{The United Kingdom has recently held a referendum to leave European Union, an act known as Brexit where 51% of citizens voted in favor of this decision.It was followed by the resignation of some UK politicians who abdicated in their favor.}
Robert Mathu, the Executive Director of Capital Market Authority in Rwanda says “it has no long term consequences on East African Community.”}
Before and after the voting, the sterling has continued to lose value compared to the last 30 years.The capital markets in UK also incurred losses and have lost value which has made the future of EU uncertain thus the departure of the UK.
The Executive Director of Capital Market Authority says that the effects of the Brexit won’t affect EAC. Some of the effects might reach the regions that have an economic relation with Britain and the British investment.
He also said “According to me, Brexit is a problem for the whole world since the reason as to why most countries come together for economic purposes, is to allow investment and businesses to freely operate in the member countries.”
Mathu and other analysists worldwide, confirm that the first worry of the Brexit, is capitalist countries will spread the ideas of exit making globalisation a major priority while other countries want to put extra security on the immigrants and control the movement.
“It will affect the globalisation and the citizens and investors who have been travelling to the UK will encounter problems. Normally, you would find people traveling to UK and other countries with France with ease,” said Mathu.
Robert Mathu says that Britain is a county of which the economy and capital markets are strong but the Brexit will have an impact to a certain level.
In addition, he also said that Brexit will not affect the payment of the 400 million dollars that Rwanda got on the Eurobond market since it got the loan in dollar currency and the Brexit is in pound.
{{Knowing the effects on EAC is still in doubt}}
Robert Mathu says that the loss of value in the pound has effects on the commodities, where regional countries are exporting tea, coffee, will gradually decrease because exchanging into dollars also requires purchasing other needed commodities from China and other counties.
He continued. “These are short term; honestly, it’s hard to know the extent of long term effect of Brexit on EA. I hope that the long term effects will not be realised since the UK s going to review and discuss the agreement on the trade that she had with the EU and other worldwide partners especially the agreements she had with the member countries of the EU.”
He says that, what regional countries can do to minimise the effects of the Brexit, is to reduce the trade done in pound and preparing new agreements with the British.
He also said ”What we can do now is to wait, follow and prepare for discussions so that we can both gain, so that it doesn’t affect the economy and trade among the EAC and UK or EU.”
Robert Mathu says that other effects might come after the discussions between UK and EU plus other economic partners.
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