12 Brexit Implications For Africa That Will Surprise You

By Keren Mikva Published: August 11, 2016, 2:56 pm
Britain's decision to leave the European Union may have enormous implications on the African continent BBC

The United Kingdom held a June 23 referendum to leave the European Union, shocking the world when voters chose to leave by a narrow margin. While economic uncertainty abounds across the E.U., the impact has been felt worldwide, particularly in African countries that have long enjoyed close relations with the U.K. and the rest of the European continent. U.K. Minister for Africa James Duddridge was a proponent of Brexit, promising that relations with the continent would improve without the burden of the E.U. It remains to be seen whether or not this is true. Here are 12 implications of Brexit in Africa that you probably didn’t even think about.

Sources: Business Insider, The Guardian, African Arguments, Graphic, Bloomberg, Financial Times, London School of Economics and Political Science, All Africa, Brookings

A woman harvesting tea in Uganda Africa Up Close

Harvesting tea in Uganda. Africa Up Close

Brexit harms economies based on exporting raw materials

Many African economies that rely on exporting raw materials could see a huge slow-down in growth and increasing deficits as Brexit harms the global demand for goods. If global demand for raw materials decreases, the prices for key commodities – including minerals, ores, and others – may fall further.

The flags of East African nations - a bloc that is in the midst of trying to renew a trade deal with the EU Afritorial

Flags of East African nations trying to renew a trade deal with the E.U. Afritorial

An East African-E.U. trade deal fell through due to Brexit

In late July 2016, Tanzania and Uganda refused to sign an economic partnership agreement between East Africa and the E.U. over Brexit concerns. The deal was meant to ensure that the East African Community (Tanzania, Uganda, Kenya, Burundi, and Rwanda) would be able to continue to export goods to the E.U. without quotas or tariffs. The Tanzanian government said they backed out due to “the uncertainty in E.U. after the exit of U.K.” If the deal is not ratified by Oct. 1, the current trade deals will lapse. The original agreement was negotiated for nearly a decade and has been in effect since October 2014. Should the deal fall through, Kenya will face tariffs of 4.5-to-19.5 percent due to its status as a wealthier developing country than its neighbors.

Source: Financial Times

Tourism operators, such as those leading safaris in the Tanzanian bush, are concerned about decreasing traffic as a result of an economic downturn SimonsHolidays

Tourism operators are concerned about decreasing traffic. SimonsHolidays

Tourism will decline

In times of economic hardship, tourism declines. If Brexit results in decreased prosperity across Europe, would-be tourists are less likely to travel to Africa for safaris and other holiday activities, a sector that many African countries have come to depend on.

People in England protesting the treatment of African migrants being detained from entering Europe Free Association

U.K. protests treatment of African migrants being detained from entering Europe. Free Association

African immigration to Europe will decline

If the U.K. successfully leaves the E.U., fewer African workers will be able to obtain permits or visas to work overseas in Europe. Many African migrants depend on their ability to travel overseas to work in developed nations and send much of their higher wages back to their home countries.

A local produce stand in London may stand to begin importing more of its goods from Africa in the wake of the Brexit Darbi Fruit and Vegetable

A local produce stand in London. Darbi Fruit and Vegetable

The U.K. may import more produce from Africa

Currently, nine out of the 10 biggest produce importers in the U.K. are E.U. member countries. Potential changes to E.U. tariffs and the falling value of sterling have forced some retailers to consider sourcing from different countries; 38 percent say they expect to see more produce from Africa. South Africa is already the No. 2 source of fresh fruit to the U.K. after Spain, and Kenya may become a beneficiary of the changing trade patterns.

Source: The Guardian

Aid from the European Union Africa would be expected to decline if the economy declines Cloudinary

Aid from the E.U. to Africa could decline if the economy declines. Cloudinary

Aid from the U.K. and Europe may decline

The projected economic slowdown in the U.K. from Brexit will impact the country’s gross domestic product, ultimately impacting the resources available for foreign aid. Many African countries rely on aid from the U.K. and other European governments for vital infrastructure projects and key services for citizens.

Investment in sub-Saharan Africa, which has risen in recent years, could begin to slow down Infrastructurene

Investment in sub-Saharan Africa could begin to slow down. Infrastructurene

Investment in sub-Saharan Africa may slow down due to risk aversion

In times of economic uncertainty, investors are less likely to take risks. Capital flows that were previously booming in sub-Saharan Africa may begin to dry up and financing costs may increase.

Burundi rice farmers are among those that could be hurt by European Union farm subsidies without the United Kingdom to champion against it Oxfam Blogs

Burundi rice farmers could be hurt by E.U. farm subsidies without the U.K.  Oxfam Blogs

African farmers may hurt by E.U. support of agricultural subsidies

The U.K. was one of the staunchest opponents of the E.U.’s support for agricultural subsidies. Without a power player championing the cause, African farmers who stand to be hurt by the subsidies may suffer further.

The new UK Prime Minister, Teresa May, has been reorganizing her cabinet in the wake of the Brexit Zimbio

U.K. Prime Minister Theresa May has been reorganizing her cabinet in the wake of the Brexit.Zimbio

 

Africa’s status may be downgraded in U.K. politics

The U.K.’s new Prime Minister Theresa May has decided to fold the U.K.’s African Ministry into the Middle East Ministry as the government attempts to pull staff from various departments to help with Brexit negotiations. Some have pointed to this as a sign that Africa has been downgraded in importance in the U.K., and will have even more trouble fighting for increasingly scarce resources.

The South African plummeted, making it the second worst-performing currency after the British pound JBay News

The rand was the second worst-performing currency after the British pound. JBay News

South Africa’s rand plummeted following the Brexit vote

South Africa’s close financial and economic ties to the U.K. caused the rand to plummet following the Brexit vote, becoming the worst performing currency after the British pound.

A protest promoting the creation of a Biafra state in Nigeria Nigeria Communications Week

A protest promoting the creation of a Biafra state in Nigeria. Nigeria Communications Week

Other secession movements have become emboldened

Following the Brexit vote, other European countries – such as France, Holland, Italy, and Denmark – called for their own referendums to leave the E.U. Similarly, the ground-breaking vote emboldened secessionists in Africa, such as the activists in southeast Nigeria who have been calling for the establishment of an independent country called Biafra for years (in fact, they already called for a referendum earlier this year, which was denied by the Nigerian government).

A protestor holds a sign against the Brexit, predicting worsening times for the UK and its outward approach to global leadership Telegraph

A Brexit protester predicts bad times for the U.K. and its approach to global leadership.Telegraph

An end to British “outwardness”

Though less tangible than economic consequences, many fear the Brexit vote represents a time of isolation in British politics. The U.K. may now face opposition and limits to the extent to which it can respond to global development issues and conflicts; as many African countries have long depended on the U.K. as a strong ally to national issues, this is a major concern to African leaders.

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