Premature for African investors to join Brexit panic
and Britain’s other African top trading partners, particularly Nigeria, Kenya and Egypt. After South Africa, Nigeria is Britain’s second-largest African market, with Kenya coming third.
Before Brexit, bilateral trade between Nigeria, Africa’s largest economy, and Britain was worth about £6 billion (R106bn), and had been projected to reach £20bn by 2020. With Brexit, that projection looks overly optimistic.
Nigeria is grappling with falling oil prices, its main income source. Crude chemicals and allied materials make up almost a quarter of Nigeria’s trade with Britain. A potential drop in oil demand coupled with low oil prices could dim the Nigerian economy’s prospects for recovery.
Tunji Andrews, a Lagos-based economist, said Nigeria could not rely on the EU to make up for the shortfall in earnings if the British economy went into a recession.
British government statistics show that investments in Africa doubled between 2004 and 2014, from £20.8bn to £42.5bn.
Kenya, Britain’s third-largest market in Africa, could witness capital flight after Brexit, leading to falling exports. This would weaken the Kenyan shilling and make imports more expensive for a country that has already seen a 10 percent increase in import bills in the past five years.
Kenya’s lucrative cut flower industry, for which Britain is the second-largest export market after the Netherlands, could suffer. A trade deal on flower exports between the east African country and the EU was in the works before Brexit.
If a trade deal between the East African Community and the EU is stalled by Brexit, Kenya stands to lose billions of shillings, which could lead to uncertainty for Kenyan exports.