Brexit: African risk managers must prepare for impact on trade

Risk managers should be considering the Brexit impact, even for local businesses in Africa, as global trading relationships shift. As the UK and the European Union start trading talks in earnest, African risk managers are being urged to remain positive as Brexit unfolds and demand for new relationships increases. Risk managers attending a recent seminar in London, as part of law firm DLA Piper’s Africa Week, heard from a range of experts about the UK government’s current initiatives in building trade across Africa. Several of the speakers and delegates warned that the UK government was not putting enough emphasis on building new relationships and that could hurt British businesses trading across the continent. There were also warnings about the possible impact of Brexit on the ability of the EU to fund as many projects as currently, with some suggesting the loss of UK funding would adversely impact some of the EU’s development work in Africa. Joe Collins, managing director of African Supplies, said: “I am often critical of the lack of support from government levels,” adding that it has been up to him and his team to develop the business without looking for government support. What has helped historically, he said, have been the tax treaties and customs unions that have played a part in reducing import tariffs into certain countries, such as South Africa. He believes the UK government could do more in this area, which would really support international trade. “The UK brand has equity in Africa thanks to shared history and long-standing relationships. Added to that, the UK brand is trusted for producing products of a high standard, and purchasing those strong brand products gives the buyers a certain credibility as well.” His words were echoed by Ed Harkins, of GKB ventures, who told the audience that there were areas where the UK could still do more, however. Infrastructure was a particular need across much of Africa and was an area that the UK has been slow to support, he said. Mr Harkins suggested other countries, notably China and Turkey, have been much more proactive. “There is still a huge requirement that someone needs to step in and meet. The UK is held in very high regard from its legacy infrastructure,” he said, suggesting that might give the UK a good starting point. Delegates also heard suggestions that the UK should not rely on old, often colonial, ties in the modern environment and needed to be much more visible if it was to compete successfully with the likes of China and Turkey. “The UK has been way behind the curve,” warned Sharon Constancon, chairwoman of the South African Chamber of Commerce in the UK, adding that there are opportunities that need to be taken up much more robustly. Tara O’Connor, of Africa Risk Consulting, was among those who called for optimism, saying Brexit was what it was and business just needed to move on. Ms Constancon stressed: “One of the most interesting things is that the whole continent is open for UK business – it is not tied to old allegiances. “Brexit also provides a huge opportunity for African governments to reshape their trade. The key for the UK government is to look at the continent in a pan-African way.” There was also concern that businesses look at Africa for short-term results, but the speakers agreed that long-term vision was needed to make a success of UK-African relationships. They agreed that the UK government has plenty on its plate right now, negotiating the whole world over and they did question how high Africa would be on the list of priorities. It will be competing with the EU in a new way, as well as with the US, China and the likes of Turkey, all of which will produce new challenges and risks, they agreed.

Brexit: African risk managers must prepare for impact on trade

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