Possible implications of Brexit for Nigeria

The decision of the United Kingdom to leave the European Union has created shockwaves at the international level, with widespread discussion of the consequences for the rest of the world. This article presents different analyses of the implications of Brexit for Nigeria, the largest economy in Africa, which has significant economic ties with the UK. A member of the Commonwealth, Nigeria is the second largest export market for the UK in Africa, while the UK is the largest provider of foreign direct investment and development assistance to Nigeria. However, the possible slowdown of the UK economy in the short term and the renegotiation of its trade agreements with the rest of the world could disrupt trade between the two countries and directly affect Nigeria. A recent report by EXX Africa on the likely impact of Brexit on African economies suggests that these uncertainties could deal a blow to on-going reforms in Nigeria, particularly with regards to monetary policy and the liberalisation of the oil sector, the goal of which is to attract new investment to finance the country's growing budget deficit. Other analysts view the weakening of the UK and the pound sterling as an opportunity for Nigerian importers, adding that the UK occupies a relatively small space in total trade with the EU. The same is argued in the case of military co-operation, since it is mainly France and the United States that support the country in the fight against Boko Haram. A concern shared by most analysts, however, is the impact of Brexit on the remittances of Nigerian migrants based in the UK, which currently amount to more than USD 21 billion per year. Given the anti-immigration discourse from Brexit supporters, it is feared that the UK could adopt stricter migration policies, limiting migrants' room for manoeuvre and resulting in a lasting decline in this important source funding for Nigeria.