Page 13 - Nile Explorer Issue 007

whose FDI fell by 14.2 per cent to $1.3 competition from China, a more inappropriate now for the UK or a
billion from $1.5 billion while Tanzania positive outcome, with some additional wholly inappropriate way to define the
recorded a seven (7) per cent drop in trading opportunities and FDIs inflows UK-Africa relationship,” says James
FDI to $3.3 billion from $4.8 billion in will follow. Duddridge, a former British minister
the same period. To date, the only visible ‘Brexit’ impact for Africa and a Brexit supporter, in an
However, FDI inflows to Burundi on the EAC was the fall in the value of interview with Radio France Internatio-
nale. Without the EU, he said, ties
increased to $146 million from $65.1 the Pound Sterling. The Pound was between Britain and Africa will get
million, while in Rwanda FDI grew to massively sold off, which resulted in a stronger.
$1.2 billion from $600.1 million in the rough 7 per cent decline relative to the
same period. Ugandan Shilling. The good news is that Africa can actual-
From other available reports, specific Such effects certainly affect Trade and ly seek assistance elsewhere. Africa’s
trade with Europe, estimated at €106
remittances from the United Kingdom, investment since most of the trade billion (US$116.6 billion) in 2016, has
EAC countries would be directly arrangements the UK has with African been eclipsed by China’s. Worth an
impacted by the devaluation of the countries were negotiated through the estimated $300 billion, China is Africa’s
sterling, which is expected to happen as EU. This means the agreements will top trading partner currently.
the sterling adjusts against the Euro and cease to apply or will have to be renego- The World Bank confirms that China
other convertible currencies, resulting tiated when the UK finally leaves the became sub-Saharan Africa’s “most
in declines in the value of remittances in EU, a process that will take two years important export partner” by 2013,
the years ahead. from the time it officially informs the accounting for 27% of the region’s

Moreover, it is also reasonable to EU of its intention to pull out. exports “compared with 23% for the EU
assume that remittance flows will be Despite fears that Brexit could dislocate and 21% for the US.” Although at 9%,
negatively impacted by any negative African economies, some experts see sub-Saharan Africa’s exports to India
economic consequences of Brexit on the positive developments for countries like are the fastest-growing globally.
UK economy itself, particularly if it Libya and Zimbabwe, currently under With China, the US, Brazil, India and
results in higher rates of unemployment EU sanctions championed by Britain, others strengthening their relations
or lower rates of economic activity according to The Herald, a Zimbabwean with Africa, the continent could look
among migrants. So far, however, this daily. With Brexit, the EU might be elsewhere if its ties with Britain or the
has not been demonstrably the case. encouraged to review these sanctions EU get complicated in a post-Brexit era.
According to experts, the pattern of and possibly re-engage with these coun- It is also significant to note that, while
post-Brexit trade with the EU-27 and tries. the direct impacts through investment,
UK is more diverse for the rest of Africa “Britain will be able to focus more on trade and remittances are likely to be
block than in the case of the EAC, due to our bilateral relationships with Africa relatively small, EAC countries should
the greater heterogeneity of economic and with our traditional partners and to position themselves to benefit from the
structure across the whole of the really look at Africa for its needs rather creation of new export opportunities as
African continent. However, it is nota- than looking at it through the prism of an indirect consequences or impact of
ble again that the net gains in trade are the EU, that is an outdated model that Brexit on the global economy. In partic-
largest in the extractive sector, may have fit in the 1970s but is wholly ular, the influence on the Economic
processed food and grains and crops. In Partnership Agreements (EPAs) with the
other words, outside food processing, it European Union is an areas of interest.
would contribute little to the structural Another key consequence of Brexit for
transformation and diversification of Africa, and particularly EAC is that it
African economies It is therefore true, could undermine confidence in regional
from and economic perspective that integration processes like the EAC and
Brexit will create challenges for the East the implementation of the recent-
African Community — but not neces- ly-signed African Continental Free
sarily in the way that is commonly Trade Area. •
thought—meaning, such challenges can
never be disruptive—as to worry policy
makers. Brexit is not going to lead to a
sharp reduction in trading or invest-
ment links; indeed, there is reason to
believe, that as UK get more assertive on
the continent, particularly, in the face of
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