The UK’s exit from the EU could be an opportunity for African countries. Britain is repositioning itself, and the power dynamics in Brussels are changing. Can African governments leverage the changes to their advantage?
There’s a new player on the world stage. Alright, let’s rephrase that. An old player is trying to redefine itself – the United Kingdom. On January 31, Britain officially leaves the European Union. And the UK has no qualms showing that it’s focusing on its future outside the bloc.
British Prime Minister Boris Johnson skipped this year’s World Economic Forum in Davos to focus on Brexit. During that week, he hosted more than a dozen African heads of state at the UK-Africa Investment Summit in London. Deals worth nearly $8 billion (€7.3 billion) were announced. The message was, Britain is ready to do business with Africa.
“Britain has to find new partners that they can work with in the long run to build their economy,” says Mark-Anthony Johnson, the CEO of JIC Holdings.
“Africa of course, with its huge potential, will make the ideal partner,” adds the investor, who was also involved in organizing the summit.
The UK wants to be the continent’s “investment partner of choice,” but it has quite a bit of catching up to do.
The City of London is one bright spot. With 112 African companies with a market capitalization of around $166 billion listed on the London Stock Exchange, it is the most important center for Africa’s businesses outside the continent. And the British capital wants to increase its links with African stock exchanges going forward.
Vying for a bigger seat at the table
The UK is one of the world’s largest economies, and the EU’s second biggest, after Germany, according to data from Statista. Its exit from the bloc creates a new partner for Africa. However, as the main recipients of EU official development assistance, African countries could potentially feel the impact of Brexit on the EU budget, if there’s less money as a result. Whatever the case, the UK’s departure has implications for the power dynamics in Brussels.
“The other big players, Germany and France, will be making a push and have been pushing to have their voices within the EU more heard on African issues,” says Uzoamaka Madu, a consultant specializing in EU-Africa relations.
She points to French President Emmanuel Macron as an example. He’s reshaping relations with African countries. In December, he said the CFA franc, would be scrapped — France is is loosening influence on the currency of many of its former colonies. Macron also called colonialism a “grave mistake.”
France knows it has “an opportunity or a threat at the EU table” because it could increase or lose their influence on African issues, says Annie Mutamba, a Brussels-based expert on EU-Africa relations. She believes Germany, Italy and Scandinavian countries are also keen to fill the gap left by the UK.
During a speech in Davos, German Chancellor Angela Merkel called for a summit with African countries at which an agenda could be discussed. And earlier in the month, her country’s development minister, Gerd Müller, said Berlin wanted to work on a new EU pact with Africa when Germany assumed presidency of the Council of the European Union in the second half of 2020.
“It’s going to be interesting to see if we have a French flavor or not,” Mutamba says.
EU, Africa to rewrite partnership rules
French flavor or German gestalt, Brussels will be resetting its relationship with Africa after Brexit. The EU and the Africa, Caribbean and Pacific Group of States (ACP) are negotiating a new partnership deal. The Cotonou Agreement, which provides a framework of rules between the bloc and the ACP’s 79 member states, expires in February.
While the future EU-ACP agreement is pending, the discussion in Brussels is whether African countries will work through the ACP or the African Union (AU), says Annie Mutamba. The AU is increasingly becoming a global player, especially with the creation of the African Continental Free Trade Area (AfCFTA), which the EU has also been supporting.
“[The EU is] clearly funding activities to promote continental integration because what they want is to have a continent-to-continent partnership,” says Mutamba.
And this can be achieved with Africa’s free trade area.
“Coming together under the AfCFTA is going to push African leaders to come to a common position on a lot of really important economic issues,” Madu explains.
Trading is slated to take effect on July 1 in countries where it has been ratified. But some experts expect it to take years for the world’s largest free trade area to become fully operational.
More African presence needed
For now, it’s still every government for itself, especially for trade and development issues. Unfortunately, many African countries continue to face some challenges that prevent them from being able to have a major influence on the EU’s Africa strategy.
“One of the main stumbling blocks is access to decision-makers here in Europe, not only in Brussels, but elsewhere, in other capitals,” Mutamba explains.
She believes the African governments need to be more present in Berlin, Paris and other capitals in countries that play a bigger role in shaping the EU’s Africa strategy. In Brussels, they have to compete to get their voices heard.
“It’s actually the NGOs that are driving African interests […] within the context of EU policy,” says Uzoamaka Madu.
“Those are the voices that you hear more loudly and are at the forefront of budgetary discussions,” she adds.
In London, it’s “a mixed bag,” and it mainly depends on the topic, according to Johnson.
“The NGOs are very influential in terms of the information,” he says. “They spend a lot of money collecting data.”
Of course, not every African government is underrepresented. Johnson also points to Ghana and Rwanda as two countries that are helping set the agenda when it comes to working with their European partners.
Another playing field?
Rwanda is set to become the first Commonwealth country that isn’t a former British colony to host the group’s heads of state summit in Kigali in June.
“The UK is trying to revive the Commonwealth now post-Brexit and with the idea of a Global Britain,” says EU-Africa affairs consultant Uzuamaka Madu, noting that its relevance has diminished.
It will be interesting to see how and if the UK uses the Commonwealth to improve its relations. While several deals were announced at the inaugural UK-Africa Investment Summit, critics were not convinced.
“There’s still not yet enough meat to really call it something that’s a strategy […] focused on delivering something focused,” says Madu.
But the fact that the UK is acting alone could work to its advantage. Whereas the EU’s Africa strategy may include compromises between its member states, that won’t be the case for the UK. The current government’s majority also clearly gives it the parliamentary votes to set the tone. And despite some of the negative post-Brexit forecasts for the British economy, investor Mark-Anthony Johnson is optimistic about the prospects for African countries.
“UK companies will continue irrespective [of the economy] because they are looking to expand and they are looking for new markets, irrespective of what happens to the economy,” he says.