Brexit

What It Means For South Africa

In late June this year, media platforms were flooded with the news that the ‘leave campaign’ secured the majority vote in the United Kingdom’s (UK) withdrawal from the European Union (EU), or as it has become known, British exit (Brexit) referendum. Headlines such as ‘Brexit: markets in shock’, ‘Rand weakens by over 8% following Brexit vote’, ‘Commodities reel in world market tumult as UK votes for Brexit’ and ‘Pound, Asia markets collapse as Britain quits EU’ dominated publications as the effect of the vote took hold.

Mixed emotions

Contrasting opinions have arisen, with many feeling that benefits should outweigh the negatives and will be experienced in the long run, but that dark days lie ahead for the UK in the short term, as economic turbulence should continue for some time before markets will stabilise. On the other hand, some feel that the UK has taken the wrong turn, creating enemies as well as exposing itself to political and economic volatility.

“We have to remember that Brexit will be a very long process,” says Dawie Maree, head of information and marketing at FNB Agriculture. “Many analysts argue that the process will continue throughout the rest of the current decade and the full effect will not be seen before the end of this period.” He argues that Brexit is by no means the end of the world. “As soon as the dust settles and market volatility subsides, it will be the start of a very interesting time for the UK and the EU.”

Wandile Sihlobo, economist at the Agricultural Business Chamber (Agbiz), adds that Brexit cannot simply be labelled as good or bad. “It holds many advantages and disadvantages, depending on the many perspectives that can be taken. It will be a long road, and as soon as the dust settles there will be many negotiations to determine the road ahead.”