What Does Brexit Mean for Africa?

On June 23, 2016, the British people voted in a referendum to withdraw from the European Union — a historic move that is still being processed today. “Brexit” not only impacts the United Kingdom’s relationship with the European Union, but also the rest of the world’s trade agreements with Britain. As the international community continues to wonder what Brexit will mean for trade deals and partnerships, one important stakeholder is the continent of Africa.

In a recent article, Dirk Kohnert evaluates key issues that would be affected by a post-Brexit partnership between the UK, African countries, and the EU, including market access, foreign direct investment (FDI) and aid, and cooperation. The relationship between Britain and African nations has evolved significantly since the end of colonization. Although Brexit has generated uncertainty, it will create new partnerships and economic opportunities for Africa because Brexit will force Britain to cooperate with other nations and create new trade agreements. The study focuses on the 19 Commonwealth states in sub-Saharan Africa, including major economies such as Egypt [1], Ghana, Kenya, Nigeria, and South Africa. The UK has been one the biggest export destinations for these countries, which means that African governments face the challenge of renegotiating trade agreements with the EU and UK that preserve strong trade links amid Brexit uncertainty. As the UK accounts for 20 to 30 percent of EU exports for countries like Egypt, Kenya, Mauritius, and Nigeria, a post-Brexit recession would have significant consequences.

According to Kohnert, the UK wants to create a “Global Britain” that is contingent on a renewed relationship with Commonwealth nations. Post-Brexit policies will aim to protect emerging African industries. Because the British government was able to create a Brexit deal with the European Union, African countries can be hopeful about the possibility of a trade agreement with Britain. During the G20 Summit in 2017, then-British prime minister Theresa May promised that a post-Brexit Britain would continue its “Aid for Trade” policy, which builds trade capacity and infrastructure to increase economic opportunities for developing nations. Between 2005 and 2014, the UK increased its investment in Africa by about £20 billion. Although the British government intends to encourage companies to increase FDIs, a British accounting firm reported that post-Brexit FDIs would likely decline rather than increase. Britain’s perspective on its relationship with Africa after Brexit is associated with its trade and financial strategy.

Although May promised an increase in FDI, Kohnert claims that Brexit could cause a decrease in aid to Africa. First, anti-aid sentiment in Britain has increased over the years for several reasons, including the Oxfam scandal in Haiti. Second, Brexit may lead to a devaluation of the Pound. Third, Brexit could impact Britain’s partnership with multilateral development organizations, such as the United Nations. Some Brexiteers and African politicians have stated their support for a deeper and more equal relationship between Britain and the Commonwealth. African governments are taking advantage of the fact that their countries are in-demand partners and are pushing for investment.

Although Britain has had a strong relationship with Commonwealth countries, there has been tension in recent years — specifically with the increase in people leaving former British colonies to pursue work and educational opportunities in the UK. Africa is at a critical point in its debut on the world stage. Despite the continent’s long history with the UK, Kohnert contends that the evidence for a reformed partnership between Brexiteers and African politicians is inconclusive. Although African countries would have new choices in terms of trading partners, it is uncertain whether Britain can provide trade incentives that other nations interested in Africa are already implementing. Creating an economic partnership that is grounded in mutual respect and equity will be a key ingredient for British-African relations in a post-Brexit world.

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Research source: Kohnert, Dirk, “More Equitable Britain-Africa Relations Post-Brexit: Doomed to Fail?” Africa Spectrum, 53(2). (2018): 119–130. doi: 10.1177/000203971805300206. [1] Though Egypt is part of his analysis, Kohnert mistakenly includes it among Commonwealth and sub-Saharan nations, of which it is neither.

Featured graphic created by: Gloria Dorame