The history British referendum of June 23 of 2016 is regarded to be something that will have a plastic impact on not only the future of the United Kingdom but the whole world with it as well. Exactly four years ago, the people of the UK decided to vote in favor of leaving the European Union. After many years of working on a deal and two Prime Ministers, the country finally left the EU without a deal.
One of the places around the world that will see a huge impact of Brexit is going to be Africa. The region will try to use this situation to work on new reforms, especially the one regarding the visa requirements.
For Africans, the United Kingdom is the biggest migrant destination. Every year, thousands of people from Nigeria and all over the region, in general, go to the UK with the hopes of finding a better life there.
Africa has the ability to benefit from this situation because they can work on new rules and guidelines on migration. For many years, migration to the UK was a huge brain drain as people had to grow through many details and files, now, this can finally stop.
Also, local industries in Africa will finally have the ability to strive on their own. One of those fields that has a lot of ways for development now is the Forex trading market. Although there are not so many well-developed local FX brokers in the region, soon, it might not be the case anymore. If the region manages to do so, local investors in Africa will not have to register with UK Forex brokers anymore, but rather trade with the local companies.
This can be a huge relief for local Forex traders in Africa since they will not have to pay huge amounts of fees on payments and transactions. Also, if more Forex brokers are established in the region, the market will have the chance to develop significantly in the future.
Effect of Brexit on African Commonwealth
The news, in the beginning, was very shocking for investors in the region, especially those from countries like Angola, Nigeria, South Africa, and others.
Brexit will have a huge impact on trade and investment in Africa, especially in Commonwealth countries. Most of the trade arrangements that the UK has with African countries were made with the help of the EU, now, things will be changed a lot.
Now, the UK will have to renegotiate these agreements, or just simply come up with new agreements altogether. However, some experts are also saying that these countries can also see some positive developments.
Despite the fact that many people were afraid that the African economy would end up losing a lot, it might give some of the African countries to survive the sanctions that they are facing today. With the help of Brexit, the EU might even go as far as reviewing these sanctions, and maybe even rethink the decisions made when the UK was part of the European Union.
Also, Africa will now have the ability to seek assistance somewhere else.
However, the thing that should be remembered is that Africa is not a single country, and it is very hard to talk about the impact of Brexit on the whole region. Africa consists of 56 countries, and the influence of Brexit might be a little different for African countries.
What about aid?
According to the decision made by the leadership of the UK, 0.7 percent of the Gross National Income, GNI, is used as the development aid. A huge part of this money goes to the development of African nations. This might change a lot as a result of Brexit. The way it will change is not known yet, it will depend on the leadership of the UK only.
So, there are several ways all of this can develop. First of all, if Brexit causes a recession, the UK’s GNI will fall, which will lead to a decrease in foreign aid. This will have a huge impact on African countries. However, if the GNI of the country will increase, it will all end up creating a more enjoyable situation for African countries.
What will happen in the future?
At this point, it is very hard to say what will happen in the future. In general, things can go in two different directions. If the UK manages to be successful on its own and it does not cancel the aid for the African countries, the region might get a lot from this situation. On the other hand, the UK might decide to cancel the aid altogether, creating a very challenging situation for the region.
In the end, it is very hard to say what the future will look like, as of now, the region is going through a lot, and any type of aid that people get from this situation is very important for Africa. But, it is not only Africa that is going to be affected by Brexit in the long run. Countries around the world will have to adapt to the changes and come up with new ways to work with the UK.