The people of Britain have voted to exit the European Union (EU) dubbed Brexit. As 51.5% of Britons voted to leave the EU, what does the aftermath mean for Sierra Leone? Some of those who voted in the referendum to stay or leave the EU are originally from Sierra Leone. Many of them left Sierra Leone for the United Kingdom (UK) to escape poverty and live better lives. But what they voted for is based on their British citizenship. The result of the votes has ended 40 years formal relationship with the EU. Prime Minister David Cameron is stepping down in October to demonstrate his unwillingness to lead the UK outside the EU.
Britain was a member of the EU but was not part of the Shengen visa arrangement to allow free movement of people and goods across the 26 EU nations and continued to use it currency the Pound Sterling instead of the Euro. Some economists are predicting arecession but the Governor of the Bank of England Mark Carney says the Bank has modalities in place to address emerging issues.
Sierra Leone is a former colony of Britain and has benefitted from its membership of the Commonwealth in very many ways from education to aid. Though a sovereign nation, the country like all former colonies of Britain has been receiving aid from British charities like Oxfam, ActionAid etc. Through the Department for International Development (DFID), there has been budgetary support to the country and DFID has been funding many government projects. DFID recently provided $15 million grant as part of the $55 million that World Bank needed to support agribusiness in the country. This was happening before Britain’s membership, during its membership and hopefully after leaving the EU.
The country was also benefitting from the EU. The EU funded the construction of the Freetown Conakry Highway and most recently undertook to pay the equivalent of Le720 billion for the construction of the Bandajuma Liberia highway that will boost trade between the two neighbours. Britain was a strong advocate for Sierra Leone in the EU. With the strong Advocate out, Brexit is likely to see a drop in budgetary support, project funding and other opportunities for Sierra Leone from the EU.
Remittance from abroad to family members and friends in Sierra Leone is an important aspect of the economy that is not properly captured. Or because of the lack of openness, the amount of money remitted every year into the country is not disclosed. The total remitted from Britain alone in a year may run into millions of Pounds. If there is an employment boom in the UK and the Pound does not fall to the Euro and the US Dollar, then Sierra Leone stands to benefit from Brexit. If it is the opposite in the coming weeks and months, then the country will see a drop in remittances.
Immediately the result of the vote was announced on Friday, the Pound Sterling fell to the Dollar and shares also fell. In Sierra Leone it was a different story. The Pound Sterling was buying at Le9,340 and selling at Le9,795 as at 14:00 GMT on June 24, according to the exchange rate of Standard Chartered Bank in Freetown.
ECOWAS and AU
The Economic Community of West African States (ECOWAS) and African Union (AU) were established to foster trade and free movement within the sub-region and the continent respectively. They were conceived to achieve the same objectives as the EU. Citizens of ECOWAS do not need visas to visit each other. Recently, Ghana promised to give visa on landing for citizens of AU countries starting July and Namibia the latest to offer the same for AU citizens. It is yet unknown whether Brexit is a similar fate that awaits ECOWAS and the AU.
The UK has entered an unknown territory and the impact of Brexit will only be understood in the coming weeks, months and years. How will UK’s decision play out on Sierra Leone is highly a wait and see. One of the facts is, according to Bloomberg Intelligence, UK is just 54 percent self-sufficient in food. Trade deals will be negotiated or renegotiated and other concerns will be discussed. If it works for Britain, then it is likely to happen with other regional organisations across the globe with powerful nations wanting to go it alone instead of working with the regional blocks. If it doesn’t then it will be an opportunity also to learn from ‘Britain Decide’.
Monday June 27, 2016
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