How Brexit Will Impact Africa

Should trade barriers go up between the UK and EU, there could also be opportunities for greater direct trade between Africa and London.

- Paula Slier

HOW WILL BREXIT IMPACT Africa? From the general uncertainty and escalating protectionism in global markets, one thing is clear. No one knows. But if there’s anything the experts agree on, it’s that the United Kingdom (UK)’s departure from the European Union (EU) is likely to have the same negative effects on Africa as much as anywhere else.

The UK market is not one Africa can ignore. It is the world’s fifth-largest economy, trailed by India. But China, and new players to Africa like Russia, Turkey, and the Gulf states, make London’s role on the continent less critical.

At the same time, Africa is not a hugely significant trading partner for the UK and in 2017, represented only 2.6% of imports and exports alike. Still, there are signs that London wants these figures to increase and in January 2020, a UK-Africa Investment Summit will explore how to leverage investments in Africa and expand current trading patterns.

The main concern for African companies over Brexit is the protection of their access to UK markets. Currently, a number of entry points into the EU are used so that instead of sending small parcels to 27 countries, goods arrive in one central depot. African corn flour, for example, enters through a warehouse near Amsterdam in the Netherlands and from there is distributed across the EU, including to the UK.

“Now, there need to be new arrangements and these could be more costly,” warns Dr. David Luke, Co-Ordinator of the African Trade Policy Centre at the United Nations (UN) Economic Commission for Africa, based in Ethiopia.

Currently, companies operating out of least developed countries send their goods into Europe duty-free and quota-free. In the case of cornflour exports, the UK absorbs a substantial portion of the fees.