Post-Brexit Africa

The former mayor of London changed his mind after a betrayal by Michael Gove, the justice secretary who was to be his campaign manager. In turn, Gove declared his willingness to lead Britain – after repeated denials of having such aspirations to higher office.

To add to uncertainty, the UK suffers from a unique democracy deficit. The UK referendum demonstrated that most Britons (52%) are currently for a Brexit, and yet most members of the UK parliament (about 70%) favor pro-EU views. So the question is, will the UK follow the views of its citizens or its MPs.

As I predicted prior to the referendum, the UK referendum will foster substantial economic uncertainty, market volatility and political risk. In turn, these could still lead London and Brussels back to a negotiating deal; a still another referendum; a different deal; or an eventual Brexit. Despite the referendum outcome, all options are still viable – although uncertainty, volatility and risk will remain elevated.

If the – actual or potential – Brexit will not undermine the EU, further integration is likely to occur in a more rigid and protectionist bloc dominated by the policies of Europe’s core economies, particularly Germany and to a lesser degree France. In the medium-term, much depends on how London will rebuild its global engagement. It could retain its membership of the European Economic Area (EEA), like Norway. Or it could opt for a negotiated bilateral agreement, such as that between the EU and Switzerland, Turkey and Canada. Or it could choose World Trade Organization (WTO) membership without specific agreement with the EU, like Russia or Brazil.

Following the recent EU Summit, the UK parliament must also rule on the new petition that considers the referendum outcome non-binding. As Slovakia took charge of the EU presidency on July 1, it must deal with the Brexit issue. For now, the defining moment must ensue by the UK Conservative Party conference in early October when a new prime minister should trigger the Article 50 process – which, in turn, would result in months of divorce talks.

Whether the trigger will be deployed in a quarter of a year, or sooner – or not at all – the worst has already happened. Brussels can no longer wish away the Brexit uncertainty, volatility and risk – which will have mainly negative effects in Africa.

1 2 3 4
View single page >> |

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Bill Griss 4 years ago Member's comment

I disagree Dan.