The British people have just shocked the whole world by voting to exit the European Union. The vote basically separates the United Kingdom from the European Union after more than four decades of being a member of a union that has come into question in recent years as the world grapples with a fragile economy.
A lot will be written and said about this vote as its implications for the world and indeed Africa starts to unravel. We are still not sure what this means for us in Nigeria. We have also reached out to our content partners and analysts to pen an article explaining what this means for us. In the meanwhile, we found a few foreign articles that probably best explains what it could mean for the continent of Africa.
Brookings – The Brexit: What implications for Africa?
ISS Today report – ISS Today: What Brexit means for Africa
News 24 – How Brexit will impact South Africa
Here are some key highlights of each article.
In sum, there are a number of ways through which the Brexit could have an impact on African countries, starting with its impact on the global economy, reduced British outwardness when it comes to global development issues, as well as decreased bilateral development assistance and trade. They are all difficult to quantify but broadly point to a negative impact on African countries. The Brexit referendum is rather inopportune as African countries are facing serious external shocks such as the fall in commodity prices, an economic slowdown in China, and higher external borrowing costs. There is not much that they can do on the external front that leaves adequate and timely domestic policies the priority.
If the UK does pull out, it won’t be official policy and it won’t be personal – but Africa, and especially South Africa, will nonetheless be hit, and possibly hard, by the Brexit shock waves; like every other part of the world, economists believe.
Trade, investment and, indirectly, even development aid, are likely to be hurt.
Nonetheless the sale of Kenyan roses – and all other African exports – would be hurt if the UK went into recession after exiting the EU, which he was sure it would. They would also similarly be hurt by the decline in the EU economy, which would also surely follow, Barrow said.
If the preferential trade agreements which form the cornerstone of the EU are diminished as a result of any UK exit, this will surely have a knock-on effect here in South Africa. After all, South Africa remains the UK’s largest African trading partner and while it has slipped lower on our domestic radar screens in terms of export trade, the UK remains our seventh largest import and export market in global terms (2014 figures).
A Nairametrics take on this to come soon.