Britons yesterday voted in a referendum to leave the economically powerful European Union, the world’s biggest economic and political block. But the decision that saw at least 52 percent of British voters voting in favour of leaving the Europe, has triggered anxiety as seen by the way global stock markets tumbled.
Analysts have posted gloomy forecasts for the global economy in general and the developing world in particular following the Brexit vote.
The Pound Sterling, UK’s currency fell to a 30-year low while the FTSE index of 100 biggest UK companies lost 4.4% of its value.
Having suffered a loss to keep Britain in Europe, UK Prime Minister David Cameron announced he would resign his job in October 2016. Cameron’s decision to resign has opened yet again another window of anxiety in UK’s politics beyond the divorce decision with the UE.
But more importantly perhaps is the possible break up of the United Kingdom after Scotland, currently enjoying semi-autonomy from England, called for separate vote of independence. This is after Scotland voted by 62 percent to 38 percent to remain in the EU.
A majority of voters in Northern Ireland also voted to remain in the EU.
For Uganda, the Brexit is likely to cause short-term turbulence in trade as well as travel arrangements with UK, but the actual picture on the divorce will only become clearer after the UK concludes what is feared to be gruelling trade negotiations with different trading blocks such as the East African Community (EAC), World Trade Organisation (WTO) since previous treaties it made under the EU will be rendered dead.
The divorce with Europe is also likely to negatively impact on International Development Assistance coming to poor countries as a result of economic slump the UK faces. According to the US based Brookings Institution, a foreign policy think tank, the UK could withdraw from its commitments made in 2005 at the G8 meeting in Scotland that included eliminating debts for poor countries.
Uganda enjoys deep political, economic and social ties with the United Kingdom and any negative effects on the UK economic will have far reaching consequences. As the leader of Britain’s Labour Party Jeremy Corbyn noted, jobs will be hit. A great number of Ugandans abroad live and work in the United Kingdom and send nearly one trillion shillings to families and friends in Uganda.