Why Botswana should be afraid of Brexit

Brexit – the UK’s possible exit from the EU – could lead to a renegotiation of the recently signed EU-Southern African Development Community (SADC) Economic Partnership Agreement (EPA). As a part of this very agreement, the EU consented to give Botswana produced beef preferential access to the EU market. Currently, the bulk of Botswana beef comes to the EU through the UK. If UK citizens vote today for exiting the EU this will result in Botswana losing the access to the high price European market, at least temporarily.

A deeper look to Botswana’s macroeconomic data shows what’s at stake for the southern African country: According to World Bank data for 2014, more than half of Botswana’s exports to the UK (55 percent) are animal produce – that’s the lion share, being worth more than 4 million US dollar. Through the eyes of a large economy this may seem little money, but truth is that landlocked Botswana is in need for any trading possibility.

According to the latest figures available from Botswana’s Central Statistics Office, dating from December 2010, the EU is quite an important buyer for exports from Botswana, with the Pula being the local currency: In December 2010 total exports were valued at 1,8 billion Pula – and almost half of them (worth 910 million Pula) went to the EU. The UK were the largest import partner of Botswana, importing goods and services worth more than 820 million Pula. Speaking for December 2010, almost 45 percent of Botswana’s exports went to the UK.

Ironically, the EPA has been signed in Botswana’s safari hot spot Kasane just some days ago. If the British vote to leave the EU this very agreement will have to be renegotiated. Further questions will have to be settled in order for Botswana to continue trading with the UK. According to media reports, managing director Matthew Stern of Southern African consultancy DNA Economics said that – should it break away from the EU – the UK would cease to be party to any of the EU’s trade agreements. These included the EPA, he said, noting there were no clear benefits for South Africa in a UK exit from EU.

All this shows clearly that the referendum in the UK is far more than a decision of the British people themselves. It may have the power to shake economies far away in Southern Africa, thanks to globalisation. For middle income country Botswana the newly signed trade agreement with Europe is to shape a possible new era. Minister of Investment, Trade and Industry, Vincent Seretse, said during EPA’s launch in Kasane: “The signing of the EU-SADC EPA marks the beginning of a new relationship – a transformation from the old regime of unilateral preferences and quota systems.” The fate of such hopes are now in the hands of the British people when they are to decide if the leave or remain.


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Niko Wald

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