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10 Jun 2021

Role in the World

The impact of Brexit on Africa might influence the UK’s trade with the continent less than the current pandemic. Whether London’s ambitions concerning the opening-up of new worldwide markets, notably in Africa, will be realistic is doubtful.

Competing global players, including the remaining EU27, are not lying low: the EU envisages a new partnership on an equal footing with Africa, as outlined in its joint communication Towards a Comprehensive Strategy with Africa.

It is also preparing – albeit with some difficulty – for the sixth EU-Africa summit in Lisbon, and a new partnership agreement between the EU and the Organisation of African, Caribbean and Pacific States (OACPS) will be signed in the second half of 2021, replacing the Cotonou Agreement.

Although Europe has been severely hit by the pandemic, Africa is likely to suffer even more. According to the World Bank, the pandemic will cost the region up to $79 billion: the decline of world trade due to the coronavirus crisis hits the continent through collapsing international trade and strained global supply chains, falling remittances and capital flows, and problems in meeting foreign currency payment obligations.

The collapse of oil and commodity prices, for example, will have a devastating impact on several African economies that depend on these for more than half of their exports. Moreover, remittances dried up because of the pandemic, with fatal consequences for the poor and vulnerable.

These transfers had increased significantly in recent years, and constituted almost three times the amount of official development aid –  $48 billion was sent to sub-Saharan Africa in 2019.

In the following I offer a more detailed analysis of the (potential) combined effects of Covid-19 and Brexit on members of the British Commonwealth in Africa, taking the example of South Africa, Nigeria, Ghana and Kenya, with special emphasis on the impact on the most disadvantaged social strata of society.

In Sub-Saharan Africa, South Africa had been arguably the hardest hit both by Brexit and Covid-19. Many citizens, notably the poor, mainly working in the informal sector, are more concerned about the economic impact of the pandemic than the disease itself.

However, the combined effects of Brexit and Covid-19 are likely to have a tremendous impact, notably on the car industry and the South African labour market – independent of the inordinately more serious economic effects of the pandemic.

In Nigeria, the most populous country on the continent, the pandemic started relatively late, and modestly. In the beginning, the poor envisaged Covid-19 as a plague of the rich and the elite, or as God’s punishment for the country’s decades of looting. Economic activities were reduced under the lockdown restrictions.

Production, trade and consumption are falling, and many jobs will be lost. President Buhari seems to have shared the hubris of the British, pressing ahead with high-flying plans for a post-Brexit deal with the UK, including free trade within the Commonwealth and with the UK.

Ghana counts also among those countries in Sub-Saharan Africa which have been most severely hit by the pandemic. As elsewhere, the gender distribution of Covid-19 in Ghana is unequal, with significantly more men infected than women.

But unlike South Africa and Nigeria, the direct effects of the pandemic on the downturn of its economy are not as significant, because of its favourable resource base and the effective anti-coronavirus measures enacted by the government.

In Kenya the case-to-fatality ratio for Covid-19 had been much lower than for the SARS pandemic of 2003, but the transmission of the coronavirus has been significantly greater.

Nevertheless, many Kenyans saw the UK’s departure from the EU as a blessing in disguise, because UK investors presumably would look for rapidly growing countries that could both trade with the UK and were also unaffected by the EU’s imminent restrictions for the UK.

However, the relative weight of the UK vis-à-vis other global players like China and India, and even the EU, will diminish in the medium and long term. And after all, the new global focus of international trade will be reallocated from the Atlantic (America and Europe) to the Asian Pacific region, the key player in the world economy to come.

Those who are to suffer most by the combined effects of Covid-19 and Brexit are the poor and needy.

By Dirk Kohnert, former deputy director of the Institute of African Affairs at the German Institute of Global and Area Studies (GIGA-Hamburg). Dirk’s recent article on the impact of Brexit on CANZUK, and a more detailed biography, are available here

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