—something that I do for the sum of £1 a year in order that there should be a contract. The House will no doubt have differing views on whether the bank gets value for money for that sum.
In recent years, the bank has been massively reformed, first by Donald Kaberuka, the highly respected former Finance Minister from Rwanda and, I think, the first elected president of the bank. Those reforms have been continued by his successor, Dr Akin Adesina, whom I advise and who I think will shortly be elected for a second term. During that time, the bank has made huge progress, as set out by both Front-Bench speakers. I wish to add a little colour to the comments that have been made and to explain why this is such good expenditure and why the UK is absolutely right to focus on building up the African Development Bank and helping it to be ever more effective.
The Minister mentioned the basic programme of the bank, which is encapsulated in the High 5s, which are: first, lighting up Africa; secondly, feeding Africa; thirdly, industrialising Africa; fourthly, integrating Africa, on which the Department for International Development has been extremely good at advising across the continent, where time spent at borders massively disrupts trade—Britain has been good at addressing that; and fifthly, improving the quality of life of African people.
The results over the past five years of President Adesina’s time in office have been spectacular. If we take them all together, we see that 18 million more people have access to electricity; 141 million more people have access to better farming techniques, food security and advice; 13 million people have access to finance from private sector investment programmes; 101 million people have had access to better transport, partly for the reasons I described; and 60 million people have access to water and sanitation—in our world today, nearly 2 billion people do not have access to clean water, and that has dire effects. The direct impact of the bank on the lives of a third of a billion Africans over that period is clear: there has been a higher rate of progress than at any time since the bank was established in 1964. The bank has retained its triple A status from all five global rating agencies, thus maintaining financial probity as well.
The Minister’s announcements today will ensure that the UK is able to help with the expanding capital base of the bank to accelerate all its objectives. That is the reason for the 125% increase in its capital. Once the money has landed in the African Development Bank, we will see those five key endeavours continue to be built on: 105 million more people will get access to electricity; 204 million people will be able to benefit from better farming technology; 23 million people will benefit from investments in private sector companies; 252 million people will gain access to improved transport and integration; and 128 million will gain access to improved water and sanitation. Those are very important changes to the quality of life of some of the poorest people in the world. The bank directly helps to support low-income countries.
In addition to that, the bank has shown a strong leadership response to the coronavirus crisis, managing to get together $10 billion to help African countries with support. It has raised $3 billion to fight covid-19, through a social bond on the global capital markets. It is the largest ever US dollar-denominated social bond listed on the London stock exchange, underlining how development links in some of the great British institutions that are not immediately seen as part of international development, and it is now over-subscribed, with orders of $4.6 billion. The Fight Covid-19 bond and the other funds that the bank has managed to bring together will be a huge boost to help private companies—particularly, pharmaceutical companies, which the bank intends to do everything it can to assist, for very obvious reasons—to survive after the crisis is over.
I wish to mention two or three other matters. In the last year, the bank has set up the Desert to Power Initiative, which will ensure that there are 10,000 MW of solar power across 11 countries in the Sahel, that belt of middle Africa. That will result in electricity for 250 million of the poorest people in the world, of whom 90 million are off grid. It is a $20 billion investment and will be the world’s largest solar zone.
There has been very strong input from the United Kingdom, with expertise from specialists at DFID made available to help the bank, and a very good relationship exists between DFID and the bank in making all of that happen.
The work on affirmative action for women in Africa is extremely important, and $3 billion is now available for financing women’s businesses, which is the largest ever such initiative. Publish What You Fund lists the African Development Bank as one of the four most transparent institutions of 45 global institutions.
The AFDB has had very strong support from the United Kingdom, as I have tried to set out. DFID has sent some of its cleverest and most effective officials to work in Abidjan to help build up the bank. We want the African Development Bank, rather than the World Bank, to be seen as the Africa bank that brings everything together. Under the leadership of both Donald Kaberuka and Akin Adesina, we are seeing that before our eyes.
