Africa: When Brexit finally came calling

Following Prime Minister Theresa May’s Africa tour last week, we now have a fairly good idea what Brexit might hold for the EAC and the continent at large.

The picture had been fuzzy in the two years since the Brexit vote about what it would mean, not just for Africa but for the Britons themselves, the European Union and the world in general.

Depending on which side of the divide is looking at it, Prime Minister May’s government has occasionally been accused of not seeming sure which way to steer the exit process in the drawn out negotiations with the EU to offer some certainty about what to expect.

However, for the broader perspective in attempting to make sense of it in our local situation, I suppose one would have to start from beginning.

It will be recalled that, arguing from what to many non-British observers appeared a logical perspective against Brexit, it did not seem wise or necessary that Britain, accounting for less than one per cent of the global population and roughly three per cent of the world’s GDP, should contemplate leaving the European Union.

The EU is the world’s largest trading bloc, accounting for some 20 per cent of global GDP. Thus, if it was about trade, this means that for any region, the EAC included, it would appear reasonable to do business with the EU market than the much smaller UK.

Buttressing this view, it might have seemed that, other than being among the leading members in the bloc, Britain should have been socio-economically cosy under the expansive, borderless Schengen arrangement that offers many unique benefits to EU countries and citizens, alike.

But strange things happened in 2016 that many observers around the world had not adequately considered their connectedness, but which we now stand corrected: Donald Trump swept to power on a populist anti-immigration platform as one of the major concerns in the United States, as did Brexit winning the UK referendum with a narrow margin on the same anti-immigrant sentiments among other perceived misgivings against the EU “bureaucracy”.

We also now know the populist backlash across Europe and the US had been long coming, as globalisation and the disruptive aspects of artificial intelligence and other technological advancements that have been affecting livelihoods continue to take hold.

Which brings us back to May’s trip to Africa on a “Brexit Britain” agenda that one British media outlet described with suppressed irony as hopeful, if somewhat meaningless under the label “Global Britain”.

“As prime minister of a trading nation whose success depends on global markets,” she told business leaders in Cape Town, South Africa, “I want to see strong African economies that British companies can do business with.”

She was right on the point, but not without a hint that Brexit came calling with one of its key messages being to contain potential economic immigrants within the continent.

In pledging to prioritise investment in Africa with the aim to make the United Kingdom the G7’s number one investor in the continent by 2022, it is, as The Independent suggested, not a bad thing that it is also “to stimulate trade and economic growth in Africa and enable Africans to stay where they are rather than migrate to the West.”

Closer home, however, the expectation had been that, Brexit or not, the status quo should be about maintaining or expanding the existing UK market, which Rwanda and Kenya lead in the EAC with 20 per cent and 30 per cent of their respective exports to Britain.

The means that come the day Brexit becomes operational, the UK should extend the market access provisions under the two preferential arrangements while it was still within the EU.

The two preferential arrangements are EU standard Generalised System of Preferences (EU-GSP) and the Everything But Arms (EBA) initiative that the EAC currently enjoys under the current EAC-EU Economic Partnership Agreements (EPA) scheme.

The concern now is that, despite Prime Minister May’s hopeful vision “to see strong African economies that British companies can do business with” after Brexit, the UK will no longer be bound under the prevailing EU-GSP and EBA arrangements by which Rwanda and Kenya may now stand to lose.

This makes for an urgent concern, as it is also against the simmering differences within the EAC that prevent a unified stand regarding trade with the EU.

The differences need to be ironed out about whether the EU Economic Partnership Agreements bode well for the industrial growth of the region and - or, its nascent economies.

That said, it still seems to me it all boils down to an anticipatory Brexit argument I suggested that it will take a united region, as much to strengthen its hand as to challenge international trade regimes that often work against the continent (see “Brexit: What’s in it for Africa?” The New Times, March 12, 2016).

Twitter: @gituram
The views expressed in this article are of the author.