Chapter 5

The role of government in increasing
trade and investment with Africa

5.1        This chapter highlights suggestions made regarding the role of government in identifying opportunities and assisting Australian companies to access existing and new markets. It also includes the areas of assisting companies in–country, raising awareness and Africa literacy.

Role of Government

5.2        Evidence to the inquiry recognised the role of government in increasing trade and investment with Africa. In its submission, the Department of Foreign Affairs and Trade (DFAT) explained the role of the Australian Government:

The Australian Government has a role to play in identifying and promoting business opportunities; improving market access and advocating for a predictable market-oriented operating environment. Existing economic diplomacy efforts, on and off-continent, are important in raising the profile of Australian companies in Africa. Diplomatic missions already do a great deal to identify and promote business opportunities in their respective countries, and to assist Australian businesses operating in Africa.[1]

5.3        The Australian Water Partnership noted:

DFAT posts provide a most important role in establishing contacts in-country and in facilitating the formation of relationships between the relevant country authority/partner and the Australian partner/company.[2]

Australian government presence in Africa

5.4        As noted in chapter 3, DFAT advised that:

Australia currently has diplomatic missions in nine of the 54 countries of Africa and Austrade has offices in five countries. We also have honorary consuls in an additional 13 countries. Australia recently opened an Embassy in Rabat, Morocco (July 2017). This addition to our diplomatic footprint will enhance Australia’s influence in Morocco, and more broadly throughout North Africa and Francophone Africa.[3]

5.5        Figure 5 illustrates the Australian Government presence in Africa.

Figure 5: Australian Government presence in Africa

Source: DFAT, Submission 30, p. 5.

Value of Australian missions

5.6        The committee received evidence highlighting the value of Australian missions in Africa, with particular reference to the role mission staff play in facilitation, introductions and building relationships. Professor Andrew Campbell, Chief Executive Officer of the Australian Centre for International Agricultural Research (ACIAR), advised:

We work very closely with the missions, particularly in East Africa. We don't operate in the Middle East or North Africa anymore and we don't operate in West Africa, but in missions in Nairobi, in Zimbabwe and in Ethiopia in particular we work closely with the heads of mission. When I or senior staff are visiting projects, we will always do so through the missions. Our ACIAR East Africa office works out of the mission in Nairobi, and we often host particular events, receptions or whatever at the Australian mission wherever possible. We also try to make sure that our activities line up with the other DFAT funded work such as the Australia Awards programs which are run by those missions. So, yes, we certainly see the Australian missions as being critical partners for our work in East Africa and we work through them as much as possible.[4]

5.7        Professor Campbell provided further detail on the logistical support provided:

Some of that [logistical support] is provided by our own staff that are permanently based in East Africa. When Australian researchers are participating in ACIAR projects, our regional office will assist them with visas, fares, accommodation, local transport and so on, but quite often we use the convening power of the heads of mission to help us to invite VIPs to meetings and to host those meetings at the embassy or the high commission. We usually start off with an introductory discussion to make sure that we're aware of any sensitivities and vice versa so that the various parts of the Australian government are working together as closely as possible.[5]

5.8        When asked whether ACIAR's role is more problematic in countries where Australia does not have a mission, Professor Campbell advised:

To a degree. However, because ACIAR has been operating in East Africa for more than 30 years, we do enjoy good standing with governments in that part of the world. Usually we would be drawing on close contact between the Australian scientists and their counterparts in those countries over many years. Yes, it's slightly more difficult to operate where we don't have an Australian mission, but we do that in a number of places around the world and we're used to doing it.[6]

5.9        Mr Tim Carstens, Managing Director, Base Resources, spoke about the assistance they received from the High Commission in Kenya:

At an establishment level, we've had a lot of support from the Department of Foreign Affairs and Trade through the Australian High Commission in Kenya, particularly in the early days, in 2010, when we were getting the project up and moving, right through to commissioning in 2014. They provided a high degree of support for us. We were able to get our issues on the agenda, through DFAT, in second channels. We've got our own very good contacts with the Kenyan government, and always have, but having that Australian government perspective, and basically making sure that the government of Kenya understood that the Australian government was watching, was extremely valuable. And just that support of having government standing behind you is significant.[7]