I hope the Minister will consider any way in which we might increase our shareholding in the bank, because our influence is much greater than our very small shareholding. It would be helpful to have a continuous presence at the bank in Abidjan, rather than a rotating executive director role. That is not an easy ask, because of the way the bank is set up, but I think the bank would benefit from having the expertise of a British executive director all the time.
Finally, I hope that, just as we have with the World Bank, we will be able to see a much greater use within the African Development Bank of the trust fund structure. That would enable Britain to put money into a particular project or meet a particular ask where we want the bank to have a catalytic effect. The trust fund mechanism is now in common use elsewhere, and greater use of it would greatly benefit the African Development Bank and Britain’s desire to drive forward such objectives.
Thank you very much, Madam Deputy Speaker, for giving me the opportunity to address these points, to support what those on the Front Benches have said and, most importantly of all, to support this replenishment. It will do nothing but good for the overall aims that Britain so clearly has in wanting to do something about the appalling discrepancies of opportunity and wealth that disfigure our world today.
I echo the comments of Mr Mitchell about how we often see, through the budget of the Department for International Development, examples of the UK at its best—trying to address the discrepancies, as he put it, in poverty and wealth between nations and peoples across the globe. If we were to use the language of global Britain, that might be one of the best examples to turn to.
The orders are welcome in their attempts to address global poverty. Much mention has been made of Africa, and at first glance it looks as though it will be business as usual for our international aid budget. However, if you will permit me, Madam Deputy Speaker, I would like to explain briefly why I do not think that that is the case, welcome though today’s announcements are.
Once we discount most—not all, but most—Tory MPs, there is no disguising the fact that the momentous decision and announcement this week has caused great alarm. It will have far-reaching consequences for the poorest people in the world—the poorest people on earth. The overwhelming consensus of opinion would bear that out, certainly among experts who work in the field of international development.
I cannot help but notice that, despite her name being on the Order Paper for the very welcome measures that have been put forward, the outgoing Secretary of State for International Development is not here today. I wonder whether her conspicuous absence should be seen in the light in which it appears. Perhaps she also has concerns about the recent announcement that has been made.
The announcement could not stand in greater contrast with the lesser course that many of us in the House fear is now being steered towards international aid. We have rightly heard today much praise for the work of the Department for International Development, and one wonders why a Department that has garnered so much praise and attracted so much admiration should suddenly find itself downgraded. The move has been described by those working in the field as an “act of political vandalism”. I will leave others to judge for themselves, but in my constituency, questions are being asked about whether this decision is ideological.
Order. Before the hon. Lady responds, I want to remind her and other Members in the Chamber that we are addressing the orders, rather than getting into a whole other debate. That is what we are here to scrutinise.
Thank you, Madam Deputy Speaker. I will endeavour to make my remarks as brief as possible. I would say in response to the right hon. Gentleman’s question that the Scottish Government have a Minister in charge of overseas development. The right hon. Gentleman might want to reflect on that, because that is the importance we in Scotland place on overseas development.
The House welcomes these measures, but the fear is for the future. The fear is that putting the word “super” in front of the Foreign Office is not going to cut it, and it will not address the concerns. As set out in the measures, we have historical responsibilities to the poorest nations around the world, as well as moral responsibilities, as we seek to take our place on the international stage.
It is worrying—this is no secret—that aid is now to be used to pursue security and diplomatic aims. There might be an argument to make for that, but that is not what aid is for. Aid must be driven by need. I fear that in the future, we may have fewer of these measures that are so welcome, through which we seek to put a hand out and help up those countries that need and deserve the help of the international community. It must be based on need.
We hear much from Government Members about global Britain—well, whatever floats your boat. If they want to float that particular boat, they may want to take their place on the international stage and lead in the area of international development, instead of downgrading it and using it as a way of pursuing their own diplomatic aims. We in the SNP will not oppose these measures—we welcome them—but we have profound fears about the future and how aid will be administered from hereon in.
