Sub-Saharan Africa In The Post-Brexit Era: Improving Security Through Trade

The Brexit referendum revealed the polarization of British politics, the increasing resistance to a centralized London economy, and to a greater extent the centralization of politics in Westminster. The domestic concerns and opportunities behind the UK’s future departure from the EU and its single market are widely discussed, but what does it mean for the UK’s relations with sub-Saharan Africa?

One of the largest problems surrounding any outward geopolitical discussion over sub-Saharan Africa has been perception. Concerning trade or political negotiations, non-African stakeholders often believe the negatives outweigh the positives. The risks of conflict and famine often supersede the opportunities of unique market access and an array of different different economies to trade with. For this to change, the analysis of Africa which has traditionally shifted between the polar extremes of “Africa Rising” and “Dark Continent” must end.

There are security risks to be aware of: the Boko Haram insurgency in Borno State, north western Nigeria; Al Shabaab insurgency in Somalia and northern Kenya; endemic famine in East Africa caused by political and environmental reasons, are but a few. And yet, allowing these perceptions to dictate one’s perception of an entire continent risks an over simplification of the fastest growing and most diverse continent in the world.

Africa consists of 54 states — not including the contested state of Western Sahara — in which over 2,000 languages are spoken. Around 70% of Africans are less than 25 years of age, 40% live in urban areas and, by 2050, the continent will have a middle class the size of Europe. Economically, Africa has had sustained economic growth for over a decade and a half. Although these figures should be considered carefully alongside poverty levels. Africa has no shortage of youth, which contrasts with an aging European population. 

One thing that hampers this growth is widespread unemployment and a lack of economic diversification. Too many African economies rely on a handful of commodity exports. Take Nigeria: 90% of its GDP arises from oil production, and yet it has a population of over 190 million which is well-known for its urbanized and entrepreneurial youth. To keep with this growth push, the World Bank believes that 50,000 new jobs must be created every day since 5 million new graduates are without a job every year. 

Unemployment is never good for security. People become unhappy and feel increasingly disillusioned and disconnected from the state. Those who do not leave the country for work are forced to work in the informal economy, or worse. Mix this with a slumping oil price and a steady reduction of foreign direct investment (FDI) and the economic impacts can be detrimental for African insecurity.

African security from post-Brexit uncertainty

Britain has not always had a smooth relationship with Africa. The UK’s highly controversial management of the Kenyan Mau Mau Uprisings (1952-1960) and its reluctance to enforce trade sanctions during the South African Apartheid Government’s tenure have not been forgotten. That being said, the UK has had a close and historic trading relationship with many African economies.

Trade and investment between Europe and Africa will, however, be affected by Brexit. Most of the UK’s trade arrangements with African economies have been negotiated through the EU. These agreements will, therefore, not apply or need to be renegotiated after the UK pulls out of the EU. The lead up to this point, and the time afterwards, will be a difficult and uncertain period for Africa, particularly because Britain will no longer lead and coordinate the most important initiatives on the African continent that shape the cooperation between Africa and Europe.

Emerging markets will be affected. South Africa will struggle given that the UK is its eight largest import-export partner. Many South African companies are listed on both the Johannesburg and London stock exchanges, and several South African banks rely on British cash reserves. Nigeria’s economy, which is struggling because of low oil prices, also depends heavily on British trade. Nigeria will not be able to depend on the EU to cover the gap from earnings if Britain’s economy falters.

Even Kenya, Britain’s third largest market in Africa, has witnessed capital flight since the Brexit announcement. Now that the trade deal between the East African Community and the EU has collapsed — because of Tanzania, Burundi and Uganda’s refusal to accept the terms — Kenya’s flower and coffee exports do not look promising. According to Kenya Flowers Association, Kenya may lose up to US$39 million a month from Brexit and the collapse of the EU deal.

