Since 2016 when Brexit was first announced and polls were open for voting, people globally have experienced unrest about what the political and economic implications of such a move would be.
Africa’s Role on the Global Stage
Seeing as the world has become so globalised, a decision as major as whether or not to leave the EU could affect countries all over the world. This is especially true for the continent of Africa which has major trade agreements with all parties involved in Brexit. With that being said, if you’re wondering what Brexit’s effect on the African trade industry will be, continue reading below.
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It has been said that one of the most evident effects of Brexit on African countries will be in the category of trade and investment. This is because the majority of trade agreements that the UK has with African countries were negotiated through the European Union.
1. The South African Tire Trade Industry
What this means in practical terms is that these agreements will either no longer apply or have to be renegotiated with both parties once Brexit is final. This could directly affect the African trade industry as countries like South Africa who is the UK’s largest African trading partner could see a shrink in their GDP and slower economic growth resulting from weaker trade and investment ties.
2. The Nigerian Tire Trade Industry
Likewise, Brexit could affect trade between Britain and Nigeria who happen to be their second largest African market. Crude chemicals and allied materials make up a significant amount of Nigeria’s trade with Britain and the drop in demand as well as low oil prices could have a damaging effect.
3. The Kenyan Tire Trade Industry
Britain’s third-largest market in Africa, Kenya, was in the process of negotiating a trade deal on flower exports with the EU before Brexit. In a worst-case scenario, they’d have to negotiate separate deals with Britain and the EU which could put them at a loss if the terms aren’t favourable.
4. Emerging African Tire Trade Markets
In terms of the impact, Brexit could have while the terms are being hashed out, it could hit emerging markets hard, especially those that suffer whenever there is a slump in the British economy.
In this scenario, one of the best things that African countries can do to protect themselves is to consider redefining their relations with the UK and Europe so that terms are favourable post Brexit.
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