As clocks struck midnight on Jan. 1, the United Kingdom officially left the European Union. The U.K.’s formal and final exit from the EU and its trading bloc follows a four-year period during which it tried to negotiate a trade agreement to make up for the expected trade deficit from leaving the union. Finally, on Dec. 24, 2020, Prime Minister Boris Johnson announced that the United Kingdom had agreed to a trade deal with the EU, getting tariff and quota-free access for exported goods.
But the new trade agreement does not do for the United Kingdom what Brexit advocates hoped it would do. As policy experts and economists warned, the U.K. will be facing a deficit that could endanger its economic growth. In 2019, about 71 percent of the U.K.’s GDP was generated by the services sector. Previous access that U.K. companies had to a much larger EU market is suddenly unavailable.
London—once the financial headquarters of the world—has been hemorrhaging jobs and companies, especially in the financial sector. According to EY’s Financial Services Brexit Tracker, more than 7,500 jobs have left the U.K. for places like Dublin, Luxembourg, and Frankfurt. Following announcements that several companies are leaving the U.K. for access to the EU market post-Brexit, more than $1.6 trillion in assets have left the U.K. to the EU.
To make up for the huge deficit, the U.K. has been looking for new trade agreements and partners. Johnson’s government signed a free trade agreement with Japan, making it the first major post-Brexit trade deal, and has been looking at the United States as a potential trade partner. However, those talks have been tumultuous at best. The U.K. is also in discussions with Australia and New Zealand on a trade deal.
The U.K. is therefore looking at its former colonies and the Commonwealth as trade partners, especially in Asia and Africa. At its height, the British empire was home to about 23 percent of the total world population. Today, a renewed trading alliance with its former colonies and protectorates would make the U.K. a definite winner after Brexit.
For the British, if all goes well, new trade agreements can be entered without red tape from the European Union and optimists in London believe it might lead to a second and renewed Commonwealth. For African nations in particular, the agreements could create a relationship on a new, equal partner basis—something African leaders have complained about when it comes to relations with the EU.
But forging partnerships with former colonies might present a problem for the U.K. That’s because the British government first needs to acknowledge its role in colonialism and the slave trade and look to pay reparations at the very least. Johnson famously said colonialism in Africa should never have ended while downplaying the slave trade and its effects. In a 2002 article about Africa, the prime minister wrote “the problem is not that we were once in charge, but that we are not in charge anymore.” He has not walked back those comments.
Prior to former Prime Minister Theresa May’s visit to Nigeria, Kenya, and South Africa in 2018, no British prime minister had visited the continent since 2013. This scramble to establish new partnerships and revive older ones seems more a reaction to the British economy’s hit from Brexit than any newfound love for Africa.
“The U.K. basically told Nigeria and other countries in the Commonwealth to take a hike after joining the EU,” said Salmon Shomade, a Nigerian American associate professor of political science at the Oxford College of Emory University. Beyond that, there has always existed a distaste for the British Empire in Nigeria.
“Nigeria is dealing with several problems, including insecurity, economic instability, and tribal passive aggression, problems that can be traced back to British influence on the country,” said Feyisayo Olonilua, a Lagos-based economist. “A trade deal with the U.K. will require that the country comes of age, but for that to happen, the U.K. might need to do a lot more than just offer trade.”
In the build-up to the Brexit vote, the older British empire was set up as an example of what a supposedly independent U.K. could achieve again. Perhaps looking at the African continent through the lens of its population, British ministers were hoping to build an “Empire 2.0” with the continent.
“Except the countries that still have the queen as the head, the Commonwealth is dead,” said Emmanuel Okorocha, a retired Nigerian civil servant. “There are not enough Canadas and Australias to fix the problems that Brexit will bring to the British people. Anything looking like the British government trying to form trade links or improve on its standing in Nigeria will be seen as a joke.”
There are also purely economic obstacles. Nigeria, Ghana, and Kenya are seen as potential trade partners with the U.K., but it is a mistake to believe that former colonies can fill the deficit left by Brexit, especially as venues for import substitution. Nigeria, in particular, is a huge market that has been touted for its potential but could prove useless to the U.K. That’s because Nigeria, like other African countries, is still stuck in the past in what it provides to trade partners.
Michael Butler, an associate professor of political science at Clark University, argued the relationship between the U.K. and its former colonies hasn’t evolved enough. “The historical relationships and persistent ties between the U.K. and its former colonies are no longer the impetus or pathway to economic exchange they used to be—particularly since those relationships and ties are steeped in colonialism and imperialism, at a moment in time when we are witnessing a reckoning with those practices,” he explained.
Save for the common English language and the ability to join the British armed forces, there are no benefits for Commonwealth citizens and former colonies. The U.K. has historically had tight immigration laws that have diminished the ability of African members of the Commonwealth to move or even get visas to visit the country.
