Brexit offers opportunities for Africans

December 30, 2020

As the transition period between the United Kingdom and the European Union comes to an end on December 31, 2020, Africa will be watching keenly on the opportunities and challenges that will come in the post Brexit era. According to experts, though immigration to the UK may be lower overall, there may be increased opportunities for migrants to come to the UK from non-EU countries, especially Commonwealth countries.

That may increase the share of immigrants to the UK from developing countries, which is good both for the migrants themselves, and through increased remittances for their families at home. However, some research show that the new points-based system will favour applicants from economically developed countries in Europe and the United States.

Owen Barder an analyst with the Center from Global Development says increased remittances will be good for those in Africa who survive on financial assistance from the diaspora. Brexit might affect remittance flows if the economy is affected in a negative way.

If the currency weakens, this will lead to decreased remittances. As the Brexit deal did not make provisions for financial services, this could impact remittance companies operating in both the UK and Europe.

In July this year, a group of UK Parliamentarians called for action to reduce remittance fees, citing evidence that recipients in the developing world use the money efficiently, starting small businesses and buying property.

One company that has played a big role in connecting the diaspora community and their families in Africa is Dahabshiil which has a huge presence in Africa, the Middle East and several European nations including the United Kingdom.

The CEO of Dahabshiil, Abdirashid Duale, who recently met the British Prime Minister Boris Johnson, said, “Brexit could bring business opportunities and partnerships by British and European companies working with indigenous African companies such as Dahabshiil to create jobs and opportunities for all.”.

The World Bank’s Migration and remittances factbook 2016 ranked the UK as the world’s tenth largest remittance sender.

The parliamentarians also said that Brexit opens new opportunities for creating a fairer export environment for African producers.

The African Continental Free Trade Area (AfCFTA) provides an excellent opportunity for the UK to work with African partners to boost bilateral trade and investment. The gradual replacement of Economic Partnership Agreements (EPAs) with a comprehensive UK–Africa trade agreement involving goods, services and investment must be on the agenda.

 There are many areas where the UK and developing countries can work together to boost trade and investment. A combination of aid, trade and investment is the most powerful tool to generate opportunities to boost economic transformation and economic growth.

 Experts say Africa could feel the positive impact of the UK’s exit from the EU. In fact, 18 African countries are part of the Commonwealth, the organisation that has been pegged as the UK’s alternative to the European single market. If the country were indeed to focus its trade and investment efforts on Commonwealth countries, Africa would be one of the main beneficiaries.


But even non-Commonwealth African countries could see renewed interest from British corporates.


“Following an exit from the EU, when developing new trade relationships will be crucial, UK firms will need to reassess their trade and investment strategies and exploit more opportunities in Middle Africa’s largely untapped markets. Growth could be particularly strong in sectors such as fintech, pharmaceuticals, machinery and engineering,” Ecobank’s head of research, Edward George states

 The UK will need to consider a continental approach to Africa. The goal should be for a comprehensive single trade agreement with all 54 countries that incorporates limited reciprocity, immediate access to the UK market, and phased-in access to the African market.

 A single continental approach would reduce the multiplicity of new arrangements the UK would have to negotiate while also being aligned with Africa’s plans for continental regional integration plan as per Africa’s Agenda 2063.



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