Bridging the Gap: How UK Businesses Can Enter Africa Post-Brexit

In light of Brexit, British enterprises are gazing towards uncharted territories for economic expansion. Africa, marked by its burgeoning markets and a consumer base dominated by its younger demographic, holds immense promise. To chart a successful venture into Africa post-Brexit, businesses need a refined understanding of trade dynamics, regulatory landscapes, and on-ground market intricacies. The UK and Africa have immense potential to improve their trade relationship as it has been dwindling in recent years. According to a report by LSE, the UK accounted for 7% of Africa's imports in 1997, but this has fallen to circa 2.1%. Here, we demystify the roadmap for robust British business growth in Africa in the post-Brexit era.

The UK's New Developing Countries Trading Scheme (DCTS) and Its Implications

Amidst the ever-evolving trade landscape post-Brexit, the UK government has introduced an initiative poised to transform trade relations with developing nations, particularly Africa. Unveiled on Monday, 19th June, the UK's post-Brexit Developing Countries Trading Scheme (DCTS) sets forth a renewed trade vision with simplified regulations and generous tariff cuts, aimed at fostering prosperity in developing countries and bolstering the UK's trade partnerships.

Overview of the DCTS:

1. Scope and Outreach: The DCTS encompasses 65 countries, representing over 3.3 billion people, with more than half of these nations residing in Africa.

2. Tariff Benefits: The scheme either reduces or completely removes tariffs on products from these countries. It also simplifies trading rules, rendering it more benevolent than the EU scheme which the UK was previously aligned with. The direct implications include potential savings of over £770 million annually for UK businesses and diversified product choices, likely at reduced prices, for UK consumers.

3. Promoting Global Development: The UK's commitment to global development shines through in this initiative. The DCTS not only aids developing countries in augmenting their exports but also diminishes their dependency on aid. Over time, this can lead to heightened trade interactions, translating to more savings on import costs for UK businesses.

Deciphering Post-Brexit Trade Dynamics

Brexit has altered the UK's global trade tapestry, prompting a reconfiguration of its ties with nations across the globe, including the vast African continent:

• Bilateral Trade Pacts: The UK's proactive efforts to ink distinct bilateral trade agreements with African countries are in full swing. For British enterprises, comprehending these pacts is paramount, as they spell out the specifics of tariffs, customs protocol, and trade caps.

• Continuity Accords: The UK has strategically forged continuity deals with a host of African nations, ensuring a seamless trade transition. These accords essentially mirror the pre-existing EU trade terms, serving as a stabilising anchor for businesses amidst change.

• UK's Preferential Trade Scheme: Embodying the spirit of empowerment, the UK's Generalised Scheme of Preferences (GSP) is crafted to support developing nations, facilitating their exports to the UK. It champions reduced or even nullified tariffs on a diverse product spectrum.

Ensuring Robust Regulatory Adherence

For British businesses casting their nets in African waters, adhering to local regulatory frameworks is a non-negotiable:

• Data Guardrails: Businesses processing personal information of African patrons must align with the region's data protection regulations. Take South Africa’s Protection of Personal Information Act (POPIA) as a case in point.

• Employment Directives: If establishing a local foothold is on the cards, mastering the intricacies of varied African employment laws is crucial.

• Anti-Graft Measures: British enterprises fall under the purview of the UK Bribery Act, notable for its global enforcement capabilities. It implies possible UK-based prosecutions for overseas transgressions. Concurrently, African nations’ own anti-corruption laws come into play.

Capitalising on Local Alliances and Digital Innovations

Fostering local collaborations and harnessing modern technology can be pivotal in deciphering and adapting to new markets:

• Local Synergies: Collaborating with indigenous businesses can unlock a treasure trove of benefits, from gaining market insights to effortlessly manoeuvring through bureaucratic channels.

• Digital Enablers: Platforms like Verto, a beacon of tech innovation, can help address operational conundrums. Verto, for instance, simplifies cross-border monetary transactions, unlocking hard-to-reach currencies, slashing settlement delays, and enabling transactional transparency.