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Saturday, September 26, 2020

Britain seeks closer economic ties with Africa following Brexit

Economy Britain seeks closer economic ties with Africa following Brexit

Britain is leaving the European Union on Friday, starting the clock on an 11-month transition period during which the country will try to sign as many new trade deals as possible. African countries are a prime target.

The UK government has said that it will prioritize trade negotiations this year with the European Union, but it has also made early overtures to countries such as Mozambique and Ghana. Prime Minister Boris Johnson clearly wants closer economic ties with Africa.
“We in the UK have a vital job in continuing to convince people across the continent that we’re not just a great friend and ally, a reliable ally, but also the people you should be doing business with,” Johnson said earlier this month at the UK-Africa Investment Summit.

Huge potential

While a member of the European Union, Britain lagged some of its peers in terms of exports to Africa.In 2018, the United Kingdom exported goods worth roughly $10 billion to the continent, according to EU data. That was less than other EU countries including Belgium, the Netherlands, Italy, Spain, Germany and France.

But the dynamics could change after Brexit, according to Tokunbo Afikuyomi, a former trade economist who worked in the United Kingdom.
“Before Brexit, the EU made agreements on behalf of the entire union, and the interest of the UK may not have been a priority for the EU at the time of making those negotiations,” he told CNN Business. “Now Britain can negotiate with more countries as they want.”
The United Kingdom has already started to replicate EU trade agreements that will no longer apply when the transition period ends. So far, trade deals have been signed with 11 African countries, according to the UK government, covering 43% of the country’s total trade with Africa.

What does the UK have to offer Africa?

The UK government touted Africa’s potential as a trading partner during this month’s summit in London.
Africa is home to eight of the world’s fastest-growing economies, the UK government said, and there is significant demand for services that can be provided by Britain.
“We have much to offer African nations — UK aid is tackling climate change and supporting women entrepreneurs, our tech and digital expertise is helping Africa grow new industries and the city of London is channeling billions of private investment into Africa,” said Alok Sharma, Britain’s international development secretary.
The United Kingdom announced commercial deals worth £6.5 billion ($8.6 billion) during the summit, including one signed by engineering company Rolls-Royce.

Andrew Jones, head of Africa practice for Linklaters, a law firm based in London, said that UK companies are looking to increase their investments in Africa. “I think the government is getting involved now to more systematically open up new markets,” he told CNN Business.
A huge free trade zone taking shape in Africa could also benefit UK companies by expanding markets and making it easier to do business across borders.
“Some of the UK’s large aid budget could [support] the creation of the African Continental Free Trade Area … which would promote economic growth and offer more opportunities for UK exporters,” Sam Lowe, senior research fellow at the Centre for European Reform, wrote recently.

What’s in it for Africa?

When UK businesses expand into African countries, they bring in knowledge, skills and technology, said Afikuyomi, who is now an editor at Stears Business.
They also bring money in the form of foreign direct investment.
“[Foreign direct investment] is a powerful tool for developing countries, especially countries like Nigeria where the government and central bank have been working towards attracting more investors,” said Afikuyomi.
African countries could also have better opportunities to raise revenue by exporting more of their services and goods to the United Kingdom.

Barriers to trade

Trade deals may help reduce tariffs and other barriers that have stymied trade between Britain and Africa.
“Some countries will be unable to export goods to the UK if the opportunity presents itself because they cannot meet the required standards for trade,” said Afikuyomi.

Unexpected and sudden changes in the value of currencies can also complicate trade in Africa, said Jones.
Nigeria and the Democratic Republic of Congo have experienced exchange rate problems in the past. Nigeria devalued its currency in 2016, making it more expensive to buy foreign goods.

Competition in Africa
Other countries have been proactive investors in Africa in recent years.

In 2019, Germany set up a $1 billion development fund to promote infrastructure development and private investment on the continent. German companies including Volkswagen (VLKAF) and Siemens (SIEGY) have also established plants in countries like Rwanda and Ghana.

China, Africa’s largest trading partner, has invested billions of dollars in various sectors including, film, infrastructure and education across the continent.
Jones said more countries investing in Africa is a big win for all parties, including the United Kingdom.
“China has done lots of great things on the continent. On a macro level what they have done is incredibly useful for everyone. They have built infrastructure and funded airports,” he said.
“One of the great bottlenecks for many developing countries is the lack of infrastructure. So, the more infrastructure the better,” added Jones.

[CNN Business]

20 COMMENTS

  1. Beware of the loose canon. If they don’t treat us as equal partners then we are better off on our own. They have already shown us what they mean by “closer ties” – seeking to control our resources and wanting to influence our way of life by forcing us to accept man to man marriage and endorse GLBT rights.

  2. They had a struggle hold on Africa for over 100 years, extracting resource and not investing in human development.

    Even the development assistance they have given since independence will not be enough reparations for the skewed development they imposed on African countries.

    Dear UK. We will look both east and west, while advancing mutual respect.

