• Thursday, June 20, 2024
businessday logo


From ruins of Brexit to consultative integration


Britain’s vote to leave the European Union (EU) has understandably caused consternation worldwide, in Nigeria and Africa broadly. Questions are being asked regarding the likely impact of Brexit on Nigeria-UK relations and whether African states should curtail economic integration plans. The British vote exposed flaws in Europe’s integration, so these questions merit a dispassionate assessment with clear answers that can point the way forward for Nigeria and Africa.

To assuage doubts over closer African integration post-Brexit, it is vital to reflect on the nuances of the EU project and how its downsides can be avoided. The real tragedy of the Brexit referendum is of relevance here: complex questions such as the EU’s contributions to the most peaceful phase of European history, and how well the EU has served British interests, were ultimately reduced to a simple ‘yes’ or ‘no’ vote.

A more dispassionate analysis points to ample evidence of EU successes worthy of being emulated by Africa. Just as well, the EU’s more controversial aspects present lessons that can guide budding African initiatives, including the ambitious tripartite free trade area (FTA) planned to integrate eastern and southern African countries within the SADC, EAC and COMESA blocs. On opening borders, facilitating free movement of business people (not permanent immigration) and liberalizing trade across its 29 member states, the EU acquitted itself well. It helped Europe to expand prosperity in a way that Africa ought to replicate practically and more concertedly. Pursuing this as corrective to Africa’s largely haphazard borders will boost trade, cooperation and catalyse development.

In terms of functional and supranational undertakings, Europe provides a credible template for policy alignment in health, the environment, hygiene and other areas such as efficient energy pools. These merit domestication into the African context and present a forward-looking example for Africa. Similarly, closer engagement in science and technology has spurred successful European projects such as the Airbus, assembled with component manufactured in diverse countries from the UK, through France, to Spain, Germany and Italy.

However, in terms of fiscal and monetary union, serious contemplation and caution may be in order. The euro currency, adopted by the Eurozone states since 1999, has proved to be a strait jacket for some of the adopting countries. Precisely when Portugal, Italy, Greece, Spain, Ireland and Cyprus needed monetary policy agility and other spaces to escape their debt-induced economic crisis, lack of autonomous control over the shared euro currency exposed serious design flaws in Europe’s monetary union. Notably, Africa has its own example of monetary union in francophone west and central Africa, which is arguably more successful and narrower in scope than the grand euro project.

The one particularly controversial aspect of the Brexit debate focuses on immigration and labour mobility. This needs thoughtful regulation to avoid the backlash that may come from poor consultation and management of concern among ordinary citizens. Workers in Britain, Spain and elsewhere resented what appeared to be a runaway influx of migrant workers into their labour markets as the EU extended membership to a number of former Soviet-controlled eastern European states. Even as successful open economies like Britain’s celebrate the gains of globalization, loud grassroots protestation on migrant labour’s more adverse impacts on local communities was left to fester. The blame for this collision between local job security and EU-wide labour mobility partly lies at the doorsteps of EU leaders. With poorly managed immigration left to strain local communities and resources, a backlash like Brexit was long in the offing.

Moreover, the top-down elitist approach that has characterized European integration will ill-serve Africa. Brexit presents an opportune moment for architects of Africa’s regional integration to reassess. Africa must avoid the EU’s missteps and build cooperation projects with not only place people and social rights at its heart, but also prioritise substantive popular consultation whilst eschewing the temptation to impose on citizens. Failing this, Africa’s regionalization push will neither stand the test of time nor pass the test of popular legitimacy.

Another dimension of the elitist tendency that haemorrhaged support for the EU is the disconnect between elite bureaucrats in Brussels and ordinary European citizens without jobs or hope in places like Greece and Spain. This Mediterranean fringe of the EU has borne the brunt of the EU’s collective economic failures, even as institutions like the European Parliament failed to respond decisively, whilst continually seeking more power and control against the will of national electorates. To be sure, the EU (and the West’s) mismanagement is widely blamed for transforming the US sub-prime mortgage crisis into the sovereign debt crises that severely undermined Club Med economies as privately held debt stocks were transferred to sovereigns.

Closer to home, Africans worry about the likely impact of Brexit on African economies, and Nigerians also pose questions on how the referendum fallout may reshape Nigeria-UK relations. In truth, political relations will likely remain on an even keel, though more visible impact is to be expected in the UK’s diminished economic attractiveness both in the short term (owing to the expectation of prolonged negotiations to define the terms of the UK’s divorce from the EU) and the longer-term (as Britain’s resetting internal political relations and external economic agreements may take even longer to work out). Both will compound British and foreign business decisions. Britain itself potentially confronts the inconvenience of re-establishing UK diplomatic posts such as at the African Union headquarters and other locations where collective EU representation had been hitherto possible through the European External Action Services (the EU’s equivalent of a foreign ministry).

For Nigerian investors and businesses, much like their peers from around the world, we may see a shift away from the view of London as gateway to the EU. With foreign businesses contemplating alternative locations for headquarters or hub operations, and the waning appetite among high net worth individuals (including Nigerians) who previously paid a premium for London real estates, UK property price growth is likely to slow. Broader economic uncertainty could also take hold. Paradoxically, this may attract less speculative, longer-term property investors attracted by lower prices. Put simply, London outside the EU is unlikely to be as attractive a gateway unless the UK magically manages to preserve much of the privileged access to the Common Market that its erstwhile EU membership conferred.

Doubtless, the effect of Brexit will be felt at a personal level for many Britons and UK permanent residents. This author’s own story leads to the inexorable conclusion that Brexit represents a setback for Europe-wide cosmopolitanism.  The future mobility of British professional classes in Europe will be uncertain. After residing in the UK for nearly 15 years, acquiring British citizenship very early on his sojourn, this author went on to live in Madrid as part of the sizeable UK contingent resident in Spain. Many Nigerian-British professional and Nigerian permanent residents in the UK who have grown accustomed to crisscrossing European borders freely may confront a steep adjustment phase with respect to mobility. With the Brexit outcome heavily premised on the presumed out-of-control EU and non-EU immigration to the Britain, it is unlikely that a post-Brexit government will open the country to new workers from the EU. In return, EU states will likely reciprocate with their own restrictions on British expats. Nevertheless, the extent of such tit-for-tat restrictions remains unclear since the formal process of severing the UK from the EU will only commence after David Cameron, the British prime minister, relinquishes power in October.

On a strategic level, there may well be opportunities for Nigeria and the UK to explore in terms of the latter’s expressed intention to upgrade commercial ties with other partners and blocs such as the Commonwealth, in which Nigeria is one of the bigger economies. Here the UK’s focus is undoubtedly on Australia, New Zealand, US, Canada and India. Nigeria, however, can explore potential trade niches. It is conceivable that Nigerian negotiators might succeed in persuading British counterparts to open up to Nigerian agricultural goods and processed foods, in the way they have not been able to convince EU interlocutors. This will be helped by the proposal of some Brexit supporters to immediately drop all tariffs on goods coming into the UK. This is premised on the unproven assumption that others are likely to reciprocate. Such uncertainties, if well exploited, could provide opportunities as Nigeria pushes to resuscitate its agricultural sector for local food supplies and export markets like Britain.

Ola Bello