As the world awaits next week’s referendum on Britain’s membership of the European Union, the debate is fully on about the political, economic, immigration and diplomatic impact of British exit from the EU. In a worst case scenario, the Gross Domestic Product (GDP) of the United Kingdom would shrink by 2.2 per cent by 2030 if the country leaves the EU on January 1, 2018, according to Open Europe, an independent think-tank that has done an economic modelling of the trade impacts of “Brexit”, the portmanteau word for British exit.
But a “Yes” vote on June 23 has far-reaching implications than a reduction in the size of the economy. For one, as the world’s fifth largest economy, there is a risk of a contagion effect beyond the borders of the island nation. The impetus for the politics of nationalism within the UK and the EU would also increase, fostering anti-immigration around the world.
While the UK would be placed in the difficult position of renegotiating its economic relations with other EU countries, its economic ties with non-EU countries like Nigeria would remain unchanged. The theoretical argument is that trade agreements between EU countries and non-EU countries are negotiated by the European Commission, albeit on behalf of EU member states. In reality, investment in Britain would be less attractive to foreign investors since the country would no longer offer full access to the lucrative EU market.
deficit posted in Q1 2015. According to the World Bank, exports of goods and services as a percentage of UK’s GDP is 28.4 per cent. This shows the importance of trade to the UK economy. The increase in trade deficit may not be unconnected to uncertainty due to a potential vote to leave the EU. The country’s GDP growth rate also slowed to 0.4 per cent in Q1 of 2016.
As a member of the British Commonwealth, Nigeria has strong ties with Britain. After South Africa, Nigeria is Britain’s second largest trading partner in Africa, with £6 billion (about N2.4 trillion or $8.52 billion) in bilateral trade volume last year. As of December 2014, the UK Department for International Development had a portfolio of 40 projects in Nigeria with a planned budget of £232 million for 2014/2015, which include grants to non-profits, technical assistance and partnerships with other development agencies. A weaker and smaller UK economy would scale back its investment in development projects in Nigeria, even if temporarily.
To a large extent, the conception of regional economic blocs in Africa has been predicated on the success of the European Union. To further the agenda to facilitate free movement of persons, goods and services around the continent, the African Union has announced the commencement of the e-passport for Africa. However, all the argument about the benefits of deepening integration and socio-economic development through economic blocs in Africa would be punctured in the event of Brexit.
Ahead of the referendum, a YouGov/The Times poll result released on Monday, June 13, showed the “Leave” campaign with a 7-point lead over “Remain”. The “Leave” campaign is largely being driven by politically far-right groups and rising anti-immigration sentiments that have gained momentum in the wake of the Syrian refugee crisis. Some citizens believe that immigrants have caused social and economic problems in the UK. The Migration Observatory at the University of Oxford, England, says the proportion of foreign-born population in the UK increased from 7 per cent in 1993 to 13.1 per cent in 2014. A Yes vote would lead to the enforcement of tougher immigration policies that would affect Nigerians travelling to the UK and the estimated over 2 million Nigerian migrants in the country.
For Britain, including those who are misguided by rising nationalism, the political backlash of a Brexit must only be left imagined. To have a Brexit, the unification of the United Kingdom of Great Britain and Northern Ireland would effectively be a toss-up. Nationalism sentiments in Scotland would resurge. By 2030, the consequences of an independent Scotland would be far beyond a probable 2.2 per cent reduction in the economic size of Britain. Indeed, it would further threaten the treaty that still binds Northern Ireland to the monarchy.
This foreboding scenario could have a strong influence on secessionist sentiments in Nigeria. Should Britain, which cobbled Nigeria together begin to unravel in its own union, agitators for independence for some of Nigerian ethnic groups would find the bad example worthy of emulation. In the final analysis, like Britain, the toll of brexit on Nigeria would be less severe on the economic front; its deeper implications would be political.
