Africa’s Stake in Brexit
Africa is less reliant on aid than ever before, but ties to donor countries, and the UK in particular, remain important for sectors like telecommunications and banking. Preparing now for Britain’s inevitable divorce from the EU is not only prudent for many African countries; it may be a matter of economic necessity.
OXFORD – As Britain focuses on what its relationship with the European Union might look like once it leaves the bloc, sometime during 2019, the rest of the world is already girding for the post-Brexit era. For many African countries in particular, preparing for the inevitable divorce is not only prudent; it may be a matter of economic necessity.
Many analysts obsessively track China’s economic footprint in Africa (in 2015, there were an estimated 2,650 Chinese development projects underway on the continent). But the United Kingdom has been a far more committed investment partner to the continent over the years. At the end of 2014, British foreign direct investment in Africa was £42.5 billion ($54.1 billion), more than double the £20.8 billion that UK interests invested in 2005. British FDI has flowed largely to the telecommunications and financial services sectors, but development aid and infrastructure projects have also been a focus.
This upward trend is likely to reverse, however, if Brexit negotiations with the EU lead to an erosion of confidence in the British market. As Britain is forced to shore up its own economy, looking for opportunities abroad might seem less justifiable.