Brexit: The consequences for financial markets and investments in Africa
Experts believe that the continent could face "severe" consequences.Britain’s decision to exit the European Union is likely to have "severe" consequences on economies in Africa, according to experts.
The EU is the continent’s largest source of trade and foreign investment, and many trade agreements may have to be reworked, Willemien Viljoen, a researcher at the Trade Law Centre in Stellenbosch, told Bloomberg.
The Brexit may also impact African exporters, with suppliers of agricultural and manufactured goods being the most vulnerable.
In addition, the continent's investment appeal may also suffer: "If you were going to do a deal, hire people or buy new equipment you hold off on that," said David Shapiro, director at Johannesburg-based Sasfin Securities.
African markets are bracing for a storm, after the pound reached its lowest level in over 30 years and the South African rand dropped to its 2008 level, losing eight per cent of its value against the dollar. The Johannesburg Stock Exchange fell to its lowest level since January after the Brexit annoucement.
However, South African President Jacob Zuma said he was confident in the ability of banks and financial institutions in the country to withstand any impact from Brexit. "We are equipped to deal with financial shocks, as we have already shown in the 2008-2009 crisis," he said in a statement issued by the presidency.