I find that my right hon. Friend Mr Mitchell has eaten my sandwiches, so I shall be more brief than I intended. I am greatly reassured that my hon. Friend the Minister is in charge of this brief. He will recall that we worked on it together when he was Minister for Africa and I was responsible for the economic development portfolio in DFID. In those halcyon days when travel was permitted, we would cross paths at airports in Africa. As a fellow former regime loyalist, I congratulate him on his survival skills and, indeed, his resurrection. He will recall that I was not so fortunate, but then, to coin a phrase, one might say that I had it coming.
This is the most important agenda. This brief, concentrating on economic development, and particularly infrastructure that promotes the ability of African countries to trade with one another and so generate livelihoods, has to be our focus when the world is in desperate need of jobs to address the growing generation of unemployed and underemployed peoples in sub-Saharan Africa. We know that if we do not provide those livelihoods for them, they will be seeking livelihoods elsewhere, driving this wave of migration. It is the most important brief.
If I may caution the Minister, he may not recall it but I chaired a committee that met monthly. He will know that DFID has an international reputation for transparency. Everything it spends is arrayed for view and scrutiny on its website. However, I chaired a committee that met monthly where we discussed things and there would be requests for them not to be published. Overwhelmingly, those requests came from ambassadors in Africa who did not want relatively small amounts of money, which had been rather embarrassingly misspent, to be revealed. That was the cashpoint in the sky. As I say, they were relatively small amounts of money, but nevertheless that is where the danger lies.
We all understand realpolitik. There will be times when we want to oil the wheels of diplomacy by perhaps pushing money towards some pet project—although I will never understand how or why we sponsored a one-armed juggler in the Lebanon. Nevertheless, that is the agenda the Minister must be so careful about, because it undermines, so entirely unfortunately and unjustifiably, the whole international development pitch. We are doing a great job. It is something about which we should be proud. We should not let it be undermined by those niggles.
You will be delighted to know, Madam Deputy Speaker, that I do not plan to talk about Government organisations.
I want to speak briefly on one of the key areas in which the African Development Bank operates. We have heard a lot from the Minister, from the Labour spokesman, Stephen Doughty, and from my right hon. Friend Mr Mitchell, a previous Secretary of State, about the important work being done to alleviate poverty, improve infrastructure and bring in water supplies. I want to talk about another aspect of the Bank’s work, particularly right now as we head towards a delayed COP summit and the conference on biodiversity next year: the need to stop and then start to reverse the process of deforestation in Africa. The African Development Bank is doing a lot of important work in this area. DFID is also doing a lot of important work, both with the Bank and elsewhere, but we must step up this activity for two reasons.
First, such activity can play a vital role in climate change. We know the impact that deforestation around the world has had on climate change. We tend to talk a lot about the Brazilian rainforest, but there has been a much greater degree of deforestation on the African continent. There is the potential over the next 10 years for that to continue and to get much worse. For example, in the Congo basin there has already been a significant loss of forest cover. It is a politically unstable area and it has not been commercially exploited in the way that some other parts of Africa have been. We cannot afford to see those huge rainforests disappear. We must also start to recreate some of the forestation that has been lost.
The second crucial reason is the protection of endangered species. With the disappearance of forest cover, more and more habitats have disappeared, and more and more species have found themselves in critical danger. We must therefore do more through our development budgets to halt and reverse the process of deforestation. If that is done wisely, it can provide commercial, professional and tourist opportunities that can help to boost those economies.
Our Government are already doing good work. The African Development Bank is also doing good work, for example in Niger. In other parts of Africa, we have seen where it is possible to make a real difference. Ethiopia, a country that has suffered extraordinarily from land degradation over the years, has done an amazing job in starting to replant areas of forest. We also know that planting can generate genuine commercial opportunities. Let us take, for example, the Zambesi teak tree. The general view is that if a 100-year-old tree is lost, it cannot be replanted and brought back, but I have been to a recreated rainforest in Borneo, which 20 years ago was a palm oil plantation. Today, it is a thriving area of rainforest. It can be done. Plants such as the Zambesi teak tree can grow to full height in 20 years. If stewarded carefully, they can provide a resource for economic activity, as well as the opportunity to recreate habitats which have been lost.
