UK aid bankrolls fixer to make profits for Chinese businesses in Africa
Published by The Mail on Sunday (17th December, 2017)
Britain is handing aid to an organisation headed by a wealthy Chinese-born businesswoman who seeks to help Chinese manufacturers move their factories to Africa in order to exploit lower labour costs.
The revelation, based on documents leaked to The Mail on Sunday by a whistleblower, is the latest astonishing example of profligacy by the Department for International Development as it spends its bloated £13 billion budget.
It also raises fresh concern over government dealings with aid contractors after this paper’s series of stories disclosing dirty tricks, tax avoidance and dodgy profiteering by fat-cat poverty barons.
The controversial deal – worth £297,020 initially with proposals for subsequent multi-million-pound projects to lure Chinese firms to Africa – was signed off in June.
The cash went through another contractor to Made in Africa, a UK-registered company. Its most prominent figure is Helen Hai, a businesswoman and UN goodwill ambassador. Three months before winning the work, she registered Made in Africa Initiative as a limited company in Hong Kong.
One outraged source close to the scheme said it was a ‘simply bonkers’ use of tax revenue. ‘British aid money meant for development in poor countries is going to friends of the Chinese government to help with China’s trade in Africa.’
China is one of the biggest investors in Africa, doubling foreign investment there last year, while British commercial spending declined sharply amid uncertainty over Brexit. There has been fury over millions in UK aid spent in such a wealthy nation.
‘This should be stopped immediately,’ said Tory MP Nigel Evans, a member of the International Development Committee.
‘British taxpayers’ money should not be used to support Chinese businesses and one of the world’s fastest-growing economies. China has its own aid budget, which is colossal and used for its own self-interest.’
The spending is part of the £100 million Invest Africa programme pushed by Priti Patel, who was International Development Secretary until she was forced to resign last month. The scheme is intended to generate business and jobs.
Hai argues that the continent can benefit from Chinese firms moving production abroad to slash rising labour costs. She set up the Made in Africa Initiative to ‘exploit this window of opportunity’.
The organisation told Dfid its role was to bring together British and Chinese expertise to facilitate investments in Africa.
One ‘draft two-year activity plan’ for Uganda, written for Dfid in September, proposes focusing on ‘targeted sales missions’ to China, with three trips there compared with just one to the UK and two more to other Asian or European nations.
It even urged British taxpayers to fund a bilingual Chinese-English ‘guidebook’ for foreign investors. An ‘indicative’ work schedule planned 1,500 days of consultancy work, including a study visit to China, and £125,000 for sales mission expenses.
An experienced aid industry contractor who examined the report for The Mail on Sunday estimated the total cost to Dfid would be about £2 million. Dfid sources said the plans have been rejected although they may be resubmitted. The organisation submitted a similar report for Dfid-funded work in Rwanda.
‘The timing is excellent to help Rwanda benefit from the opportunity to attract some of the massive expected outflow of Chinese manufacturing investments to Africa,’ it said.
It again suggested ‘inward’ and ‘outreach’ sales missions to target countries with a total of six five-day events for China, four for India but just three for the UK – plus videos and online promotional materials translated into Chinese.
Yet Ministers have defended their lavish aid spending by arguing it boosts Britain. ‘There is a whole raft of opportunities for us to use that money in our national interest, global Britain’s interest,’ Ms Patel told MPs before her dismissal.
Hai, who is married to a successful Chinese financier and used to run a shoe factory in Ethiopia, has bragged in interviews about her wealth. ‘If I stop working, I don’t need to worry about money,’ she told the state-run China Daily.
Documents seen by this paper appear to show her firm, working with colleagues at the Centre for New Structural Economics at Peking University, charges up to £3,000 a day for senior staff in Africa.
An invoice from Made in Africa Initiative for a two-day trip last month by Hai and a colleague totalled £101,70.71, including £3,474.04 for her flight, £962.77 for her hotel room and £2,700 on fees.
Hai declined to discuss if this was for Dfid-funded work as one source suggested. Dfid said it had not received the invoice.
Despite such high costs, a report into Ugandan business zones was criticised for its ‘limited findings’ after being reviewed by Dfid officials. ‘We found it particularly light on content, evidence and analysis,’ one told Hai two months ago.
This is the latest furore over Dfid’s spending as it seeks to hit the UN target of giving away 0.7 per cent of national income in aid.
Adam Smith International, the biggest specialist aid contractor, cleared out its top staff this year after the MoS exposed its use of dirty tricks to win contracts and dupe MPs investigating profiteering in the poverty industry.
Two weeks ago the Government halted one of the firm’s multi-million-pound projects amid allegations that money was ending up in the pockets of jihadi groups.
Hai said her organisation’s mission statement was ‘to support African countries to achieve sustainable inclusive growth’. She insisted there was no preferential treatment in her strategy towards Chinese firms, pointing to an advisory board for her Hong Kong organisation with members from 14 different countries.
A Dfid spokesman said developing nations needed sustainable economic growth and investment to defeat poverty.