Keeping all personal preferences aside for a bit, it is fair to say the Brits have a right to their choices despite the drama accompanying the current events in the EU. As dust reluctantly settles on the British vote to leave the EU, financial markets get to terms with the new reality, Brexit seeks new leadership and European governments grapple with the socio-political implications of the vote, the question on a lay man’s mind at this juncture is; “What has this got to do with me?” Localizing or personalizing the fallout of this history-making decision by the United Kingdom might be an appropriate way to enhance understanding of this seemingly complex discourse in both local and international public spheres. Individuals may find it necessary to know and understand just the parts of this current event that affects them directly. Given that DCC is a Communication Consulting agency with very strong ties to Cameroon, we decided to have a brief chat with a Cameroonian-born German Financial Risk Manager, for an expert opinion on what (if any) effects Brexit will have on Cameroon. In other words, can Cameroon go to bed knowing she has more pressing ‘fish to fry’ like corruption and bad governance over Brexit ?
In his response, Dr. Azinwi Fet – a Manager at D-fine GmbH (an IT, Risk Management and Financial Consultancy with over 600 consultants across Europe) gave us the following explanations which I will say we can ‘take to the bank’ till UK or England gets a new leadership, talks between a new Brexit leadership and the EU is finalized, and the dust around current uncertainties actually settles.
In his words, “In order to aptly answer the question of how Brexit affects Cameroon, I think it is imperative for us to know what the European Union is and what an exit implies.
The European Union is a politico-economic union of 28 member states who have ratified a number of treaties providing guidelines for political and economic interaction between member states as well as their internal affairs. The choice to leave the EU will certainly affect Britain’s access to the single-market accorded by the EU to its member states which served to eliminate tariffs. A new EU/UK trade agreement may not overcome such tariffs and make access to the market difficult for both EU and UK exporters. The EU takes almost half of the UK’s exports and an unfavorable change in market conditions is bound to affect businesses as well as the UK economy. Beyond this, the UK also benefits from 53 trade deals negotiated by the EU. Meanwhile the UK may replicate these deals, setting them up will take time and definitely adversely impact UK businesses in the mean-time. Furthermore EU grants, employee mobility and a homogenous taxation regime (Common Consolidated Corporate Tax Base – CCCTB) are things which British businesses will miss upon exiting the EU. This will translate to a sluggish economy and jobs will be lost.
Financial markets have already reacted to the expected change in market climate, which is reflected in the weakening of the British pound. This on the other hand strengthens the British exports but will weaken their imports. Trade partners will certainly feel the pinch of the squeeze in the British economy.
For most African nations (except for South Africa) Britain however is not a major trade partner, and a potential slump in the British economy would have a marginal impact on these economies. Take Cameroon for example; trade with Britain accounts for roughly 4% of Cameroon’s exports, which is less than 1% of the country’s GDP. The major trade partners of the UK- USA, Germany, the EU will feel the effect of Brexit more. African countries should go through this relatively unscathed”.
I guess this tells Africa, especially Cameroon that, ‘ceteris paribus’, the country has more things to worry about than Brexit. However, given the global nature of current events of such magnitude from both socio-political and economic angles, head knowledge of the event might be worth having whether remotely or directly affected.