Written by Jude Sablah
Brexit, the rather popular term for Britain’s departure from the European Union, has caused panic and uncertainty worldwide with investors unsure about the state of the Britain economy post – Brexit. Effects on the UK’s economy may have already taken off with the collapse of one the kingdom’s largest travel and airline service – Thomas Cook.
Africa in the middle of all this also stand the risk of loss of market since UK is one of the leading importers of raw materials from most if not all African countries since most trade negotiations were done through the EU
Before Brexit, bilateral trade between Nigeria, Africa’s largest economy, and Britain was worth about £6 billion, and had been projected to reach £20 billion by 2020. With Brexit, that projection looks overly hopeful.
Nigeria is struggling with falling oil prices, its main income source. Crude chemicals and allied materials make up almost a quarter of Nigeria’s trade with Britain. A potential drop in oil demand coupled with low oil prices could dim the Nigerian economy’s prospect for recovery.
The International Monetary Fund in July 2016 announced that Brexit will likely plunge the Nigerian economy into a recession that year, shrinking by 1.8% from the earlier 2.3% growth projections.
Kenya on the other hand, being Britain’s third largest market in Africa with South Africa and Nigeria being the first and second respectively could witness capital flight after Brexit, leading to falling exports. This could weaken the Kenyan shilling and make imports more of a luxury for a country that has seen a 10% increase in import bills in the past seven years.
The Kenyan profitable flower industry, for which Britain is the second-largest export market after the Netherlands, could see a catastrophic decline in revenue. A trade deal for flower exports between the East African country and the Eu was already in works before Brexit. If a trade deal between the East African countries and the EU is stalled by Brexit, Kenya could lose billions of shillings, which could lead to a dilemma for Kenyan exports.
Kenya will now have the tedious task to negotiate separate deals with Britain and the EU, without which Kenya may lose up to 4 billion Kenyan shillings a month as per the predictions of the Kenyan Flowers Association, which represents the flower businesses in the country.
These and other things Africa or some African countries my lose post – Brexit, isn’t it high time Africa industrialized?
With the fall in export of raw materials in some African countries because of Brexit isn’t it time Africa exploited other options with industrialization as one?
Africa produce a relatively larger percentage of raw materials and natural resources in the world but still low on manufacturing. Manufacturing in Africa is projected to reach $666.3 billion by 2030 as per 465.02 billion in 2015, but is this all we can do as a continent?
Most of these raw materials are exported to non – African countries and are been imported back as finished goods at a ridiculously higher price as compared to that of the raw materials.
Africa should take inspiration from “Brexit” and think of its own and how to build a strong economy which is not based on any foreign country.