Will Brexit affect Africa at all?
THE fascination with Brexit continues with the torturous process of democracy being showcased. All the important institutions of the state are playing a role, the executive, parliament, the Supreme Court, the Queen – and it has already cost Britain, two prime ministers. But it is the effect of Brexit on Britain’s relationship with the rest of the world and with Africa that is of great interest to some commentators.
The European Union that Britain joined in 1973 and confirmed by a referendum in 1975 has changed significantly in mission and purpose over the years to give it relevance. It now has 27 states with a population of nearly half a billion people with an influx of members from the former Soviet Bloc. In the referendum of June 2016, 52 per cent of the British people voted to exit in a campaign that was reduced to four main issues: Britain as net contributor, sovereignty being compromised, large influx of people into the country, better trade deals that can be negotiated with the rest of the world. Evaluation of these reasons has been a source of debate amongst politicians and people alike over the past three years and posed the difficulty for leaving after a 40 year union with an amicable separation. Some explanation of these issues provide a context for why Brexit is a quintessentially British affair.
Britain contributes roughly nearly £13bn to Europe and receives around 8 percent of the total EU of £1.2 trillion back at present, but EU funds helped to develop areas of Wales and the North East after the collapse of the shipbuilding, coal mining, textile and steel. In Scotland it became a lifeline after North Sea Oil dried up. There have been judgements of the European Court of Justice against the British government, but the European parliament has not usurped the sovereignty of Britain, and the influencCe of the Queen has not been diminished in any way.
With the free movement of people, Britain has struggled to keep its promise of reducing net immigration to the tens of thousands and there has been some frustration about the impact on educational, health and housing services, but London has greatly benefitted from the skills brought from Europe.
So the optimism that better trade deals can be negotiated will depend on how well Britain will recover from the aftershocks of the exit and whether it can really negotiate a deeper relationship with America, a more a meaningful relationship with China and India and a new closer relationship several years after abandoning its ‘captive’ Commonwealth community.
British trade with the whole Commonwealth is roughly equivalent to its exports to Germany of 9 percent and imports from the Netherlands 8 percent. Its trade is mostly focused on Australia, Canada, India, Singapore and who account for 73 percent of imports of services and 6 percent of imports of goods.
If there is not that much trade between the Commonwealth and Britain, there is even less with Africa. Africa with 54 countries and a population nearing one billion has a GDP share of 5.1 percent of the world economy whilst Britain with a population of around 65 million people accounts for 2.4 percent, but Britain’s trade with Africa represents less than 3 percent of its trade with the rest of the world and is declining.
Almost 50 percent of exports, mostly in services are to the three largest economies in Africa, South Africa, Nigeria and Egypt and 58 percent of its imports are from the rest of Africa mostly agricultural produce. The trade with Africa remains with the imports of primary products and exports of finished goods, nothing new here but the export of services seems to be rising gradually in areas such as finance, health and education.
After the Brexit vote, there have been attempts at courting more trade in Africa. Theresa May went on a junket while she was prime minister to try and attract some countries in southern Africa and Britain recently signed a trade deal with six Southern African countries that are part of the Southern African Customs Union (SACU).
The expectation, however, is that foreign direct investment will continue to be on the increase since Britain has a track record of a deeper knowledge of Africa. The City of London is still regarded as the financial capital of the world and the place to come when seeking investment and source money for development projects and some suspect that it will attempt to exert more of its influence in Africa.
There are sceptics who believe that a weakened Britain after Brexit really has nothing of use to offer Africa unless the basis of any negotiation for trade is about Britain looking for new markets and new opportunities. Some feel that so many other countries are already in Africa that Britain will find it very difficult to compete at this time. There was a time that Britain had an influence on Africa through its colonies but since most countries became independent, other countries have filled the gap through trade.
There are many who also believe that not only will there be less money to be spent by the European Union on its interests in Africa caused by Britain’s exit but that the money that will be withheld will not result in an increased spend by Britain on Africa.
Russia became influential for a while during the 1960s and the 1970s using both investment and institutional military aid to help countries fight their wars of independence and it has recently been announced that Russia is seeking to re-enter the continent for more trade and investment. The Chinese are now totally dominant in Africa with regard to trade, infrastructure development and, lately, institutional building at the country and continental level as it forges closer links with the African Union.
Britain’s newer relationship in Africa will certainly be welcomed if it adopts an approach to dealing with the continent on a more equal footing. Africa is no longer a captive market and though it is still desperate for trade and investment, it is increasingly more discerning of the terms of that trade. There is a lot of competition as the continent moves from being a frontier territory to an emerging marketplace.
What does Britain have to offer to the continent that others are not providing? Will Britain offer better? An area for consideration is to explore ways in which Britain can assist Africa with adding value to its primary products that form a larger part of import from Africa. More scholarships for study abroad, more enterprise development, more consultants working to develop institutions, more transfer of skills to add value in areas such as health, finance, education, tourism, better diplomatic relationship and more investigation into the needs of Africa.
A better relationship will involve Britain providing more money through its international development budget to engage in building. It will involve a relaxation of the rules of immigration to allow more access and skills exchange, and it will involve less lecturing about human rights record and more trade deals.
A meaningful relationship will hinge on how Britain can reconfigure its position in Africa to the days when Lynda Chalker was the Secretary of State for International Development. She was well respected then because realising the continued strategic importance of Africa to Britain she forged a relationship based on diplomacy, development and aid.
What Africa now needs most from Britain and indeed the rest of the world is respect for its deepening democracy, assistance with establishing sustainable institutions that will sustain development and a lot of investment so that its economy can grow.
Africa has a large market for trade and has a capacity for acquiring consumer products as its middle-class base widens. It is unlikely that Britain’s exit will be beneficial to Africa that is now seeking to forge a closer union to become a more potent economic block.
All this talk of Brexit has been exciting as it dominates the airwaves with the twists and turns but what is clear is that it affects Britain and Europe more than it affects the rest of the world. It is unlikely that any other country stands to benefit from the fracture in the European Union, and it will not dampen the desire by many more countries to join. Britain’s exit from Europe remains a quintessentially British pastime!
This article was originally published on Pages 8 and 9 in AFRICA BRIEFING NOVEMBER – DECEMBER 2019 – https://africabriefing.org/magazine/