5.10      Mr Rob Fisher, Chief Financial and Operating Officer, Windlab, spoke about the support his company received:

We've dealt with the High Commission in South Africa. We've met Australian Austrade and embassy officials in Kenya, which I understand is where the East African mission is based. We've had good support, a particularly from Austrade in Kenya, in terms of getting to meet the right people in the Kenyan government. We now have a joint venture with one of the county governments in Kenya that has been well supported by Austrade and the staff in the country over there. Australia has a fairly limited presence, I think, in places like Tanzania and Mozambique. That's perhaps understandable. Kenya, I think, covers those areas. But we've been reasonably pleased with the assistance we've had out of Austrade and the embassies.[8]

5.11      Dr Nathan Steggel, Technical Director, Windlab, added that the missions have provided support for things like getting visas quickly for staff that need to come to Australia for business meetings.[9] Mr Fisher emphasised that this is important to them because:

...we do something that's fairly unusual, we find people don't know how do to do what we do. We need to bring our African staff over here to train them, and being able to get them in the country efficiently is certainly something that's important to us.[10]

5.12      Dr Nikola Pijovic submitted that governmental presence and support is necessary to foster private sector engagement and assist companies to access markets in Africa and explained:

Having personal Australian diplomatic representation and support is important as it can help open doors to companies and markets, highlight Australia's support for a given Australian company, and promote 'brand Australia'. Also, even a minimal level of diplomatic support helps those Australian companies build credibility with local interlocutors, but can also help them fight corruption and ensure contracts are honoured.[11]

Increasing the number of Australian missions in Africa

5.13      The potential for additional Australian diplomatic posts in Africa was raised. There were varying perspectives on where the additional missions should be located. Paydirt Media supported additional posts, particularly in Francophone Africa.[12] Dr Pijovic recommended four new diplomatic posts, over the next 15 years, in Senegal, Cote D’Ivoire, Algeria, and Mozambique.[13]

5.14      Mr Andrew Repard, Executive Chairman, Paydirt Media observed that missions were 'underbudgeted' with respect to travelling:

There were examples of heads of mission, not in more recent times but in earlier times, where they simply didn't have the budget or the capacity to cover the ground. In some of the West African countries—particularly in Accra, where they represent, I think, over seven or eight different African countries—that makes it pretty hard to be seen that often. So easier access to airline tickets and travel allowances and legs on the ground—obviously one new embassy would make a huge difference in that part of the continent.[14]

5.15      The committee was interested in witnesses' views on whether there is a misalignment between where Australia's economic activity is occurring in Africa and where Australia's diplomatic efforts are focused. Paydirt Media observed:

I think it's fair to say that regions come and go and commodities come and go. For example, Angola is making all the signs of really opening up for business: a change of government, a change in attitude. It will be a very different place. One of those main priorities is to open it up for mining. It's a strong oil destination. But, if that happens, there's a huge potential for Australian companies. Currently I think there are only three companies operating in Angola. As majority rule applies at the moment, the government own a minimum of 51 per cent, but they've said as late as last week that they're going to change that around, and that will shift the need for Angola to be better represented or have stronger representation...

In the case of the DRC, the Congo, there was a lot of activity going back 10 or 15 years ago, and most of the consulate stuff was handled by the Canadians, because there was no ambassador anywhere near. I think the person who looked after DRC was based in Harari, with obviously considerable priorities to deal with them on a day-by-day basis in Harari.[15]

5.16      Mr Dominic Piper, Editor, Paydirt Media observed the challenges of deciding on the location of Australian embassies in Africa:

...I certainly do not think that there is a need for an Australia House in Nairobi, Accra, Ouagadougou and Abuja. Although Australian investment is quite substantial within the country, it's not like there are 20,000 Australians in Burkina Faso this month. It's not that a mission is going to have a regular occurrence of people coming in looking for advice on travel and visas and reporting stolen or lost passports. So I think that you're right that, if it's a more modest office that can ensure that there is a diplomatic presence in more locations, that can only benefit those Australian companies or enterprises that are active in different countries. We don't need the grandeur that we might need with more traditional trading partners or countries with diplomatic ties.[16]

