decides to leave the UK and join the EU, it might trigger Wales into toeing the same line and Northern Ireland into reunification with the Republic of Ireland. Even within the UK Parliament, the two major political parties are suffering internal cracks as politicians trade verbal punches.
Implications for Nigeria
Nigeria will surely be affected by whatever wind that is blowing across the British Isles. As a member of the British Commonwealth, Nigeria has strong economic ties with Britain. Nigeria is Britain’s second largest trading partner in Africa after South Africa, with £6 billion (about N2.4 trillion or $8.52 billion) in bilateral trade volume in 2015 alone.
However, if Brexit, as many expect, leads to the shrinking of the UK GDP, it will lead to a scaling back of investments by British investors which will affect the volume of trade with Nigeria. With Nigeria boasting a sizeable population in the UK, if the British economy goes into a recession, it will affect the financial muscles of the Nigerian Diaspora in the UK and by extension, remittances back home. Brexit could also trigger a weakened European economy. A weakened Europe would affect Nigeria in terms of aid to Nigeria. Britain accounts for about 15 percent of EU’s operational budget.
Moreover, it would foster anti-immigration policies around the world, and this will affect Nigerians as they have a large population of its citizens in Diaspora. It is expected that Britain will be very strict on visa applications especially from countries like Nigeria with large visa applicants to the United Kingdom.
Brexit is likely to send the wrong signal in Nigeria. With re-emergence of ethnic nationalism across Nigeria, many are already calling for a Brexit type of referendumfor Nigerias to decide their destiny. Such calls will not go away soonest.
Implications for the EU
If Britain does well outside the EU, other member states could follow the exit door. Ratings agency believes Brexit will create a precedent for any country to leave the EU and this will increase political risk in several ways. It could also boost anti-EU or other populist political parties, and make EU leaders more reluctant to implement unpopular policies that would have long-term economic benefits.
Brexit is likely to cause volatility in the EU. According to Fitch, the most exposed countries are Ireland, Malta, Belgium, the Netherlands, Cyprus and Luxembourg, all of whose exports of goods and services to the UK are at least 8% of GDP. Brexit could trigger a weakened European economy.
Implications for the world
Investors all over the world hate uncertainty and the result of the referendum gives rise to a surfeit of it. Brexit will surely hurt the global economy several ways. A big concern is the extent to which a retreat from financial risk will disturb the existing fault lines in the world economy, notably in China and southern Europe. Italy has a referendum of its own (on constitutional change) in October, this might influence it. If Brexit leads to a weaker European economy, it will certainly hurt Chinese exports. Perhaps a bigger risk is a renewed bout of dollar strength, as Europe’s currencies weaken, which might in turn put renewed downward pressure on the yuan.
Moreso, there are concerns over perception. If Britain, long a champion of free trade, can vote to revoke a regional trade deal, how much faith can businesses worldwide put in other international economic agreements? An EU shorn of Britain’s deregulating influence is a troubling portent for the liberal world order. Nationalist, populist and protectionist forces in other countries will be greatly encouraged by Brexit. The United States of America, long seen as Britain’s major ally in Europe, will mourn the loss of a key partner in Brussels. Some see Brexit as a sign of waning US influence over the Britons. Moreso, there are concerns that this could ignite a new wave of nationalism and xenophobia across the world.
Are there options for Britain?
Under Article 50, the terms of Britain’s departure would be agreed by the other 26 EU countries, wi