December 1-15, 2018
Ever since the Brexit referendum of June 2016, Africa experts have been pretty worried about the economic impact of Brexit on Africa. Though it is too early to predict the fallout of Brexit, some readings on the wall cannot be ignored.
Most of the African economies are highly sensitive to fluctuations in global commodity markets. Brexit is sure to unsettle an already rattled global economy .Any resultant disruption in global commodity prices, is sure to upset several African economies.
East Africa, with its deep historical, economic and political ties with the UK is the most worried as UK is still the leading destination for EAC exports . Floriculture in Kenya is one such example. A major chunk of the roses grown in Kenya and destined for Britain travel through the Netherlands. U K imports nearly $1 billion worth of flowers annually through the Netherlands. However, Flowers currently shipped duty-free may encounter tariffs ,which will be a great setback for the flourishing floriculture industry of Kenya.
The UK and the EU are still among the leading donors in the region. A decline in their support, both directly and through the impact of the UK withdrawing from the European Development Fund, will certainly have repercussions. With Brexit, UK and EU are bound to review key areas of their trade, investment and development policies, including the Economic Partnership Agreements (EPAs) and the Common Agricultural Policy (CAP). The value of the EPAs is bound to change if UK is no longer part of EU.CAP which has been a major bone of contention for the entry of African Agricultural Products to EU, will face even stiffer barriers. Moreover, from December 2020, the UK will no longer be bound to extend the two EU preferential trade arrangement schemes (EU-GSP and EBA) to the East African Community. UK’s commitment to Overseas Development Assistance is also likely to face two challenges- Post Brexit economic slump and the rising hostility of the ruling Conservative Party to developmental assistance.
Over and above, Brexit shows a red flag to the entire process of regional integration. The EU, like the EAC, represented a bold project of political and economic union. The faltering of this model for integration may shake the very confidence and optimism on the idea of reginal integration of Africa.
