New analysis shows significance of UK services trade with world’s poorest countries

Analysis of trade data by Development Monitor shows the significance of the UK’s service exports to Least Developed Countries.

The UK exported £2.5bn worth of services – such as financial services and management consulting – to Least Developed Countries in 2017, up from £2.0bn in 2016. The UN defines Least Developed Countries (LDCs) as low-income countries facing severe impediments to sustainable development. The UK also imported £0.7bn worth of services from these countries in 2017.

Development Monitor’s analysis allows easy comparison of different flows to and from developing countries. It shows that UK service exports to LDCs are similar in value to the UK’s bilateral aid to those countries. UK bilateral aid to LDCs was £2.4bn in 2016 (the latest year for which data is available).

Several Least Developed Countries spent more on UK services in 2016 than they received in UK bilateral aid, including:

  • Afghanistan: UK service exports £421m, UK bilateral aid £235m
  • Bangladesh: UK service exports £340m, UK bilateral aid £149m
  • Uganda: UK service exports £133m, UK bilateral aid £111m
  • Mozambique: UK service exports £63m, UK bilateral aid £55m

LDCs also spent a greater proportion of their national income on UK service exports than richer developing countries. In 2017, UK services exports were on average worth:

  • 0.31% of GDP for Least Developed Countries
  • 0.12% of GDP for Upper Middle Income countries (such as Brazil and China)

UK service exports to the Solomon Islands were worth 4.74% of their GDP in 2017, the highest percentage for any developing country. This is equivalent to £78.52 per person, compared to an average of £4.64 per person for other developing countries.

More trends and analysis can be found on Development Monitor’s financial flows dashboard.

Continue reading

UK investment in Least Development Countries has fallen by 30%

New data released by the Office for National Statistics, following a request from Development Monitor, shows that:

  • The UK’s outward Foreign Direct Investment (FDI) position in Least Development Countries (LDCs) fell 29.5% from 2014 to 2015
  • There was a net disinvestment of £2.7 billion by UK companies in those countries 2015
  • UK FDI in LDCs accounted for less than 1% of the UK’s total outward FDI position in 2015

Over the same period, the UK’s total outward FDI positions (in all countries) fell slightly (2.5%) from £1,078.7 billion in 2014 to £1,052.1 billion in 2015.

Find out more about the UK’s interactions with Least Developed Countries using our financial flows and trade dashboards.

Continue reading

Explore UK trade relations with developing countries

Development Monitor has launched a new trade dashboard which explores the UK’s trade with developing countries and shows the importance of this trade for both the UK and people in developing countries.

The dashboard supports Development Monitor’s submission to the All-Party Parliamentary Group (APPG) Trade out of Poverty inquiry on Commonwealth countries and its submission to the International Trade Committee inquiry into trade with developing countries.

The dashboard helps to answer questions like:

  • Which developing countries are most dependent on the UK as an export market?
  • How important is trade with the UK for Commonwealth developing countries?
  • What are the top developing country markets for UK goods and services exports?
  • Do developing countries that have signed up to an Economic Partnership Agreement export more to the UK than those that haven’t?

If you find the dashboard useful, or have suggestions for new features, please get in contact.

Continue reading

Even more information on UK interactions with developing countries

We are bringing more data sources to our data dashboard to give you an even richer view of interactions between the UK and developing countries. You can now get a preview of what we plan to offer, including:

  • A breakdown of trade by commodity type so that you can see what is driving changes in trade patterns, e.g. oil and minerals versus agricultural products or machinery (currently only for Nigeria in the preview).
  • An overview of the UK’s outward investment position in developing countries, split between direct investments in developing country companies (usually at least a 10% stake), equity investment (e.g. shares) and debt securities.
  • Investments made by CDC, the UK’s Development Finance Institution (DFI), whose aim is to provide capital to businesses and entrepreneurs in Africa and South Asia.
  • Activity of UK foreign affiliates – companies in developing countries that are ultimately controlled by a UK company – including their turnover and employment.
  • Payments by UK registered companies to developing countries for natural resources, with details on the company and payment type (e.g. taxes and royalties).
  • Licences for exports of arms and other controlled goods approved by the government’s Export Control Organisation.

This is just a demonstration so the data has not yet been verified or documented, and only offers a simple country by country view. But we plan to provide full documentation (as we do for our current dashboard) as well as new tools for analysis and interpretation.

Continue reading

Upgraded tool available for analysing financial flows between the UK and developing countries

Our data dashboard has been upgraded to allow you to analyse trends in financial flows between the UK and groups of developing countries.

You can explore trends in financial flows for different regions – for example South Asia, Sub-Saharan Africa; different income levels – for example all low income countries; or other categories such as Least Developed Countries, or the top 20 recipients of UK aid.

This means you can easily answer questions such as what are the trends in financial flows between the UK and Sub-Saharan Africa? 


If you then want to explore UK imports from Sub-Saharan Africa in more detail, Development Monitor can immediately show how imports have varied by country over the last few years and map out imports for a year of choice.

Alternatively you can answer quickly questions about trends in flows between the UK and different categories of countries, such as what are the trends in remittances from the UK to the Least Developed Countries?

Continue reading

A first look at UK-Developing country financial flows

Development Monitor has published bilateral financial flows between the UK and developing countries, but what can the data tell us?