So this is an enormously important area. I very much hope that the funding that we are going to approve today—the support that goes into the African Development Fund and through it into the international forest projects—can make a real difference.
I urge the Minister to put absolutely at the heart of what this Government do in the coming years the support that is so desperately needed for the recreation of what were once fertile, forested areas and are now areas of arid landscape. We should do everything we can to put money into supporting the existing forestation in those parts of Africa where we cannot afford to lose it and where we, in doing so, play a central part in what is going to be necessary in the fight against climate change.
This is not just about electric cars, solar energy, welcome though it is, as my right hon. Friend the Member for Sutton Coldfield said, and the exploitation that we are seeing of the enormous potential for solar power in Africa; it is also about recreating habitats and replanting forests, protecting and recreating mangrove swamps, and helping African farmers to maximise the potential of what they have, while protecting the environment at the same time.
I feel passionately about recreating habitats and removing the threat caused to so many species by the disappearance of the areas in which they live. We are already doing good things, but my message to the Minister today is: please, as we plan the strategy of our international aid in the future, can we make sure that the recreation of habitats and the protection of forests are absolutely at the heart of what we do in supporting the African Development Bank, and projects in Africa and around the world?
I welcome the opportunity to debate these statutory instruments regarding the ADB and IDA. This is clearly a timely moment to discuss how the UK gives its aid, how much it gives and in what form. We should note that this week’s announcement has been described as a big, big blow for Africa by one African Minister. The funds the Government intend to release to the ADB will, via the African Development Fund, help the poorest countries in Africa. The general capital increase will improve the bank’s lending capacity, allowing it to have an even greater impact. We should laud the fact that the fund’s replenishment is estimated to create more than 1 million jobs. I also wish to pay a particular tribute to the leading work the fund is doing to promote clean energy and green growth, not only improving lives, but doing so in a sustainable way. It is good that further commitments have been secured from the bank towards climate finance over the next five years. Of course, that is totally in line with our commitments to help to achieve the sustainable development goals, too.
The UK’s funding of the IDA will support £82 billion in development financing, which will have an impact on immunisations, clean growth and measures that will support gender equality. We should be particularly proud that the UK is the largest donor to the IDA and ADF replenishments. That is, no doubt, one thing that has resulted from the UK’s statutory commitment to spend 0.7% of gross national income on official development assistance spending. As Members would expect, I will remind them that that commitment was enshrined in law by the Liberal Democrats. Our aid programme is about not just our bilateral partnerships, but our multilateral role. We have our own seat on the World Bank IDA board, which allows us to exert disproportionate influence, because of the reputation of DFID. It is important that we remember that.
It is also important that we continue to make aid available to multilateral institutions and to non-governmental organisations as we seek to combat coronavirus. When this replenishment was agreed late last year, we knew nothing of how the world would be turned upside down. There is no doubt that the latest tranche of funding committed to these funds will be used to assist vulnerable countries as we fight to recover from this pandemic. We should remember that, although we might be past the peak in the UK, case numbers are picking up in many parts of Africa. The public health challenge is so much greater in very vulnerable countries such as the Central African Republic or the Democratic Republic of the Congo, where access even to clean water is limited. Earlier this week, we celebrated the findings that the drug dexamethasone cuts the risk of death by a third for covid patients on ventilators and by a fifth for those on oxygen, but in the most vulnerable places there are miniscule numbers of ventilators, and hospitals with oxygen supplies are few and far between.