5.17      Noting the opening of a post in Morocco, DFAT officials provided evidence explaining that decisions to expand Australia's diplomatic footprint are 'really based on Australia's interest'.[17]

It would be difficult for me to say that there is a clear set of criteria that we tick through. But, as you're aware, we have recently opened another post in Africa, in Rabat, Morocco. These things come about because—though, obviously, factors change all the time—Australia sees a clear interest that warrants such a presence. In the case of Rabat, it was clear that Morocco, out of all the African countries, was much more advanced in terms of its economic development and growth, which meant that obviously it was going to increase opportunities for Australia as well, in terms of trade and investment. So there was a lot of sense in actually having a presence in Rabat which could work as a window to Europe as well as to Africa. There are also other security reasons as to why having a presence there is really important so that we can work closely with the African continent in ensuring that we keep Australians safe.[18]

5.18      However, DFAT explained that they are 'looking at new models of operation going into the future for our overseas network to enable us to expand our diplomatic footprint'.[19] Ms Gita Kamath, Assistant Secretary, Africa Branch, DFAT, provided the following example of opening a pop-up post in Estonia to establish an Australian presence:

One example was this year the foreign minister announced the opening of a pop-up post in Tallinn in Estonia, which is an innovative model, where you have an accredited ambassador with a post open for two months of the year and a virtual presence after that. So there are lower administration costs and less need for physical infrastructure and you don't have a traditional chancery like, you mentioned, in Kenya. It's important to have the agreement of the host government; that is a critical factor. You allow the ambassador, outside of that period when the post is open, to visit from time to time as you would when you have an ambassador who has non-resident accreditation. Then all the back-office support function can be done outside by a regional hub. That is a good model into the future, where you are looking at more contemporary work practices. You are still able establish a robust Australian presence and you can respond.[20]

Austrade

5.19      Paydirt Media suggested that Austrade take a larger role in Africa:

Austrade's strategy in Africa [should] be readdressed to better place Australian industry. Africa's booming; the population is booming; and Austrade really needs to be a bigger player across the continent.[21]

5.20      Ms Margaret Bowen, Assistant General Manager, Ministerial, Economic and International Engagement Branch, Australian Trade and Investment Commission (Austrade) provided evidence about Austrade's international presence:

From the point of view of Austrade, as with DFAT, we manage our offshore presence as our budget allows. We focus on markets where opportunities for commercial outcomes are highest. If we had more money, we could do more, but we operate within the budget envelope we're provided and make decisions to prioritise based on what the government tells us our priorities should be but also what companies convey to us our priorities should be in terms of sector and region.[22]

5.21      Further to this, Ms Bowen provided an example of when a position/resources have been relocated to reflect changes on business opportunities:

We have recently established a business development manager in Morocco. We did that because our post in Libya closed due to the civil war there. That allowed us to assess our priorities and place a business development manager in Morocco. Morocco's a prospective market. It's close to Europe. It has a relatively upwardly mobile, affluent population. We made the decision that there were opportunities there that warranted the placement of a business development manager in Morocco.[23]

5.22      Austrade indicated that it manages a range of missions and events to promote commercial ties with the countries of Africa which are designed around key commercial opportunities that Austrade has identified as matching Australian capabilities. Recent examples of business and education programs delivered or supported by Austrade include:

Joint West Africa mining mission with Austmine (Ghana – October [20]17)

Business mission to Ethiopia with the Ethiopian Government (Ethiopia – November 2017)

Seamless Financial Services and Fintech program (Kenya – September 2017)

Australian mining delegation to Mining Indaba (South Africa – February 2018)

Australia Mauritius Research and Innovation Forum (Mauritius – February 2018)

Australia Unlimited – Agribusiness, Food, and Mining showcase (Morocco – February 2018)

West Africa Education Mission (Nigeria, Ghana – April 2018)

'Gourmet Australia in Africa' (Mauritius, South Africa, Kenya, Tanzania – April 2018)

Upcoming events include:

Australian Fintech mission (Kenya – September 2018)

Gourmet Australia in Africa (Kenya, Tanzania, Ethiopia – November 2018)

Australian mining delegation to Mining Indaba (South Africa – February 2019).[24]

