The renegotiation of UK trade deals is making Africa an exciting investment opportunity
All existing trade deals between the UK and Africa were negotiated within the established rules, constraints and regulations of the European Union (EU). Whilst these deals are relatively small when compared to those much of the African continent has with their biggest trading partner China, in fact in 2014 only 5% of Africa’s total exports were to the United Kingdom (UK), the economic impact of losing these current trade deals would still be very damaging to both the UK and Africa.
The UK has always been a major supporter of Africa
Some African countries have expressed concerns that Africa will have a lower profile in an EU that doesn’t include the UK, as the UK has always supported and encouraged the creation of deals between the EU and Africa. This reduced profile could result in a reduction in the amount of support Africa receives from the EU. Sangu Delle, a pan African macro finance investor said about the UK, “It was instrumental in supporting development aid being allocated to Africa, and when the UK held the presidency of the G8, we saw debt cancellation and a lot of pro-Africa programs,”.
Renegotiations of deals between the UK and Africa
Over the last few years a number of trade agreements have been instigated between the EU and Africa however due to the significant involvement of the UK in the creation of the majority of these deals, the longevity of some of them could now be at risk, and separate deals will now need to be negotiated between the UK and Africa.
When talking about the challenges resulting from the decision made by the UK to leave the EU, Sangu Delle said, “A lot of this is due to uncertainty about trade agreements that have been negotiated between the EU and African countries in the last several years, and which may now have to be renegotiated,”, “African countries will have to negotiate their own individual trade agreements with the UK: the UK and Nigeria, for example, have combined trade worth over 8 billion dollars.”.
The global economic challenges suit strong businesses
Whilst the precise impact of Brexit is unknown the continent has proven to be very resilient over the years, and whilst Sangu Delle is hopeful that strong investors will continue to come to Africa, and only the weaker ones will leave in coming years, he said “If the capital comes, great; if capital doesn’t come, we’ll figure it out,”, he then added that “People are creative and innovative, and life has to go on. I’ve now spent time in 43 countries across Africa. The one thing that I’ve seen in every single one is resiliency. No matter what the socioeconomic situation, whatever hand they’re dealt, people move forward.”.
Africa is forecast to be the fastest expanding region in the world over the next century, and as such the potential for increased African – UK investment and trade is massive. It is hoped that the creation of the Department of
International Trade by the new British Prime Minister Theresa May, will encourage the creation of new trade deals between the two nations. Key representatives have already warned the UK that focusing on deals with the US, Canada, India and China, and ignoring the opportunities in Africa will be very detrimental to their economy due to the continents forecasted growth in coming years.
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