  3. Zambian need to wake up and act fast. Rather than crying for government to spoon feed you why not start a business with hope of taking advantage of this opportunity Brexit has afforded us. Myself I am already engaging a few business partners in the UK on njimber of issues. Kz

  4. Where is Zambia and Edgar Lungu?? Rejects!!
    Can’t wait for HH to chair those UK-Africa meetings, HH will be better than King Kagame.

  5. You are right. The Bembas say ati imbwelela ilaliya. Britain has never had any good intentions for black africa, And nothing has changed. Once a colonizer always a colonizer

  6. Africa being treated as a fall back by the powerful UK. With the right leadership Africa should have been competing with some of these powerful countries

  7. “Africa will never be independent. Africans believe in Europeans, Americans and Chinese more than themselves–they don’t trust themselves at all.

    A white man will commit crime in Africa but no action will be taken because Africa authorities view us as semi-gods, far from the truth. A blackman can be abducted in Europe, get harrassed or even killed but no African authority will question. Africans present themselves as weak people with no hope especially when dealing with Europeans and Americans.

    They are their own enemies. They hate each other and that gives their colonial masters power to continue exploiting African resources. ”

  8. Africa will never be independent. Africans believe in Europeans, Americans and Chinese more than themselves–they don’t trust themselves at all.

  9. Zambia is always behind. This meeting was held almost two weeks ago and sensible presidents from Africa attended. Your president did not attend this meeting. You are busy wiping the ar.se holes of the Chinese. Just like bums you are behind and writing this as if it is latest news.

  10. Zambian forget easily. Did we have major issues with these britons when they imposed a governing council of settlers over our affairs and ruled out black representation in the 1950’s. M

    It took the revolt over discrimination in pay between black and whites in the mines to give momentum towards 1964.

    What do they want now? We need a level playing field.

  11. I want a good piece of land to start up my chamba business. It’s needed badly here in Canada manje licence pa Zed ati how?

  12. Midget African economies with very low incomes are just deceiving themselves.The total trade between UK & Germany alone was worth $135bn in 2017.

  13. THE TRUTH MUST PREVAIL
    Former UK Prime Minister, Teresa May, made a trip to Africa as a prelude to the BREXIT saga. Boris Johnson is also paying attention to Africa so as to offset economic turmoil after UK’s departure from the EU. Britain misinformed Europe and USA on status of Zimbabwe and galvanised economic sanctions against the Mugabe’s Government. Let the truth prevail. Problems between UK and Zimbabwe did not arise due to Mugabe’s governance style. Rather UK abrogated an Agreement at Lancaster House when UK committed to pay white farmers land to settle Africans. This forced Mugable to unilaterally grab the land for distribution to his people.

  14. UK lobbied some European States and US – who lacked research prowess – to mount economic sanctions on Zimbabwe. History tends to repeat events. President George Bush misinformed the World on Saddam Husain’s governance style in Iraq. Tony Blair reciprocated by supporting USA to wage war in Iraq. Americans and British peoples later discovered that George Bush and Tony Blair lied on Iraq status. The British who detest deception quietly fired Blair as Prime Minister.

  15. THE TRUTH MUST PREVAIL
    Former UK Prime Minister, Teresa May, made a trip to Africa as a prelude to the BREXIT saga. Boris Johnson is also paying attention to Africa so as to offset economic turmoil after UK’s departure from the EU. Britain misinformed Europe and USA on status of Zimbabwe and galvanised economic sanctions against the Mugabe’s Government. Let the truth prevail. Problems between UK and Zimbabwe did not arise due to Mugabe’s governance style. Rather UK abrogated an Agreement at Lancaster House when UK committed to pay white farmers land to settle Africans. This forced Mugable to unilaterally grab the land for distribution to his people. The truth must prevail.

  16. UK lobbied some European States and US – who lacked research prowess – to mount economic sanctions on Zimbabwe. History tends to repeat events. President George Bush misinformed the World on Saddam Husain’s governance style in Iraq. Tony Blair reciprocated by supporting USA to wage war in Iraq. Americans and British peoples later discovered that George Bush and Tony Blair lied on Iraq status. The British who detest deception quietly fired Blair as Prime Minister.

  17. Boris Johnson can restore the integrity of the British people by immediately LIFTING ECONOMIC SANCTIONS on Zimbabwe, a country that has earned the respect of most influential African States such as Angola, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Uganda and Zambia. The strength of the Commonwealth of Nations will hinge on UK’s courage to correct its grave political mistakes in Africa – particularly UK’s attitude on Zimbabwe.

  18. Boris Johnson can restore the integrity of the British people by immediately LIFTING ECONOMIC SANCTIONS on Zimbabwe, a country that has earned the respect of most influential African States such as Angola, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Uganda and Zambia. The strength of the Commonwealth of Nations will hinge on UK’s courage to correct its grave political mistakes in Africa – particularly UK’s attitude on Zimbabwe.

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