Brexit to Benefit African Exporters in Long-Term, Ecobank Says
(Bloomberg) -- While trade and investment in Africa may decline when the U.K. leaves the European Union, the long-term effects are expected to be net positive for the continent’s exporters, according to Ecobank Transnational Inc.
In the longer term, capital flows are especially likely to increase between the U.K. and English-speaking countries such as Kenya, Ghana and Nigeria, said Edward George, the head of research at Africa’s most geographically diverse lender. While increased exports of agricultural and mineral products will partly depend on whether the U.K. develops as a hub for processing, transporting and consuming those products, the biggest opportunities may lie in digital-service and financial-technology collaboration, he said in a phone interview.
The U.K. is sub-Saharan Africa’s sixth-largest trading partner with total flows of $20.8 billion last year. Foreign-direct investment from the U.K. to Africa was $2.4 billion last year according to a report by accounting firm EY.
The more immediate effects of Brexit on Africa will likely be negative, including a potential slowdown in integration and liberalization of regional trade, George said.
Most of the existing trade arrangements that African countries have with the U.K. have been negotiated through the EU, which means they will need to redefine trade and investment relations with the U.K.