In conclusion, we welcome these statutory instruments to provide further funding to the ADF and IDA. We are the largest donor to both institutions. The successor funding that this country has provided has helped reduce poverty in some of the most vulnerable countries in the world. These statutory instruments will allow that progress to continue. But following the Government’s announcement on Tuesday, there is sadly a question mark over whether we will continue to be a global leader. I urge the Government not to turn their back on that commitment, and I hope that this replenishment of the bank will not be the last that the UK leads on.
There is a saying that charity begins at home, and over the past few months we have witnessed extraordinary acts of charity and kindness across the United Kingdom. Confronted by coronavirus, people have volunteered to help neighbours who are shielding, donated to food banks to help the hungry and contributed to appeals raising funds. We have truly seen the best of British. However, charity does not end at home. Our help is needed not just here, but in other countries and on other continents—perhaps nowhere more so than in Africa. That is why I whole- heartedly support these measures and will speak specifically to those affecting the African Development Bank.
The bank is, as we have heard, an important player in African nations’ development, and crucial in the reduction of poverty. Right now, there is a pressing need for the bank to help African countries cope with coronavirus. Many of them do not have the resilience that exists here in the UK. A considerable number have to cope with malaria, and Congo is tackling an outbreak of Ebola. There are fears that covid-19 could lead to a wider food and health crisis, and deep concerns of lasting damage to economies that are already fragile. Although there has undoubtedly been considerable progress in economic development over the past 10 years or so, there is a real risk of that being undone. The African Development Bank is being called on to ensure that that does not happen and to provide immediate help in many parts of the continent.
That underlines the role that the African Development Bank has built in recent years. Its High 5s initiative focuses on providing infrastructure through prioritising the needs that are most pressing across the continent: sanitation and water, energy, transport, finance and agriculture. Those are ultimately all about enabling and equipping the people of Africa to improve their own lives.
The UK’s contribution to the replenishment of the African Development Fund will undoubtedly have a marked beneficial impact on the objectives of inclusive and green growth. The greater focus on climate and gender in designing projects agreed as part of this replenishment are extremely welcome reforms to the bank. I am also pleased to see a commitment to speedier delivery of project funds. Similarly, it is encouraging to see that approximately £100 million is dependent on a positive mid-term review, underlining the need for contributions from the UK to be based on effective performance. I look forward to hearing more from the Minister about how that will be assessed.
On the instrument on further payment to capital stock, it is worth highlighting the beneficial impact that a relatively modest immediate payment for shares brings, as the increased capital stock then enables the bank to leverage its balance sheet on the capital markets to mobilise private sector financing for projects. It is a matter not simply of giving money, but of demonstrating confidence and thus building even greater capability.
The instrument on the multilateral debt relief initiative honours our commitment to cancelling the debt of some of the poorest nations in the world, and I fervently hope that the UK’s financial assistance to the African Development Fund will make a material difference to those countries’ ability to tackle poverty and develop economically now that the burden of unmanageable debt has been relieved.
Although the UK’s shareholding in the African Development Bank is relatively small, I know from conversations with senior members of staff at the bank that we are seen as a very important stakeholder. Our commitment at this time sends a strong message to other shareholders and donor nations. That is surely welcome.
One reason I was keen to speak on the African Development Bank is that, among multilateral development banks, it is in a unique position. It is headquartered and based in Africa and has teams on the ground that really understand African nations and can interact with Governments to help both public finance management and governance. With technical and financial expertise, it is able to mobilise resources and improve capacity so that countries can reduce their dependence on donor funding.
These instruments today are a reminder of the potential for the UK and African nations to forge closer and stronger relations, especially as we leave the transition period following our departure from the EU. Our historical relationship and, in the case of many African countries, shared membership of the Commonwealth also provides opportunities. The president of the African Development Bank himself said on a visit to London in January:
“As wealth grows in Africa, it leads to wealth growth for the UK.”
He pointed out that our strong trading and cultural ties give British investors a head start in Africa, where, as he put it, there are
“huge markets, brimming with enormous investment opportunities.”