As the problems of Brexit became more apparent, especially as EU workers left the U.K, the government brought up a new points-based immigration policy. But the plans brought forward are antithetical to the will of many of those who voted to leave. Many pro-Brexit voters were intent on protecting U.K. borders—but, technically, the U.K. was not a part of the Schengen Area and already controlled its borders independently from the EU.
Indeed, the new Johnson immigration plan will punish many low-skilled white EU citizens and see an influx of skilled people of color looking to leave their countries for greener pastures—the same pastures pro-Brexit supporters voted to deny them access to.
To fix its trade and GDP deficit, the U.K. government will need to recreate the economy. Small- and medium-scale enterprises in the U.K. that still want to do business with the EU are finding new and expensive regulatory hurdles to cross; border delays and regulatory red tape are now the order of the day. For one, U.K. businesses that remained in the country will need to set up new mirror businesses that will be located in the EU to trade with the much larger and economically prosperous bloc—an endeavor that is very expensive for these businesses and could lead to more job losses in the U.K.
If it seeks to upgrade trade ties with Nigeria, the U.K. will be contending with a country and continent that is starkly different from the last time they had an extensive trade relationship. As U.S. influence wanes, China and Russia have been setting up shop across the continent and are well represented through loans, trade deals, military agreements, and capital projects.
For Nigeria’s government, China is a much more favorable partner. Unlike with the United States and EU, China does not have strict loan stipulations. As a result, China has been going on spending sprees across the African continent. In a lot of ways, China’s agenda is now permeating Nigerian policy. After a $40 billion pledge from China to Nigeria, the Nigerian government dutifully ditched another ally to obey Beijing’s wishes; it ordered Taiwan’s trade mission out of its capital city. (The Chinese foreign ministry stated that Nigeria had agreed to stick to Beijing’s “One China” policy, which holds that Taiwan is part of China.)
Any potential trade agreement with the U.K. will bring questions from Beijing—especially as China is one of Nigeria’s closest allies and trade partners. Recent British moves to welcome Hong Kong residents on long-term visas will not help either. “This does not exactly put the U.K. in the right place to displace China, especially in Nigeria,” Shomade said.
On paper, a trade agreement between Nigeria and the U.K. will be beneficial for both parties, particularly the Nigerian economy. But in reality, Nigeria does not present a desirable market for the U.K. At the moment, Nigeria has an unhealthy trade imbalance with China, where Nigerian exports are dominated by primary products, such as natural rubber, granite, charcoal, and tin. The production value for these goods isn’t enough to create jobs, and the final products are processed in China and then sent back to Nigeria.
“For Nigeria to become a good enough market for the U.K., a lot of development will need to be accelerated,” Olonilua said. “Very often, this has to come with terms on the loans and grants, but this will mean that the U.K. will spend money they don’t have trying to recolonize a country that is … unwilling to change as quickly as it will need to.”
Shomade believes Nigeria might see accelerated development due to U.K.’s desperation for trade partners. Politically, the U.K. does not exactly have power, but it does have technology and know-how that is severely lacking in Nigeria and the rest of the African continent. “If the U.K. makes a strict technology transfer argument to share knowledge and improve on the forward-looking economy, the lure of technological development might just bring it home,” Shomade said.
But technology is a space that China has made significant progress in during the last couple of years, and it’s unclear if British companies can compete with Chinese ones that are already firmly established in Nigeria and the rest of Africa like Infinix Mobile, Western Metal Products, and the China Civil Engineering Construction Corporation that is building a railway project in the country.
“In the end, it is just a business deal, but the amount of money that China can invest is a lot more than the U.K. can throw around,” Butler explained. “Trade policies are a very complex process that will take years and are not just a switch that can be turned on immediately.”
The British empire ended in a way that does not give the British government the sort of soft power that might be beneficial in a post-Brexit world. Any hints of neocolonial tendencies by the former colonizer will be seen as aggression that Nigeria’s central government will be very quick to shut down. In the 1970s, Nigeria famously expelled foreign-owned companies and banks through an indigenization policy.
The coronavirus pandemic presents a unique opportunity for the U.K to create a deeper and more extensive trade relationship with Nigeria and particularly the African continent. As vaccine rollouts pick up, many Nigerians do not trust the COVID-19 vaccines that come from China. Through vaccine diplomacy, the U.K can, at a government level, begin to compete with Chinese influence in the country.
But the U.K cannot possibly compete with China’s spending on the continent. To truly achieve its post-Brexit goals, the U.K. will need to acknowledge its problematic past and role in colonialism and the slave trade. This symbolic move would shed any hints of a neocolonialist agenda while opening up an opportunity for equal partnership in trade talks.
On the African continent, the U.K might lose out to China when it comes to trade figures, but back at home, an injection of brilliant Africans and Commonwealth members through the new immigration policy might just help the U.K make up for its losses.
