Theresa May has announced plans to boost Britain’s investment in Africa after Brexit, during her first trip to the continent as prime minister. The UK is looking to secure all its trade partners in the event of a no-deal Brexit. It was on June 23rd, 2016, when Britain narrowly voted to leave the European Union stunning Europe and the…
Theresa May has announced plans to boost Britain’s investment in Africa after Brexit, during her first trip to the continent as prime minister.
The UK is looking to secure all its trade partners in the event of a no-deal Brexit.
Background
It was on June 23rd, 2016, when Britain narrowly voted to leave the European Union stunning Europe and the world in general. The EU employs a set of policies for its 28-member states that aims to ensure the free movement of people, goods and trade among other services. Britain is deeply intertwined with the workings of EU especially in regard to trade. Leaders of member nations have expressed their dismay over Britain leaving the body over the past year. German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte are among those who have been vocal about their apprehension to the unfolding events.
In December 2017, UK Prime Minister Theresa May struck a last-minute deal with the EU regarding key issues. According to this deal, there will be no “hard border” in Ireland. The rights of EU citizens in the UK and the rights of UK citizens living elsewhere in the EU would also be protected in accordance to the deal.
The UK has been reaching out to its bilateral trade partners in order to secure crucial agreements. This is largely seen as a way of softening the blow in the event of a “Hard-Brexit” or a Brexit without an agreement which gives the UK access to the EU common market.
According to Chancellor Phillip Hammond, the threat of a no-deal Brexit still exists, and it could damage the British Economy.
Analysis
Arriving in South Africa on Tuesday morning, Mrs May said she wanted the UK to overtake the US to become the G7’s biggest investor in Africa by 2022.
In a speech in Cape Town, PM Theresa May pledged £4bn in support for African economies, to create jobs for young people. She also pledged a “fundamental shift” in aid spending to focus on long-term economic and security challenges rather than short-term poverty reduction.
Talking to journalists on board RAF Voyager on Tuesday morning, Mrs May reiterated that she believed a no-deal Brexit was still better than a bad deal – adding no-deal “wouldn’t be the end of the world”.
She promised to continue existing economic links based on the UK’s EU membership – including an EU-wide partnership with the Southern African Customs Union and Mozambique – after Brexit next year.
Promising an extra £4bn in direct UK government investment – which she expects to be matched by the private sector – she said while the UK could not match the “economic might” of some foreign investors – such as China or the US – it offered long-term opportunities of the “highest quality and breadth”. Read more on China’s growing influence in Africa here.
However, she said she was “unashamed” that it had to work in the UK’s own interest and pledged a new approach in future, focusing on helping British private sector companies invest in fast-growing countries like Cote D’Ivoire and Senegal while “bolstering states under threat” from Islamist extremism such as Chad, Mali and Niger.
“True partnerships are not about one party doing unto another, but states, governments, businesses and individuals working together in a responsible way to achieve common goals,” she said.
The UK’s overseas aid budget totalled £13.9bn in 2017, an increase of £555m in 2016. UK’s direct investment in Africa was £42.7bn in 2016, compared with £44.3bn from the US, £38bn from France and £31bn from China, according to data from the United Nations Conference on Trade and Development.
On her way to South Africa, the prime minister played down warnings from the chancellor about the economic damage of a no-deal Brexit. She will also visit Nigeria and Kenya during the three-day trade mission.
Assessment
Our assessment is that the UK is preparing for any eventuality in trade post-Brexit and therefore find it prudent to reach out to its trading partners across the globe. We feel that PM May’s visit is fuelled by a growing uncertainty about the UK’s negotiations and a general perception of a hard Brexit. However, we also feel that the UK would like to step up its investment in Africa as a way to retain its colonial influence in the continent, which is currently being dominated by the Chinese and Americans.
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