Financial disruption associated with Brexit looms over Africa and may result in negative pressure on regional integration and EU-Africa trade, warn African business leaders.
Speakers on the sidelines of the Annual General Meeting of the Cairo-based Afreximbank in Kigali, argued that African economies need to develop strategies for coping with the uncertainties and harness the opportunities that may come with the United Kingdom’s exit from the European Union.
Business leaders emphasised the need to improve negotiating skills, social and physical infrastructure, knowledge and technological capacity if the continent is to continue attracting more investors.
“For Africa to make good use of this trade and aid relationships, countries have to make plans, mobilise internal resources and develop stronger agendas.
But skills are much more important for investors won’t come here if they see weak manpower,” argued Osita Ogbu, a professor of economics and a director at the University of Nigeria.
Prof Ogbu pointed to the need to improve the negotiating skills of African leaders and delegates who spend most of their time in the corridors of the World Trade Organisation (WTO) but fail to win any tangible benefits for their countries.
“I have seen people when going to negotiate, they use people from ministries of trade and industry while leaving behind the best negotiators - mostly the traders themselves, lawyers and academics.
“Negotiations without due diligence or a background check won’t lead you anywhere. We need to consolidate and negotiate as Africans, because it is easy to negotiate as one in external relationships,” he said.
Bankers said there was a need to prepare for the possible opportunities from Brexit.
Bank of Kigali chief executive Diane Karusisi said Africa should not be worried about Brexit that is yet to pass but should focus more on the opportunities within Africa because a strong internal market can be an adequate counterforce to the risks of Afro-EU trade.
“Disruption is no longer an exception, it has become a norm and we have to get used to it. We also have to seize the opportunity that will come with it.
“The ongoing African Union Reforms, spearheaded by President Paul Kagame will be a good test for the post-Brexit period since we shall to identify ourselves as Africans against such external shocks,” she said.
According to her, Africans will need to be more proactive than Europeans who have already started looking into how UK’s exit can make their economy more robust by promoting some of their home grown trade initiatives.
Officials from the UK equally believe that Brexit will not have a heavy impact on Africa trade since the country will have a larger degree of independence to engage Africa on its own.
A senior officer at the Department for International Development (DFID) James Wharton said the UK trade windows may widen further for African countries.
“There are opportunities for Brexit, same as challenges. It’s up to the African traders to identify the things that matter to them as Africans before the exit comes into effect,” he said.
Statistics from the European Union Trade Commission indicate that Africa’s share of EU trade in 2016 was 7.6 per cent equivalent to 261 billion euros.
On the other hand, Africa remains the major supplier of mineral-fuel imports to the EU with total energy product imports (mainly crude oil) amounting to 91.5 billion euros in 2014.
This made up around 59 per cent of total EU imports from Africa that year with a trade deficit of less than one per cent in 2014, down from five per cent in 2013 and 11 per cent in 2012.