It is no longer news that Great Britain have pulled out of their membership of the European Union (EU). A referendum that could bear serious consequences for many Britain’s allies, as economic experts are already talking about the risk of a contagion effect beyond the borders of the United Kingdom. For Nigeria, Africa’s largest economy, timing couldn’t have been worst, at a time when the government is trying to fix an economy on the brink of a recession.
Earthquake, Tsunami, Disaster… Many words were employed to describe UK’s decision to end its relationship with the European Union. The Britain Exit, also commonly referred to as “Brexit” is likely to have economic consequences not just for Britain but for the whole world. Regarding Nigeria, as a member of the British Commonwealth, the country has strong economic ties with Britain. The United Kingdom is both an active member of the EU and the Commonwealth. As a direct result, Nigeria has been benefitting from the free trade tariff access of the British to the EU. With the Brexit, that one may become a little bit difficult for Nigeria, as investment in Britain by Nigerian businessmen would be less attractive since the country would no longer offer full access to the lucrative EU market.
Talk about a bad timing. Britain’s exit from the EU comes at a time when the economy is enduring a slump, largely due to the global fall in oil prices; the economy has contracted for the past two quarters and warnings have been sounded that it could slip into recession. The country’s oil production has also been cut from 2.2 million barrels per day (bpd) at the start of 2016 to around 1.6 million bpd, largely due to attacks on oil infrastructures in the Niger Delta by militant groups. In this context, the immediate effect of Brexit will test the nerves of Nigeria’s economic managers as global markets plummet.
The UK has always been one of Nigeria’s traditional trading partners. In fact, bilateral trade between the two countries, 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. Because of a shared language, Britain has remained a destination of choice for most Nigerians. The elite is deeply ingrained in the UK, and have bought into that country very deeply. With a population of 201,184 according to the 2011 Census, the UK is home to one of the largest concentrations of Nigerians outside Nigeria. Issuance of visas to Nigerians may take a hit as immigration was one of the key issues in the Brexit vote. Some Nigerians, who spoke to News Agency of Nigeria stressed the need for Nigerians in diaspora to start considering going back home, arguing the fact that “if Europeans developed Europe themselves we can also go back home and contribute to nation building”.
According to data from the National Bureau of Statistics, the United Kingdom 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.
On Friday, Muhammadu Buhari released a statement expressing his regret at the resignation of David Cameron, who stepped aside as British prime minister following the results, “a demonstration of courage by a democratic leader who respects the will of the people, even if he didn’t agree with their decision”, he said. The Nigerian president hinted at his country’s dissatisfaction with the result, saying that he hoped the West African country could “enjoy greater cooperation and consolidation of shared interests” with the UK “despite the outcome of the referendum”.
Similarly, politicians from France, Germany and Belgium, among others, have expressed concern over the EU’s economy and future without Britain. Some anti- immigration politicians in Europe have lauded the move and recommended the same step for their countries. The Brexit referendum which held on Thursday was described by UK authorities as historic with a record number of more than 30 million voters -the highest turnout at a UK election since 1992 – participating.