The short-term implications of Brexit for African economies will be mainly noticeable through market volatility, a report by Control Risks and NKC African Economics says.
However, according to the consultancy firm, the longer-term impacts on Africa from Brexit are speculative and depend as much on the attitude of future British governments as on the terms of exit.
The report notes that longer term implications – both economic and geopolitical – hinge on what the terms of Britain leaving the EU are, and how this feeds through transmission mechanism to Africa through trade, aid and soft power and political influence.
“Ultimately, the impact of Brexit for the continent will be defined by the global agenda in the coming months,” Jean Devlin, Director for Africa Analysis, at Control Risks says.
“As political risk has increased in the traditionally safe havens of Europe and with the election in the US later this year, there is less scope for international cooperation to address issues of particular relevance to African countries such as peace and security issues, development, impacts of climate change.
Many observers in Africa see the UK’s ‘Leave’ vote as a sign that Britain will become a more inwardly-focused country with less focus and interest in upholding commitments to human rights and inclusive global development.
Whether this is perception or reality, the influence of the UK’s Department for International Development (DFID) on the development agenda is likely to change, the report adds.
DFID has played an influential role over the past 15-20 years in setting a progressive agenda for EU development aid, not least through a commitment to spend 0.7% of GNP on overseas development aid.
According to Control Risks, the fact that the UK is one of the few countries in the world to meet this target and has enshrined it in legislation underlines the role the country has played to date, but whether that continues under new leadership and beyond is now more seriously in doubt than many realise, especially if a recession is looming in the UK.