While a member of the European Union, Britain lagged some of its peers in terms of exports to Africa.
But the dynamics could change after Brexit, according to Tokunbo Afikuyomi, a former trade economist who worked in the United Kingdom.
“Before Brexit, the EU made agreements on behalf of the entire union, and the interest of the UK may not have been a priority for the EU at the time of making those negotiations,” he told CNN Business. “Now Britain can negotiate with more countries as they want.”
What does the UK have to offer Africa?
The UK government touted Africa’s potential as a trading partner during this month’s summit in London.
“We have much to offer African nations — UK aid is tackling climate change and supporting women entrepreneurs, our tech and digital expertise is helping Africa grow new industries and the city of London is channeling billions of private investment into Africa,” said Alok Sharma, Britain’s international development secretary.
A huge free trade zone taking shape in Africa could also benefit UK companies by expanding markets and making it easier to do business across borders.
“Some of the UK’s large aid budget could [support] the creation of the African Continental Free Trade Area … which would promote economic growth and offer more opportunities for UK exporters,” Sam Lowe, senior research fellow at the Centre for European Reform, wrote recently.
What’s in it for Africa?
They also bring money in the form of foreign direct investment.
“[Foreign direct investment] is a powerful tool for developing countries, especially countries like Nigeria where the government and central bank have been working towards attracting more investors,” said Afikuyomi.
African countries could also have better opportunities to raise revenue by exporting more of their services and goods to the United Kingdom.
Barriers to trade
Trade deals may help reduce tariffs and other barriers that have stymied trade between Britain and Africa.
“Some countries will be unable to export goods to the UK if the opportunity presents itself because they cannot meet the required standards for trade,” said Afikuyomi.
Unexpected and sudden changes in the value of currencies can also complicate trade in Africa, said Jones.
Competition in Africa
Other countries have been proactive investors in Africa in recent years.
Jones said more countries investing in Africa is a big win for all parties, including the United Kingdom.
“China has done lots of great things on the continent. On a macro level what they have done is incredibly useful for everyone. They have built infrastructure and funded airports,” he said.
“One of the great bottlenecks for many developing countries is the lack of infrastructure. So, the more infrastructure the better,” added Jones.
Source: CNN Africa