Ethiopia Looks To U.K. Post-Brexit Supply Chains
From Express. Story by Laura Mowat.
Free of the European Union framework, post-Britain Brexit is set to give Africa a fresh opportunity to negotiate future trade and cultural deals from a position of strength.
“A weak pound is good for Africa as it strengthens its negotiation power at the table,” said African social and political commentator, Levi Kabwato. “The U.K. can get into direct agreements with countries of its choice without having to engage within the E.U. framework. So it’s a win-win situation for both.”
Companies investing in Ethiopia include Diageo and Unilever, both based in London; Heineken (Netherlands headquarters) and U.K.-based Tesco.
U.K. leather company Pittards is a cheerleader for doing business in Africa. Pittard has been trading in Ethiopia for a century and has invested there for 11 years. The sheep in the livestock-rich African country are well-suited to making gloves for Pittards. The firm has five factories in Ethiopia employing 1,700 people and hopes to employ 5,000 people in five years.
“With a weaker pound, we can capitalise on it and we can export more,” Hankey said. “We hope that many other retailers see Ethiopia as a potential supply source. The fact that Brexit has happened is making everyone consider what is going on and thinking about changing their supply chains. The uncertainty makes companies look at what else there is. There is opportunity in Africa and retailers should consider it.”
Some advantages for U.K. companies to trade with Africa include a similar time zone and the fact that English is widely spoken.
“People are realizing that there are real investment opportunities there,” said embassy spokeswoman Gail Warden.
U.K. foreign Secretary Philip Hammond visited Ethiopia weeks before the Brexit vote to discuss ways of strengthening economic ties.
Any trade deals with Africa will be re-negotiated on the same terms following Brexit, said Steve Barrow, head of G10 Research at Standard Advisory London. “They’re not going to be whacking big tariffs on imported Kenyan roses, for example,” he said.
Aid initiatives will suffer following Brexit, Kabwato said. “Less aid is a good thing for Africa, it will force us to become more innovative and less dependent.”
The London-based Business Council for Africa supports 400 businesses in Africa. “Here at the Business Council for Africa, we are working closely with our partners in the U.K. government, Europe and the private sector to ensure that building and deepening business relationships with Africa remains a priority in the post-referendum environment, irrespective of whether these relationships are developed on a bilateral or multilateral basis,” said Karen Taylor, CEO of the Business Council for Africa.
In recent years, Ethiopia has attracted investment from France for wind power, Iceland for Geothermal power and Italy for Hydroelectrics.
The U.K. has about 200 British companies operating in Ethiopia and is the largest foreign investor in the country’s food and beverage industry, according to a spokesman for the Foreign and Commonwealth Office.
Read more at Express.