5.23      In May 2017, Mr Matthew Neuhaus advised that DFAT and Austrade are working on a commercial opportunities strategy which looks beyond the extractive industry:

We are working with Austrade and recently worked on a commercial opportunities strategy which we will unveil more publicly at Australia-Africa Week. That is looking beyond mining into broader commercial engagement, which is something that is a priority for us.[25]

Ministerial visits

5.24      Paydirt Media advocated for greater ministerial presence in Africa, and this view was reiterated by a number of witnesses.[26] DFAT acknowledged:

There have been no ministerial-level business delegations to Africa in recent years, although former Minister for Trade, Mr Robb used a visit to Nairobi in December 2015 to engage Australian business leaders in Kenya. Similarly, Minister for Trade and Investment, Mr Ciobo launched the Australia-Morocco Business Council in Marrakesh in October 2017. A business delegation led by a Minister or Assistant Minister to priority countries and with participation from priority sectors, would boost the profile of Australian businesses, and would be well received in Africa. It would also help to promote greater private sector linkages across sectors. A good practice would be for a Minister or Assistant Minister to lead the Australian delegation to African Mining Indaba, the world's largest mining investment conference attended by African Ministers which is held in Cape Town in February each year. The Government is conscious that forward travel programs for Ministers are heavily committed and to the extent possible would look to continue to leverage off Ministerial travel to the region, for other international meetings, such as participation in IORA or WTO meetings as appropriate.[27]

5.25      DFAT also advised that it supports the visits of African ministers and officials to Australia, for example:

...members of South Africa's Parliamentary Committee on Mineral Resources visited Western Australia during July-August 2017, and we are expecting a delegation from South Africa’s health and mining sectors to visit Australia during October to study Australia's approach to mining-related health and compensation issues. DFAT also operates a Special Visits Program (SVP) funding the visit of nominated special visitors to Australia.[28]

Parliamentary visits

5.26      Mr Neuhaus pointed out that the parliament can also assist in building relationships with African countries:

The parliament can make a big difference in building those relationships. In fact, the very fact you have an Australian senator of Kenyan origin now has sent a powerful signal. More importantly, I hosted several delegations to Zimbabwe, Zambia and so forth during my time there as ambassador—Senator Moore was on two of those, in fact—and I thought this made a really big difference. There had been a commitment early on to try and make these delegations annual. I know it's not quite always worked, but that could be very helpful.

It's also good that the parliament is now fully involved in the Commonwealth Parliamentary Association. I was speaking to the Speaker at the Mauritius National Day from the House of Representatives. He'd been to Seychelles and Mauritius recently. That had a big impact and made a difference. Increasing familiarity of parliamentarians and preparedness, both of ministers and non-ministers, to go on visits to Africa to build those personal relationships—and, indeed, parliamentarians from our state parliaments—makes a big difference to building up the relationship. I'd particularly like to thank Senator Reynolds for attending Indaba. That had a big impact at that time.[29]

Advisory Group on Australia-Africa Relations

5.27      In September 2015 the Advisory Group on Australia-Africa Relations (AGAAR) was launched by the Minister for Foreign Affairs, the Hon. Julie Bishop MP, with the 'aim of providing the Commonwealth Government with advice on advancing and diversifying Australia's growing relationship with Africa'.[30]

5.28      AGAAR also released a strategy paper in December 2016 outlining a number of focus areas and recommendations for the development of Australia-Africa relations.[31]

5.29      Dr Casta Tungaraza, Chair, AGAAR, explained that although most of the recommendations from the strategy paper have not been implemented, AGAAR is 'discussing how those recommendations will be implemented, because they're really critical in enhancing these relations between Australia and Africa'.[32]

5.30      Dr Tungaraza outlined AGAAR's achievements to date:

We have completed that [the strategy], and a major initiative of AGAAR that we were also looking at was the establishment of the Australia-Africa week to ensure that we do not only focus on mining but bring in other sectors. We have been able to attract infrastructure. We have been able to attract a women in leadership program—the Australia-Africa Women's Forum—which is one of the priorities for Africa and also a priority and interest for Australia. We are also now in the phase of implementing Australia-Africa trade and cultural export. We started at a very small scale for the past two years; however, now we are going to have major export during the Australia-Africa week on 31 August and 1 September with the support of the heads of missions in Africa. We've had a lot of discussion about that, and the focus will be agriculture, tourism and other areas that have not yet grown in our relationship with Africa. So I think that will be another major milestone and achievement for AGAAR.[33]