It is therefore perhaps something of a pity that foreign direct investment from the UK to Africa has fallen by a third since 2015, but I hope that the Government’s commitment to the African Development Bank, as demonstrated by this new funding, will provide at least a nudge to investors to consider the potential for imaginative and bold action that could bring mutual benefit.
It is important that the British taxpayer has confidence that the money devoted to development is spent wisely and carefully. There have been too many cases in the past of waste, profligacy and worse. Wherever our development funds are sent, there must be thorough auditing of projects and robust analysis of their real-world impact on the people in greatest need.
Does my hon. Friend agree that the prime way of ensuring that there is really good value for money, apart from all the structures that have been put in place, is the Independent Commission for Aid Impact, which was set up by the coalition Government in 2010? It is the taxpayer’s friend. It is independent of Government; it reports not to the Executive or to the Department but to Parliament and, at the moment, to a Sub-Committee of the International Development Committee. Does he agree that it is very important, for precisely the purpose he set out, that ICAI should be retained in full?
I do indeed, and I take the point that my right hon. Friend makes. I was going to mention that I am indeed pleased that the Independent Commission for Aid Impact is currently conducting a review of the effectiveness of DFID’s support for the African Development Bank Group. It is perhaps a pity that it was not able to report before the decisions that will be taken today, but that is understandable given the limitations caused by coronavirus. As a general principle, it surely makes a lot of sense to have the independent scrutiny that my right hon. Friend refers to.
Additional scrutiny of how we spend development money is inevitable. As here in the UK we confront the worst recession we have known, it will be vital to demonstrate how supporting development initiatives is beneficial to us all. I feel confident that Ministers will ensure that that is the case with the moneys we are discussing. The Minister may even wish to provide me with some reassurance on that momentarily.
It is right that, even in difficult economic times at home, we continue to support those elsewhere who are much worse off. These funds for the African Development Bank and those for the International Development Association of the World Bank illustrate how Britain can be a force for good by making solid financial and political commitments that contribute towards economic development and social progress around the globe.
Glancing down at my notes, I think I have about 50 things to come back on. To assist the House, I will keep my comments to five minutes and then look through the report of the debate forensically and come back with some of the more technical detail where individuals have asked me questions, but I will try to cover everything.
I assure the House that we are completely committed to development. We are completely committed in the longer term to funding through these two long-standing mechanisms. This is not just something for today; it is something for the future. We are committed to the African continent specifically and to our Commonwealth partners, including Tanzania and Zambia, which were mentioned. Sadly, because growth in Asia is in excess of growth in Africa, it is probably inevitable that over the next 25 years there will be more poor people and people in extreme poverty in Africa than elsewhere. If anything, that will mean that we have to refocus more, not less, assistance on that area, separate from the broader debate that is being had.
A number of points were made about the ADB and how we leverage our shareholding. We leverage our shareholding in many ways, but at a very high level we have helped leverage 40% of investment into climate. There were concerns about money being focused on the poorest; 90% is focused on fragile states, partly because of how we have leveraged our shareholding.
I listened carefully to my right hon. Friend Mr Mitchell. I do not quite know why he ate the sandwich of my right hon. Friend Sir Desmond Swayne, but that is perhaps due to a lack of familiarity with the terminology. My right hon. Friend the Member for Sutton Coldfield is incredibly well-informed.
As I go round Africa more generally, his name often comes up not only in obvious places such as Abidjan and Kigali, but across the continent. He is hugely respected. I look forward to working with him. I have already had an initial chat with the previous president, Donald, and look forward to working with the current president and other individuals.
On the important point about the constituency of which we are a member alongside Italy and the Netherlands, we are proud that we have someone from DFID representing that constituency at the moment. I am interested to see how we can build on that and I particularly welcome my right hon. Friend’s highlighting of solar energy across the Sahel, which is a really important issue and a really important region. It is the only region that was explicitly mentioned as part of the five shifts in NSC strategy.
