24 April 2017

Uganda: What Would Britain's Exit From Europe Mean for Uganda?

Photo: Hannibal Hanschke/Reuters Media Express
Two activists with the EU flag and Union Jack painted on their faces, kiss each other in front of the Bradenburg Gate to protest against Brexit in Berlin.

"We too have a role in determining our response and where feasible, we should make choices that reflect our reassessment of priorities within a changing world," said Ms Theresa May, the British Prime Minister. "...I want us to be a secure, prosperous, tolerant country, a magnet for international talent and a home to the pioneers and innovators that will shape the world ahead."

It was a bitter-sweet farewell following the delivery of Ms May's historic letter to Donald Tusk, the President of the European Council, officially notifying him of the intention to trigger Article 50 and quit the European Union (EU).

Perhaps it feels like the end of an episode in one's favourite TV series, as you wait for what happens next. The potential departure will have a negotiation of terms that will last two years and will likely negatively affect the global economy.

It is my hope that it would take a shorter time, leaving a favourable time for Uganda to adjust to the anticipated change before withdrawal is actually effective.

Often, some have intimated why we should not be bothered, with such rhetoric as "they colonised us... ..serves them right"... ."what is in it for Uganda?"

This on-going debate has only focused on the economic impact of Brexit without taking the social and political impact Brexit will have on Uganda and vice versa (yes, vice versa!).

As a lawyer, it strikes me that this fallout from Brexit highlights the point that legal and institutional frameworks do matter to the functioning of economies. I do not think we can quantify the economic effect of this exodus because we do not know the specific terms of UK's withdrawal from the EU.

So what does this have to do with Uganda? Firstly, Uganda like many other African countries has had a bitter-sweet political and economic relationship with UK and the EU.

The effect of the lowering value of the British pound compared to the Shilling is that the value of the remittances to Uganda would be reduced. However this reduction in the purchasing power value of remittances between UK and Uganda, maybe no less meaningful to the lives of the recipients.

Nowadays, it is easier for a camel to pass through the eye of a needle than to get a visa to the UK!

Going forward, this is a murky area in which assumptions on Brexit are premature. Some are of the strong view that Brexit will give the UK flexibility to establish less discriminatory (but perhaps uniformly regressive) immigration policies in the future. Let us only hope so, for I only share the sentiments of many. In this context, I find attempts at discussing UK immigration policy as futile.

Uganda will be faced with the prospect of entering new trade agreements with the UK. I assume that the British government will proceed pragmatically and uphold existing contracts.

The limited preferences in EU trade agreements in favour of Uganda and other African countries more specifically the East African Community (EAC) countries have been eroded over time. From the UK's perspective, it will have the task of negotiating new trade agreements with us.

However given that Africa accounts for less than five per cent of the UK's international trade, I highly doubt that Uganda will be high on the list of UK's trade agreement priorities. However the negotiation on region to region agreements like the one done in 2014 between EAC and EU would be more pressing than individual trade deals with the UK.

Perhaps, in our favour, would be that of agricultural subsidies, where for years the UK has criticised the current subsidies that European countries have put in place, which have hindered African farmers' and specifically Uganda's trade capacities.

EU has subsidy systems with harmful effects on Ugandan farmers' competitiveness. With most of our active population working in agriculture, the subsidies take an important toll on our livelihoods.

It is important to note that UK has been against these subsidies, thus there is a strong voice within Europe advocating for us.

Not all effects of Brexit are external to Uganda. We too have a role in determining our response and where feasible we should make choices that reflect our reassessment of priorities within a changing world. In particular we should continue in diversification of our economic and political relationships with larger economies such as US, China and Japan.

For UK, this exodus should not be achieved at the expense of the economic and financial benefits from globalisation and trade.

This should not result in a global competition for limited financial resources with traditionally advanced economies competing against developing economies for the same pool of funds.

UK's exit from the EU should not be viewed as a verdict against EAC and all forms of regional integration.

Moreover, in Uganda's context, regional integration mitigates the disadvantages of our relatively small-sized economy and supports the building of institutional capacity across a shared base.

Perhaps when a country as strong as the UK leaves the EU, it will be able to stand on its own and perhaps this will provide a good opportunity for us as Uganda to think about how, we too, can become more independent.

Regional integration in practice and not only in theory remains as critical as ever. The East African Legislative Assembly is not one for job seekers. These are the critical issues we should be focused on rather than engaging in petty fights on national television.

In conclusion, the UK as the fifth largest economy in the world may be able to afford-while still regret the costs of standing on the side-lines of regional integration. Uganda cannot afford to follow that course.

Mr Mugamba is a lawyer.

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