United Kingdom citizens yesterday voted to leave the European Union (EU) after 43 years in a historical referendum. This is an outcome pundits say would throw up all sorts of implications, mainly centered on trade in Africa.
In this case Malawi, which exports most of her sugar, tea and coffee to UK markets, will also likely to be impacted in one way or the other. Then there are economic benefits which Malawi enjoys from Britain, its strongest donor.
If you think Brexit vote is UK’s problem, then think again. The impact of the Brexit vote was felt across the globe Thursday night. Markets surged when the Stay camp led and markets fell flat yesterday morning when the Leave camp led. And finally, when Leave won by 52 percent to 48 percent, there was utter shock.
In Europe, America, Asia and Africa economists had to deal with the reality of the UK being out of EU. What happens next is possibly the most frequently asked question today.
“Do not get worried, there is little or no implications on Malawi,” said Ben Kalua, professor of economics at University of Malawi’s Chancellor College, when this question was put to him yesterday.
“Africa in general has very little to worry about, because we have separate trade links with the EU and the UK. The Brexit vote, therefore, has no significant bearing on trade relations.
“If you look closely, Malawi and other African nations under the Africa-Caribbean Pacific countries (ACP) have a separate deal with EU and for a long time we have been dealing separately with the UK, even travel arrangements have been quite different… the Schengen visa for EU and a separate visa for Britain,” he explained.
As Kalua was dismissing the impact of Brexit on Malawi and African economies, the British pound sunk by 10 percent for the first time since 1985 and major stock markets such as the UK’s-London Stock Exchange (NSE) was down eight percent while Asian markets all responded negatively to the Leave vote.
The FTSE 100 also dipped eight percent while major bank’s stocks went down even on South Africa’s JSE Exchange.
This is the more reason Malawi better watch out says Geneva-based social-economic commentator Stanley Kenani.
He believes the vote will have a huge impact on Malawi as EU’s stock markets respond to Brexit as this might set off a domino effect across the world.
“It is sad that at a time when countries are gravitating towards the formation of a global village, Britain is choosing isolationism.
“I imagined that it would always be easier for the African Union (AU) to negotiate trade agreements with the European Union as a block, rather than with Britain and Europe as separate entities,” he says.
He points out that with this isolationism, it is even going to be a lot harder for Malawians to enter the UK.
“More importantly, this vote will affect the economic muscle of the European Union. Already stock markets are crumbling, and that might set off a domino a global recession. effect across the world, leading to
He, however, said at the end of it is all about democracy and the will of the British people should be respected.
His sentiments are shared by Minister of Foreign Affairs and International Cooperation Francis Kasaila who yesterday said Malawi must respect UK’s decision.
“As a government we respect the decision of the British [people] and wish them well,” he said.
But Norwegian High Commissioner to Malawi, Ambassador Kikkan Haugen could not hide his disappointment in the outcome of the vote.
On his part Germany, ambassador to Malawi Peter Woeste said he regrets the decision by UK citizens to leave the EU. He was quick to say though that he respects British people’s decision.
“EU is greatest achievement over 70 years and said Germany will remain close to more than ever to the union,” Woeste told Weekend Nation yesterday.
While the EU in Malawi was mum on what happens next, their Press and Political Officer James Dolan did send us a statement from Donald Tusk president of the European Council who said the EU is aware of how serious, or even dramatic, this moment is politically.
“There’s no hiding the fact that we wanted a different outcome of yesterday’s [Thursday’s] referendum. I am fully aware of how serious, or even dramatic, this moment is politically. And there’s no way of predicting all the political consequences of this event, especially for the UK,” Tusk said.