Britain’s EU exit: What implications for Tanzania? Trade, Investment and Development Aid Perspectives...

By Paul Kibuuka

DAR ES SALAAM. JAMES Ndale, a street vendor selling music CDs along the Julius Nyerere Road and a user/beneficiary of Infrastructure, one of the focal sectors of European Union (EU) cooperation well supported by funding from the EU’s European Development Fund, may not have learnt by now that on 23 June 2016 Britain - a former colonial master of the then Tanganyika Territory (now Tanzania) - decided, on a referendum, to cut itself adrift from the EU by a 52% to 48% vote; although Scotland, London and Northern Ireland all had a majority for remaining. 

The overarching argument for the decision was that the EU has undergone remarkable changes and developments over time, thereby diminishing the sovereignty of Britain and its capacity to project dominating power and influence on European and global events and possibilities. 

 Britain’s exit from the EU, widely referred to as the “Brexit”, has shocked global financial markets, depressed investor confidence and plunged the British Pound Sterling (GBP) to its lowest level since 1985, according to recent news reports. Following the surprise victory for the Brexit, Mr. David Cameron has announced he’s to step down as the Prime Minister of Britain by October 2016, but the French Foreign Affairs Minister, Mr. Jean-Marc Ayraut, has gone as far as to call for Mr. Cameron to make way hastily for a new British prime minister. 

Even more astonishingly and fickly, now, almost three days after the vote to leave the EU, market turmoil and potential crisis lurks over the global economy. 

The Bank of Tanzania (BOT)’s Governor, Prof. Benno Ndulu, needs to ‘keep an ear to the ground’ on any real, direct and immediate impacts; and begin working on contingency plans to best utilize the 2-year period, stipulated under Article 50 of the Lisbon Treaty, within which Britain would have to negotiate its exit from the EU. 

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