Brexist On UK Visa From Nigeria
Gross Domestic Product
1. The Gross Domestic Product (GDP) of the United Kingdom would shrink over time and a weaker and smaller UK economy would scale back its investment in development projects in Nigeria.
Immigration and Visa application
2. It would foster anti-immigration around the world, and this will affect Nigeria who have a large population of its citizens in diaspora. It is expected that Britain will be very strict on visa applications especially from countries like Nigeria which has a large visa applicants to the United Kingdom.
3. Investment in Britain by Nigerian businessmen would be less attractive since the country would no longer offer full access to the lucrative EU market. Trade agreements between EU countries and non-EU countries are negotiated by the European Commission.
Integration and economic development
4. The benefits of deepening integration and socio-economic development through economic blocs in Africa especially Nigeria would be punctured due to Brexit.
Tough immigration policies Due To Brexist
5. Brexit will bring about enforcement of tougher immigration policies that would affect Nigerians travelling to the UK and the estimated over 2 million Nigerian migrants in the country.
May fuel secessionist sentiments
6. It will have a strong influence on secessionist sentiments in Nigeria as the unification of the United Kingdom will be affected, as some regional agitators in Nigeria would find the example worth emulating.
Nigeria internal politics
7. The toll of Brexit on Nigeria would have deeper implications on Nigeria’s politics because it is a signal that political unions can no longer be seen as self-perpetuating
Effects Of Brexit On Economy Generally According To Gz.com
Economic experts, Quartz Africa, have predicted a very hard future for Africa’s top giants who include Nigeria, South Africa and Kenya. In their new report, they stated that the effects of the UK’s votes could cripple the economies of these continental giants.
See the report below:
Now that the United Kingdom has voted to leave the European Union, African economies—already struggling from slowing demand from China and flat commodity prices—have now been thrown into confusion along with the rest of the world.
“Many emerging market and frontier asset markets will come under pressure,” Razia Khan, chief economist for Africa for Standard Chartered Bank, tells Quartz. “Much will depend on how quickly some sort of financial market stability can be restored.”The UK’s minister for Africa and advocate for leaving, James Duddridge, has promised that relations with the continent would only improve without the burden of the EU, but Africa’s largest economies are still likely to suffer.
Nigeria: bad timing
Britain’s exit from the EU couldn’t have come at a worst time for Nigeria, Africa’s largest economy. At a time when the government is trying to fix an economy on the brink of a recession by removing strict currency controls and also liberalizing oil prices, the immediate effect of Brexit will test the nerves of Nigeria’s economic managers as global markets plummet.
Bilateral trade between Nigeria and the UK, currently valued at £6 billion(about $8.3 billion) and projected to reach £20 billion by 2020, will be disrupted as trade agreements made under the auspices of the EU have to be renegotiated.
“For Nigeria, global risk aversion as well as a softer oil price is likely to mean that new portfolio inflows are slow to materialize,” says Khan. “This may delay the normal functioning of the newly liberalized FX market.
”Data from the National Bureau of Statistics shows that the UK was Nigeria’s largest source of foreign investment in 2015.A slowing British economy and its reverberating effects could signal a drop in investment, trade, and also remittances from the Nigerian diaspora who sent home $21 billion in 2015.Reduced trade and investment from Britain willnot necessarily be plugged by the rest of the EU, say Lagos-based economist Tunji Andrews.
“The EU will be looking to strengthen it’s internal ties, plus there’s cheaper oil from Iran, cheaper labor from China and the eastern block.
There’s really nothing we have as a competitive advantage to them right now.”Brexit is already fueling other independence campaigns. Within hours of the vote, leaders in France and Holland, Italy and Denmark called for their own referendums on leaving the EU. This sentiment is shared in southeast Nigeria as well, where government forces have spent much of the past year quelling violent protests by activists advocating for the secession and establishment of an independent country called Biafra. Having already called for a referendum earlier in the year, pro-Biafra activists may now be further emboldened.