There were various contributions from Scotland. I am a little confused because I thought that the Conservative party was moving towards the SNP position of having a single Department, which I agreed with rather than the position that was suggested today. I understand the points that were made. On a more consensual point, let me say that, as well as being the Minister for Africa, I am the Minister for Abercrombie House, and I look forward to visiting it, talking to employees and assuring them of their job security during this transition. I know that it is a concern for individuals, particularly for those who are away from Whitehall.
My right hon. Friend Sir Desmond Swayne raised a number of issues, including the inter-relationship between trade and migration, which is important. I remember fondly our meetings at airports around the world. Sometimes I knew that he was going to be there, and sometimes it was a surprise that he was there, thus demonstrating that we need to be a little more co-ordinated across Whitehall.
My right hon. Friend Chris Grayling went into a little more detail, eloquently, on forestation. I was particularly interested to hear about the work in the Congo Basin and would like to speak to him more about that. On the reforestation of palm oil areas, we are very aware of the problems of palm oil more generally.
My hon. Friend Rob Butler talked about effective performance, which was also raised by the Opposition. Let me report back on some of those figures: we held back 25% of £152 million sterling—£38 million sterling—in June 2018, £30 million of which was released in October, based on progress and a performance plan. In 2019, we did not withhold any further—
Given that these orders are made under the International Development Act 2002, does the Government have any plans to change or amend that Act given the importance of all these orders being focused on poverty eradication?
That is a legitimate point, but I am not sure how it relates directly to the SI. I am not aware of any changes, which might perhaps give the hon. Gentleman some reassurance. There is some additional information about the other fund, which I will write to him about.
I thank my hon. Friend the Member for Aylesbury for his points on foreign direct investment in Africa, which is incredibly important, whether it is through some of these funds or completely independent of Government institutions.
My right hon. Friend the Member for Sutton Coldfield raised the issue of trust funds. We have very few trust funds at the African Development Bank, but we are supporting initiatives on sustainable energy, climate risk finance and women’s economic empowerment and very much welcome a discussion around how we can use trust funds more effectively through that fund. Having lived in Abidjan as a 20 year-old, I am keen to get back there and talk to him more—[Interruption.] He is looking shocked. I am not sure whether that is because I was once young, or that I was once in Abidjan. Perhaps it is both. I was aware of the African Development Bank back in my time at Barclays in Abidjan and I look forward to getting back as alternate governor. I was asked who would be representing the bank. I suspect, given the changes, that as deputy governor or alternate governor, I will be spending a bit more time with all the regional development banks. Even prior to the changes, I was going to be the primary person dealing with the African Development Bank.
I welcome the consensual nature of this debate, particularly given the context. I can reassure the House that, in my heart and the heart of Government, we are trying to do the right thing by development. This merger is very much about trying to bring the full force of HMG together, not shifting from one foot to an entirely different foot.
Question put and agreed to.
That the draft African Development Bank (Fifteenth Replenishment of the African Development Fund) Order 2020, which was laid before this House on
That the draft African Development Bank (Further Payments to Capital Stock) Order 2020, which was laid before this House on
That the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on
That the draft International Development Association (Nineteenth Replenishment) Order 2020, which was laid before this House on
That the draft International Development Association (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on
On a point of order, Madam Deputy Speaker. At the end of this month, production of the British passport will cease at the De La Rue plant in my constituency, following the Government’s decision some years ago to award the contract to Gemalto. Yesterday, De La Rue announced that the production of bank notes on the site will also stop, with the loss of a further 255 jobs. It is devastating to see this reduction. Are you aware of any statement to be made to the House by a Minister about that issue in the forthcoming business?
I thank the hon. Lady for that point of order. I think she may have been here for the business statement. I have not been made aware of any forthcoming statements from Ministers about it, but she has put her concern on the record, and I am sure she will find ways, as she has done today, to raise that concern about her constituents.
To allow the safe exit of Members participating in this item of business and the safe arrival of those participating in the next, I will suspend the House for three minutes.