To give a flavour of the insights on offer I had an initial look at five developing countries: Pakistan, Ethiopia, Nigeria, Sierra Leone and South Sudan. These countries were the UK’s largest recipients of bilateral Official Development Assistance (ODA) in 2015, receiving a total £1.4bn. First, there are a few things to remember about the data:

  • Remittance figures are World Bank estimates. The World Bank estimates bilateral remittances by allocating remittances received by each developing country among the countries of destination of its migrant nationals, weighted by various factors including number of migrants and incomes (the World Bank provides its full methodology here). Official UK figures relating to remittances are not split out by destination country.
  • Foreign Direct Investment (FDI) data is incomplete. Prior to 2013, UK FDI figures covered a very limited number of developing countries. For 2013-2015, ONS has produced more comprehensive FDI datasets. However, these are still incomplete because ONS considers that releasing the data for many countries would be ‘disclosive’, i.e. the data could be identified with an individual business.  According to ONS, fixing this in future releases would require them to change the sample size for the business survey on which the FDI data is based. In addition, it is helpful to see these FDI flows in the context of FDI positions, for example the stock of UK direct investments in Pakistan. Data on FDI positions will be included in a future update of Development Monitor’s data dashboard.
  • Take care when comparing different types of flows.  Some flows are transfers – for example remittances and (some kinds of) ODA, whilst others are commercial and associated with a corresponding transfer of resources – for example traded goods or, in the case of FDI, acquisition of equity in a foreign subsidiary.

All the flows we report and data sources used are explained here.


Remittances and trade dominate

The two biggest financial flows from the UK to Pakistan (for which data is available and published on Development Monitor) have consistently been  payments for UK imports from Pakistan and remittances.

The value of goods imported by the UK from Pakistan was around twice the value of UK exports to Pakistan in 2015 (£1069m versus £516m). The size of this difference has increased as UK imports from Pakistan have grown faster than UK exports to Pakistan. Although not yet published on Development Monitor, trade in services between the UK and Pakistan is also significant.

Remittances fell twice as much as aid increased in 2013

From 2010 to 2015, with the exception of 2013, estimated remittances were around three times as large as bilateral ODA. The estimated £309m (32%) drop in remittances in 2013 was more than twice the £149m (79%) increase in bilateral aid spending in the same year.


Aid is important, but trade is increasing

Bilateral ODA is the biggest financial flow (for which data is published on Development Monitor) from the UK to Ethiopia, and has been around £300m since 2010. Remittances are very low in comparison, only reaching £11m in 2015.

UK imports from Ethiopia increased significantly in 2015 to £147m, more than double what they were in 2010 (£61m), but the UK still exports more to Ethiopia than it imports.  At the moment, there are no official figures available for UK FDI into Ethiopia.


Remittances are far larger than aid flows

Nigeria is the third largest recipient of UK bilateral ODA (£263m in 2015). However, ODA flows are small compared to remittances from the UK to Nigeria, which are consistently around ten times higher, for example £2.5bn in 2015.

UK imports from Nigeria fell by £2.5bn between 2012 and 2015

The value of goods imported by the UK from Nigeria has varied significantly over the last five years. Imports peaked in 2012 at £4bn and then fell £2.5bn (158%) over 3 years to £1.5bn in 2015. Over the same time, UK exports to Nigeria declined gradually from £1.6bn in 2012 to £1.1bn in 2015. FDI flows into Nigeria from the UK have increased significantly from a disinvestment of £875m in 2013, to an investment inflow of over £3bn in 2015.

In addition, illicit financial flows from Nigeria to the UK could be very large and outweigh all other flows, although these are clearly challenging to estimate with any accuracy.

Sierra Leone:

Mainly aid

Like Ethiopia, the largest financial inflow (for which data is available and published on Development Monitor) to Sierra Leone from the UK is bilateral ODA, which increased significantly after 2013 (£70m) to over £200m in 2014 and 2015. Remittances and the value of UK imports from Sierra Leone were much lower, consistently less than £15m each.

Trade mostly involves the UK exporting to Sierra Leone

The UK imports very little from Sierra Leone, with the value of imports dropping to just £1m in 2015, from ‘highs’ of £14m in 2011 and 2013. The value of goods exported from the UK to Sierra Leone fell by over 50% from 2013 to 2015, nonetheless over the years 2011-2013 the value of these exports matched or exceeded the value of bilateral ODA.

At the moment, there are no official figures available for UK FDI into Sierra Leone.

South Sudan:

Nearly entirely aid

Bilateral ODA flows quadrupled over the period 2011-2015, increasing from £52m to £208m. There is little or no recorded trade between the UK and South Sudan and zero remittances according to World Bank estimates. There are no official figures available for UK FDI into South Sudan.

Continue reading

Development Monitor launches financial flows dashboard

Development Monitor has launched the initial version of its dashboard showing financials flows between the UK and developing countries. The dashboard is the first step in Development Monitor’s work to monitor interactions between the UK and developing countries, with the aim of improving accountability for policies (beyond aid spending) that affect developing countries.

The initial version includes bilateral flows for remittances, Official Development Assistance (ODA), trade in goods and Foreign Direct Investment, with trends shown over the five years 2010-2015.  The data currently covers all developing countries classed as low income and lower middle income by the World Bank.

The dashboard is currently being developed and tested so please contact(Replace this parenthesis with the @ sign) with your feedback and suggestions. Over the coming weeks and months we will be introducing new ways to explore the data, adding more datasets (such as investment positions, CDC investments flows and payments for natural resources), as well as looking at what the data can tell us.

Continue reading