Association Nationale des Jeunes Economistes du Burkina Faso

Association Nationale des Jeunes Economistes du Burkina Faso

The impact of Brexit on Africa

Following the UK’s surprise vote to leave the EU, we assess the probable impact such a departure would have on African trade, investment, and security policy. In this free special report, EXX Africa analyses the impact of an eventual ‘Brexit’ on three of the UK’s most important African markets: South Africa, Nigeria, and Kenya.  

Executive Summary:

  • The UK vote to leave the EU was based on a non-binding advisory referendum and does not guarantee the UK’s departure from the EU. However, months of political uncertainty throughout Europe will rattle global and African markets.
  • If the UK does leave the EU, the impact on many African economies will be short-term and relatively insignificant. The UK will have two years to renegotiate trade agreements with African countries.
  • The South African economy is now more likely to fall back into recession and extreme currency volatility indicates that a downgrade of its credit rating to non-investment grade in December is now almost inevitable. Bi-lateral security cooperation and aid programmes face less disruption.
  • The effective implementation of a new foreign exchange mechanism and liberalisation of the fuel sector will face fresh hurdles as the UK withdraws from the EU. Nigeria will also struggle to attract interest in new debt sales aimed at financing its expansive budget.
  • Kenyan markets were relatively stable following the ‘Brexit’ vote, although any disruption in EU trade negotiations would negatively impact the cut flowers export market. It is likely that the UK would prioritise trade negotiations with Kenya, which could even benefit Kenya and other EAC members.

Lire le rapport complèt via le lien ci-après

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