5.31      DFAT advised the committee that a large number of AGAAR's recommendations have been either implemented or partially implemented:

[B]ecause a lot of them are part of our core business, whether it's increasing trade and investment, supporting Australia-Africa Week or deepening engagement on multilateral issues. Many of these recommendations align very squarely with the foreign policy white paper and so guide our engagement with Africa as it is. So I think the answer is, in large part, yes. Of the recommendations that haven't been implemented, some would require additional funding.[34]

5.32      Some witnesses, including His Excellency Mr Isaiya Kabira, High Commissioner of Kenya, suggested that the role of AGAAR could be expanded into a more public-facing role, working directly to strengthen the Australia-Africa relationship:

I know of organisations like AGAAR. We want to thank the Australian government for establishing the Advisory Group on Australia-Africa Relations. They need to be more empowered, because right now they are still trying to build capacity to try and see how best they can build these relations. But if they're just going to be a boardroom talk-shop then they're not taking this relationship between Africa and Australia to a very high level. You could use institutions like AGAAR to try and create this communication....[35]

5.33      Ms HK Yu of DFAT acknowledged that, while the function of AGAAR is primarily advisory, the group is open to suggestions for new ways in which it can fulfil this role:

I'd be very interested to hear if the diplomatic corps here had any particular suggestions, because we are very open to ensuring that AGAAR members receive those suggestions. DFAT provides assistance to AGAAR, but, unlike other councils of a similar nature, it does not provide grants. Perhaps that is where they were getting it. This is really an advisory body that's been set up to provide advice on a whole suite of issues that the government may have to deal with, but also for members to use their own networks—personal and professional—to further strengthen Australia-Africa ties. We are starting to see some good results out of that. So it's hard, I think, to just see what AGAAR by itself is producing in terms of what it may be communicating on the website. I think it's important we look at the whole suite of work and different streams of initiatives and projects that members themselves are progressing through this interaction.[36]

Sectoral assistance

5.34      Windlab made the following suggestions of how the Australian Government can assist in the area of renewable energy:

Engagement with prospective countries' governments to ensure alignment with development of projects best practices;

Hosting of study groups to investigate how the Australian market has been able to build a complete renewable energy industry;

Assisting foreign governments in understanding incentives with regards to renewable energy and how foreign governments can attract large foreign investment through the renewable energy;

Assisting foreign governments in understanding the impact that renewable energy can have on their electricity grids;

Ensuring best practice with regards to community engagement and ensuring that the surrounding areas to any renewable energy project are able to benefit from renewable energy.[37]

Travel advice

5.35      DFAT, through their Smartraveller scheme, maintains up-to-date travel advisories on foreign countries. These advisories reflect a range of factors that contribute to the safety and security landscape in those countries.[38] Witnesses told the committee that they rely on DFAT travel advice when making decisions around commercial activities but as discussed in chapter 3, will also look at the advice of other governments and some seek their own advice.[39]

5.36      The committee spoke to heads of mission representing 16 African countries, who expressed concern that they are not consulted in the preparation or revision of travel advisories for their countries. Some heads of mission felt that these advisories did not accurately reflect their countries’ safety and security situation and may have a detrimental effect on the trade relationship between Australia and Africa, particularly in the tourism sector.[40]

5.37      DFAT responded that advice is updated as required and:

I think this is a common issue that quite a lot of countries around the world would raise with Australia. Obviously the country heads of mission have a great incentive to ensure that their country is portrayed as extremely safe for travel. But our approach to determining the travel advice is consistent across the whole, and it is actually done with great input from the posts, from on the ground, to assess, at the end of the day, safety of Australians on the ground.[41]

5.38      Mr Neuhaus added:

...we do actually also cross-reference with like-minded countries, like the US, the UK and Canada. And, while there may be some differences, generally we're all in the same ballpark. Over the last three years, when I've been heading up the Africa branch and then the division, we've had constant communication with ambassadors around these issues, and we have changed advisories as things have become more secure. Tunisia was one such example. Kenya itself is another example, because there were a lot of terrorist incidents some years ago, and there are fewer incidents now. Every so often there can be incidents, and we have to take a cautious approach because it's Australian lives that are potentially at stake...[42]