Brexit will also affect the EU’s development aid to Africa. Of the total 2014 European Development Fund (EDF), Britain contributed US$543 million or 14.8% of the budget. Without Britain’s contribution, the EDF will have less funds which will negatively affect EU-funded infrastructure projects, such as much needed road and rail construction. Sierra Leone also heavily relies on British aid. In 2014, Britain provided US$416 million in aid which was 6.8% of Sierra Leone’s economy. The potential reduction in Anglo-African trade will be bad news for the stabilization of many African economies, and will increase the likelihood of insecurity.

Brexit: a new dawn for Anglo-African relations

Taking aside the apocalyptic commentary Brexit produces, breaking away from the EU provides opportunities for a renewed trade and security relationship between the UK and Africa. Africa can find trade outside of the EU.

For example, Africa’s trade with the EU, which was estimated at US$116.6 billion in 2016, is heavily outweighed by Chinese trade, which was estimated to be US$300 billion in the same year. India has also become a larger trading partner, with 9% of sub-Saharan Africa’s exports going to India, and it is the fastest growing sub-Saharan Africa trade relationship. Even U.S. coffee roasters predicted to raise Kenyan coffee imports by 25%, after a prosperous trade fair in Seattle in April. Turkey also continues to build relations with Africa which are only likely to improve after the downturn on Turkish-EU relations from the Turkish Referendum. It does not seem unimaginable, therefore, that Britain can develop its relations with Africa once free from EU trade legislature.

In fact, relations already seem to be improving. Contrary to expectation, Britain raised its budget for its Department for International Development (DFID) to 0.7% of GDP, making it one of six major donors that meet or exceed the UN’s target for international aid spending. DFID’s “Invest Africa” programme — which seeks to link private sector investors, financiers and governments in African countries — aims to create 90,000 jobs by encouraging £400 million (US$519 million) of FDI before 2026.

In security, Britain also looks to improve its relationship with sub-Saharan Africa. The UK government raised £5.5 billion (US$7.1 billion) in 2016 which has been set aside for development aid. Much of the security focus, according to Tobias Ellwood, UK Minister for the Middle East and Africa, will be on the security issues faced in northern Nigeria, South Sudan and Somalia. The latter will be hosted by the UK during the Somalia Conference in London on 11 May, which aims to provide further dialogue for the security problems facing the newly elected Federal Government of Somalia.

Britain may even further the war against illegal wildlife trade, such as the ivory trade which has decimated African elephant populations and fuels organized crime. This is prevalent in Namibia, Zimbabwe, Botswana, Tanzania, Kenya, Zambia, among others. The United for Wildlife foundation, run by the Duke and Duchess of Cambridge and Prince Harry, has taken a strict stance against illegal poaching. The British royals have made many high profile visits and international speeches raising awareness of poaching. Royal visits are but one other method of improving relations.

Trade not aid

Brexit offers new opportunities for Britain to negotiate bilateral trade deals free of EU legislature and terms, governed instead by World Trade Organization (WTO) rules. The impacts from individual trade deals could be enormous for improving employment and security for many African countries.

It also provides a new opportunity for African countries to negotiate as equal trading partners. The long held “donor-recipient” relationship of aid will not improve employment and security issues in the long run, but trade and investment might.

The strongest solution to insecurity is a prospering economy. African countries, beginning with a new relationship with the UK, can negotiate new trade deals which will increase their international competitiveness and provide more jobs which can tackle high unemployment. With the G20 Summit approaching in July 2017, African countries have a good opportunity to begin new trade deals and forge new relationships with the UK, and other countries.

Now that the UK has begun its long and arduous process of leaving the EU, it has a great opportunity to reassess and forge new relationships with Africa. While Brexit negotiations will take no shorter than two years, the British government should begin to develop its relationship with African partners, encouraging British firms to work with African firms, and increasing the number of state visits. But for African economies to truly benefit, there must be equal relationships and a noticeable shift away from the “donor-recipient” relationship.

Thomas Gray