As Britain’s exit from the European Union takes more shape with the recent deal, economists have cautioned that Brexit may affect Nigeria’s $8 billion trade with the UK.
They argue that if Brexit impacts negatively on the British economy, it would in turn dwindle Diaspora remittances to Nigeria which is a major source of inflows into the country.
According to Nigeria’s first professor of Capital Market, Uche Iwaleke, of the Nasarawa States University, Brexit may stifle emigration to Britain by Nigerians and so Diaspora remittances could drop if the deal hurts British economy.
He explained that Britain still remains the largest source of capital inflow into Nigeria, citing the National Bureau of Statistics.
British investment flow to Nigeria would also be imperilled if its economy is affected negatively by Brexit, Iwaleke added.
The university don is, however, optimistic that as Nigeria’s colonial master, the UK will have the greater freedom to relate with Nigeria the way it deems fit without recourse to EU rules and regulations.
“As the former colonial master, Britain will now have the freedom to deal with Nigeria as opposed to if they are dealing with us a bloc.
“Her membership of the EU serves as a constraint on what the UK can do with Nigeria. Now that it is pulling out of the EU, the freedom to relate with Nigeria will be limitless.
“Again, trade negotiations with Nigeria
will no longer be with a single bloc which becomes a little more complex,” the professor of capital market said.
Principal Research Fellow, National Defence College, Abuja, Dr Chinedu Udeh, also weighed in on the mixed optimism of Brexit.
He said that with the UK’s exit from the European body, “migration to Britain by Nigerians will become more difficult and so Diaspora remittances could drop.
“We are going to see the impacts in the areas of immigration. It might become difficult for more people to go to UK.
“Before now, some Nigerians will go through other EU countries, get EU passport before moving to the UK. Once the deal is sealed as expected sometime in March 2019, accessing EU passport as a means to gain access to the UK will become difficult.
“If the deal hurts the British economy, foreign investments in Nigeria could be affected as Britain has remained the largest source of capital importation in Nigeria for many years now, according to the National Bureau of Statistics.”
Udeh also spoke on the impact of Brexit on the European body.
“The first implication is for the European Union, in terms of trade emigration and jobs. The UK has very powerful influence in the EU. It is the second largest contributor to their budget. As a matter of fact, it contributes 11.5 billion euro to EU budget, Germany contributes about 15 billion euro or so. So, UK’s withdrawal will put lots of pressure on other countries, in terms meeting their budget or they have to cut down the budget.”
Udeh, however, sees some positives impact for non-European workers, including Nigerians.
“On the positive side – let me be optimistic, a lot of the workers that are coming from the EU might not be able to gain access to EU freely.
“In terms of labour, it means citizens of non-EU countries like Nigeria in the UK will be able to get jobs.
“Brexit may favour Nigeria in the area of improved trade with the UK. These are possible scenarios that may play out.”
On the visits of Prince Charles and Prime Minister Theresa May within the interval of three months, Udeh said it could be due to the search for new markets by the UK.
“If eventually the UK exits the EU, its market will certainly shrink. So, they ought to look for new market.
“Brexit also has implications for separatist agitation in Nigeria. It could fuel such sentiments. It may also impact negatively on
development assistance from the UK because if Britain’s economy shrinks, it may cut overseas aid. There could be increased educational opportunities for Nigeria but tougher visa regime.
‘I wish it does not happen because of its wider implications for the Europe and Nigeria in particular,” he stated.
On his part, the former Vice Chancellor of the University of Abuja and Sokoto State University, Professor Nuhu Yakubu, believes that Brexit could become the silver lining for the Nigerian economy in dire need of investment.
“It is clear that Britain is looking for friends because it is winding down on its membership of the European Union. This could become a window of opportunity for Nigeria to exploit. For instance, the prime minister, Theresa May, was here in August, and two months later, the heir apparent to the British throne, Prince Charles, came for an elaborate visit. These visits are certainly not a jamboree but looking for new opportunities, which Nigeria can tap into.”
LEADERSHIP Sunday reports that Nigeria is Britain’s second largest trading partner in Africa after South Africa, with £6 billion (about N2.4 trillion or $8.52 billion) in bilateral trade volume last year.
It is feared that the deal hurts UK, its GDP would shrink over time and a weaker and smaller UK economy would scale back its investment in development projects in Nigeria.
Also, Britain is expected to be very strict on immigration and visa applications especially from countries like Nigeria which has plenty visa applicants to the United Kingdom, with already an estimated two million Nigerian migrants in the country.
Another possible outcome, analysts say, is that investment in Britain by Nigerian businessmen would be less attractive since the country would no longer offer full access to the lucrative EU market.