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Creating new jobs without additional funding

Comment 4th February 2016

The UK government has said during this period of austerity they will not be cutting the aid budget but something new needs to be done about employment and job creation. It should be noted that this idea works without the Aid element if you were looking at creating jobs there are elements in this idea that speak to that. If you reposition the funding and look for private sector contribution it still works . This might be might be politically sensitive / incorrect or dubious idea for the purist. If we look at the aid given by the UK / US/ EU to Africa (and the rest of the world), a percentage of that aid is tied to purchases by the aid recipient to the donor countries. But it’s usually business for the boys and usually badly managed. The question is that can that be changed taking the UK (just because I live there) for example will give approximately £100 million to Nigeria of west Africa ( see DFID ) not a lot you might say but with jobs scarce in the UK, should aid also includes job aid. Secondly have we maximised private sector involvement in Job creation if we can give them some tax breaks for creating some jobs even if the jobs are not directly working for them? This brief looks at the creating of an aid corps valued at possibly £3 million in terms of salary and deployment but can lead to jobs creation and business opportunities worth hundreds of millions. Their initial remit is entrepreneurial programs, Train indigenous worker and create markets for goods and services. The money does not have to be 100% government get the private sector involved the selling point is that they might be able to get a pool of trained staff in the future with local knowledge and management experience which they might not get in the in the UK on return. Do not forget the Africans in Diaspora who might want to go back and contribute for some time (like 6 months they may have local knowledge and skills plus they are not beholden to the aid recipient. Examples of this are experts from the World Bank who have been seconded to countries like Nigeria even if for a short time can have an impact (See Article ) especially as they are paid by the aid donor. I personally know that with jobs scarce British people are highly travelled and willing to work abroad The point is that there should be a paid aid corps (an example in the building and construction trade is suffering while aid funded construction projects could use the help of aid funded construction experts to not only execute but to train the local work force). This goes beyond selling equipment (I have horrendous stories of donated equipment which is never used) this forces the equipment to be setup and used. The alternative is to set up and African Venture capital fund and not based of the British Model ( my MBA dissertation written 12 years ago showed that British VC’s do not really invest in start ups and early stage companies and the angel investor are quite weak 12 years later things have not changed much) this should be more in line with the VC in America that have a more rounded port folio ( there are Chinese Indian and African returnees who have created their own funds in India china Nigeria Ghana but its not enough) . This should not be limited to goods and services. Africans send their kids to be educated abroad spending £240 -500 million (12000 students a year) for a population of 150million that’s a pittance compared to the potential of British secondary and universities extending their brands abroad. The question is that will it damage the education trade? The answer is no, when education was really good in Nigeria people still sent their children abroad and china and the middle east are opening branches of universities abroad . In certain universities the first two years are carried out abroad and the final year in the US or UK tech also means that they are in constant contact with satellite universities. For Britain and America to prosper they may actually have to invest abroad to create markets for their goods and services. To people without insight all of china investments in other countries are about obtaining strategic natural resources. But the probable mix is: strategic natural resources 40% political influence 40% creating future markets for their goods and services 20% any way back to the main point. The scenarios and options are varied and I will write a policy paper on it in the future in detail lets look at some issues : Political:The is a political price for changing aid policy but it does not have to be for all aid only a part of it. The political will and cost to change some of the status quo might be high. The will be resistance to measuring the real not perceived returns of the aid possibly calling this type development investment as a policy might remove it from the main focus of aid and make it some thing else. The goodwill might be obtained if private companies can be involved to contribute (an example is private companies can jointly fund positions in Africa the salary for a experts and engineers where need). The job creation part of things can be sold as a good thing.* There is a problem that the jobs might be abroad ( a component of jobs will be in the UK). There are other government agencies that do similar things like the DFID but note these are not entrepreneurial enterprises and an extension of government policy this goes beyond and is leaner in its focus. If the UK wants to change its perception by countries that it has labelled future strategic trouble spots then this kind of aid might buy them some good will. In country like Ghana and Nigeria the post colonial tactic of divide and rule might not be very effective if they are competing with the Chinese for oil reserves and they want to win hearts and minds in the north of those countries etc.Economic: The long term view is to create jobs up date workforce skills by working abroad or working with international agencies. Our thinking has to change since, financial services is the biggest industry what other soft services can we expand: education, remote medical diagnostics, we can export our film expertise the current value of Nollywood films is $400 million (they need help with piracy and production skills ,training ,equipment). Africa is screaming for IT investment in a transformative way. The Kenyan, South African and Nigerian market is huge, the return per user is lower but the volume is higher and there is less legacy cost which means that most of the investment is lower over time. It would be nice if all the jobs our created in the UK but if it cant UK will still remain the base and nothing has stopped profits from being repatriated as shell BP and chevron (who have invested over $3- 10 billion in Nigeria) repatriate funds. There is an explosion of microfinance in Africa one of its main problems is financing the right investments access of their customers to training and goods and services I am sure that aid could be directed to help this fledgling businesses in a measurable way also the use of the internet though mobile Phones ( as opposed the internet because pcs are expensive and access is not as pervasive) The list is endless and the possibilities endless. Seeding the venture capital market there is a great market for new venture funds for Africa but the approach will be different, there is also the ability to skip certain tech steps examples are in the telecoms. Secondly there is the low tech approach which means that some tech solutions are too sophisticated in its implementation (manual labour is cheaper in some solutions). Healthcare and technology is another area of growth I personally know of three companies from the US who are looking at investments in Nigeria. Social: The ability to redefine or channel aid and manage the public’s perception of aid without strings. The impact of the aid will be measurable and the quality of life improvement can be measured. Technological: Create a market for UK Jobs directly / indirectly for goods and services. Create and adapt technology that works in the third world. Creating systems that are cheaper to deploy. The impact of telecoms as a platform for deploying tech. The largest and fastest changes are using telecoms as a payment platform. Green Tech might be expensive for Africa but there are opportunities to create research hubs ( there are hundreds of scientists underemployed in Africa) there is also the weather and people seem to forget that there are at least six development banks focused on Africa looking at investing. There is an opportunity for the UK to created the worlds largest development solutions database this looks at all the different solutions ( solar ,pedal powered, medical equipment ,industrial equipment ) and the cost, location, the companies with database analytics and all the case studies / example of its implementation . The UK should be the number one destination for research on development technologies and the UK can hold conferences and services and support. The UK can become the base camp or Hub for development tech. Legal: Patchy regulations and enforcement. Immense infrastructural huddles. Corruption.Ther is a problem arround security of foreign national abroad ( kidnapping is on the rise in oil rich areas of nigeria). This is just a brief overview of a policy paper I will be writing in the future as I have gotten other potential contributors interested. I personally feel squeamish about aid with the addition of strings but in exploring the issue dispassionately it might trigger some really good ideas.

Why does this matter?

Something new needs to be done about employment and job creation

Some thing need to be done about getting better measurable returns on our commitment to Giving aid to countries.

It should be noted that is idea works without the Aid element if you were looking at creating  jobs there are elements in this idea that speak to that. If you reposition the funding and look for private  sector contribution it still works .

I work as a business consultant and blogger (www.is2w.com) and Its important to start looking at job creation and the future of UK as a Hub for other services beyond financial services  .

Refining part of our aid budget might help. Since the government is not cutting this ,it should be used effectively and could start up a new channels for Jobs that is mutually beneficial to aid donors and recipients . This applies to a small fraction of our aid budget

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