Brexit: a watershed moment for UK trade with Africa?
Jonathan Brufal, partner at the international law firm, Gowling WLG discusses the impact of Brexit for UK and Africa trading.
Last week, I attended the UK Africa Summit in London, in my capacity as a professional services provider, and was able to witness first-hand the renewed attitude of this government towards renewing or commencing trading links with African nations – a notion which seems to sit well with the post- EU membership climate into which this country enters/ has entered (depending on whether this appears pre or post Jan 31st).
And so it should – the proportion of trade between Africa as a whole and the UK makes for startling reading, with our place falling nine places behind the EU, when imports to Africa are considered (2018 International Trade Centre). Having said this, the involvement of key UK sector and service providers throughout the continent – such as those within tech, telecoms and professional services – has been considerable for some time now. However, there are a raft of other sector focused firms in the UK, covering manufacturing, real estate and infrastructure, for example, that are yet to make their name in Africa. The onus is, therefore, now on the government to provide the necessary regulatory and financial support to help facilitate a wider mandate for trade.
The government has clearly committed to this, with 2019 seeing the introduction of a new Commission to 'turbo-charge' quality infrastructure projects in developing countries throughout Africa. According to their press material, 600 million Africans do not have access to electricity, hence the Commission's efforts to facilitate private sector support to build more sustainable and resilient cities and improve access to clean energy and water. However, IT is essential that this is not the only focus or initiative that ensues after Brexit and of course, that they follow through on implementing their objectives.
Aside from the introduction of specific trading arrangements and initiatives, it is essential that more practical day-to-day barriers are addressed – for example, the need for international businesses to be paid in dollars is an issue for many governments and regional companies. However, by providing the endorsement and support needed to strengthen local finance facilities, the government, in conjunction with the international finance community, can help genuinely open up these markets for business, via a robust regulatory framework.
A further, more business-led consideration is the need for project and international business successes that UK organisations have been involved with, to be better publicised and shared with the UK market, in order to create a landscape of desire and direction where considering new trading partners is concerned. This is an avenue that the government should consider as we move into this brave new world of life outside the EU - and the role that they need to play in facilitating interest in African trade amongst UK firms in the most needed sector and service based areas for the continent will only intensify.
For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.
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