ABC Triangle of AfCFTA, Brexit and COVID-19 Offer Win-Win Situation for the UK and Africa

The transition phase of Brexit was in force when suddenly COVID-19 emerged from China and cruelly entered into all the countries of the world engulfing millions of lives. The UK economy was transforming itself after the Brexit deal between the European Union and the UK when this pandemic severely worsened the economic scenario of the United Kingdom.

A win-win situation

Africa’s’ trade relations with the UK are reshaped just in one year. The implementation of the African Continental Free Trade Agreement (AfCFTA), the exit of the UK form the European Union and finally, the COVID-19 Pandemic stirred the situation.

It could be equally beneficial for both the UK and Africa if the policymakers make use of this emerging ABC triangle. By doing this, the UK and Africa relations can reap the crop of success of trading and Cargo to Africa from UK.

How the UK trade could regain its strength?

The volume of trade between the UK and Africa reduced to 2.4 per cent in 2019. However potential export opportunity is significant for Africa and the UK but needs to be utilized. The untapped export of the UK is $8 billion and can be increased from the product lines of minerals fuels, electrical equipment, machines, vehicles and medicines.

This covers 54 per cent of UK exports to Africa. The UK trade could regain its strength and become a top investor in Africa. This deserves to mention here that at present after France, the Netherlands, the US and China, the UK occupies next place in respect of foreign direct investment.

African Continental Free Trade Agreement (AfCFTA) is boon and blessing

The African Continental Free Trade Agreement (AfCFTA) will boost annual income gains substantially every year. How is it possible? The answer to this question is a simple one.

By implementing AfCFTA, it will create the biggest free trade area comprising a group of countries. This mixed market will involve more than $3 trillion in business spending.

The UK has a great opportunity to enhance trade with Africa

There will also be free movement of around 1.3 billion people. The United Kingdom could benefit a lot from this reforming situation. African Continental Free Trade Agreement (AfCFTA) provides the UK with great opportunity to enhance UK trade with Africa.

At present this is being availed by five biggest economies of Nigeria, Algeria, Egypt, Morocco, South Africa and other 54 countries. But landlocked countries are hard to access to this trade.

The UK is reshaping its trade policy after leaving EU

On the bases of a lesson learnt, proves that now worldwide trade relationships of the UK are going to shift as a result of the post Brexit period after leaving the European Union. Now the UK Govt under its premium has a strong stance that it must now reprioritize its trade relationships.

It is of the firm belief that Africa being the potential site, deserves to be captured economically. COVID-19 has brutally damaged an established world value chains.

Biggest economies are trembling due to COVID-19

Due to COVID-19, there is a price hike all over the world and what about poor countries, even world biggest economies are trembling now. Air cargo rates too have gone high up to 60% on main routes. At the same moment, to adopt social distances and follow SOPs, delivery duration has also become double.

As a result of this havoc, more than 50 countries are forced to close their ports and if are open, stringent checking and examination system is adopted. As the UK is dependent upon world value chain up to 37%, its economy is passing through a hard time.

Looking towards the bright side, COVID-19 is losing its effectiveness step by step and now it is incumbent upon both the UK and Africa to accelerate the formulation of Africa Economic Partnership Agreement.