Increasing Africa literacy

5.39      Dr David Mickler argued there is a need for greater Africa literacy:

I think there is a real lack of knowledge on both sides of each other, and this is a hindrance to deepening engagement right across the board, including in trade and investment...In my view, this should involve building an Africa-literacy program in this country, similar to what has been undertaken with Asia over the last 30 years and which we've seen the fruits of today. This would include everything from education programs to student exchanges to promoting cultural events, high-level delegations and so on, to build a level of knowledge and awareness, at least on the Australian side of the African continent. This is really the starting point, I think, for all of the other types of relations to follow.[43]

5.40      Submissions also suggested that the Australian Government has a role to educate Australian businesses about opportunities that may be available in the countries of Africa. Mr Gordon Chakaodza advised the committee he had observed that the Australian business community 'did not always fully understand the opportunities that were available in Africa'.[44] Mr Chakaodza suggested 'there is room for the Australian Government to facilitate the education process here in Australia', including workshops in states and territories about the opportunities and risks of operating in Africa.[45]

5.41      The 2011 inquiry undertaken by the Joint Committee included a recommendation that a Centre for African Studies be established and funded by the then Department of Education, Employment and Workplace Relations. The recommendation specified that the Department 'provide sufficient funding so that the Centre can undertake research, education and training functions'.[46]

5.42      The government response noted:

DEEWR is unable to fund the establishment of a Centre of Africa Studies at this time. Mechanisms and priorities for supporting increased educational engagement with Africa and with other regions and countries will be considered in the development of the five year national strategy to support the sustainability and quality of the international education sector.[47]

5.43      The establishment of an Africa research centre was again raised in the committee's current inquiry. Dr Mickler explained his vision for such a research centre:

This kind of centre could be a repository or one-stop shop for doing the research, obtaining the data and providing the data to a range of different stakeholders across government, industry and community who would like to build on that. I would see it as having a research role. It would spur projects of mutual research interest across the continent. That could be right across the mining, agriculture, development, public health and governance areas. The funding would then include providing money for collaborative research projects that are jointly developed and jointly executed and then presented publicly, but it would also have an education and training capacity. It would provide university courses that focus on Africa. We offer a couple of those at my university currently, and seeing Australian students having the opportunity to study Africa as a focus has been really interesting. They come from a very low base and at the end of the course are very interested in and excited about the continent, and I see this as a really important role that could be expanded, but there is also a training role. It could be research training. It could be training in vocational areas. It could be a whole range of short-course training both for Australian companies and governments about to work in Africa or for African governments seeking to draw upon Australian expertise.[48]

5.44      Dr Mickler explained that in the absence of a larger research centre with a broad focus, other forums have emerged to facilitate Australia's relationship with Africa including:

5.45      Dr Mickler advised that while these forums are important, they are operating 'in lieu of having something more institutionalised' and they have 'reached the limits of what can be achieved as network based collaborations and are obviously running on very small budgets'.[50] 

5.46      Support for such a centre was reiterated by Professor Helen Ware, who stated that:

As an academic, my support for Recommendation 10 to establish a Centre for African Studies (CAS) may well appear self-interested, but such a Centre could be of significant assistance in promoting Australian understanding of Africa, strengthening trade and investment relationships and assisting small to medium companies understand the African context.[51]

5.47      Dr Kathryn Sturman from the Sustainable Minerals Institute at the University of Queensland also supported a multi-disciplinary Centre for African Studies.[52]

5.48      Dr David Lucas, Academic Visitor, School of Demography, ANU also called for a centre for African studies noting that 'Australia has a substantial body of expertise but this is fragmented and uncoordinated'.[53] He emphasised that even without a centre there is still a need to improve dissemination of information for business and researchers and suggested an alternative could be a virtual centre.[54]

Australia awards

5.49      Australia Awards Scholarships 'can play a constructive role in helping to build public sector and regulatory capacity in countries and sectors of commercial relevance to Australia, such as mining governance'.[55] More detail is included in chapter 6.

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