How will the UK’s impending exit from the EU impact Sub-Saharan Africa and the Caribbean? In both cases, the dominant narrative revolves around the knock-on effects from an almost inevitable growth slowdown in both the UK and EU which will press on trade, tourism and investment flows.
Over the medium-term, currencies and equity markets from South Africa to Trinidad have come under pressure.
There are also worries that both European parties will be pre-occupied with negotiating trade agreements with each other, and, in a commercial sense, more important players such as the US, India and China – thus pushing SSA and the Caribbean to the very back of the line. As any practitioner can attest, limbo is an uncomfortable posture for all but the briefest of moments.
UK aid flows to both regions should be added to the list. The Cameron government has hit its pledge to meet the UN target of granting 0.7% of the UK’s Gross National Income in overseas disbursements to promote development. This equated to a little over £12bn last year, and outweighed the contributions of all other G7 nations with the exception of the US which gave around £20bn.
According to the latest figures, Ethiopia was the largest recipient (£322m) in 2014, followed by India (£279m), Pakistan (£266m), Sierra Leone (£238m) and Nigeria (£237m). Within the Caribbean, Monserrat (£31m), Jamaica (£12m) and Haiti (£10m) topped the list.
The Brexit wing of the ruling Conservative party, which is likely to be the source of the next Prime Minister, has long railed against these outlays, alongside the UK’s net EU contribution of £8.5bn, as a colossal waste of taxpayer money which could be better spent at home.
It’s hard to believe that only Brussels needs to embark on re-evaluating its balance sheet.
TNT Global Connect