https://www.engineeringnews.co.za
Africa|System
Africa|System
africa|system

South Africa needs to prepare in case of ‘hard’ Brexit – NWU economist

NWU economist Professor Raymond Parsons

NWU economist Professor Raymond Parsons

Photo by Creamer Media

11th December 2018

By: Marleny Arnoldi

Deputy Editor Online

     

Font size: - +

North West University economist Professor Raymond Parsons says a “hard” Brexit is likely in March 2019 and that the UK may well crash out of the European Union (EU) without a withdrawal agreement.

He laments that, with the decision by the UK government to delay the Parliamentary vote on the Brexit deal, the Brexit process has been pushed back into uncharted waters, and South Africa needs to prepare contingency plans to protect its economic interests.

Parsons suggests that the latest UK political developments need to be closely monitored, since there remains a great deal at stake for South Africa in the eventual outcome of Brexit, considering that the EU and the UK are South Africa’s largest trading partners.

“The real danger now exists that the UK may well crash out of the EU without a withdrawal agreement, and should that occur, it would have serious ripple effects through key parts of the international trading system and supply chains, including South Africa.”

If a worst-case “no deal” scenario happens, Britain would immediately change from the trade rules of the EU to those of the World Trade Organisation. Its economy would then also become subject to the EU’s common external tariffs and other legal and economic changes would also ensue.

Trade beyond the EU, such as with South Africa, might be influenced as many trade deals Britain benefits from were negotiated through the EU and would lapse with a “no deal” Brexit, says Parsons.

He notes that various institutions, such as the UK Treasury and the Bank of England, have emphasised the heavy economic cost of a potential Brexit “no deal” for the UK.

The International Monetary Fund estimates that, in such an event, the UK would lose about 5% of its gross domestic product within a few years, while Germany, Denmark and Belgium would lose 1% and Ireland would probably lose about 5%.

“Although the expected fall in the pound would be helpful to exporters, the resultant inflation and potentially higher interest rates could shrink the UK economy, reducing its market potential in future,” Parsons says.

For South Africa, there are both risks and opportunities in the event of a “hard” Brexit.

“A fresh audit of the latest EU and UK economic developments therefore needs to be made.

“It may be necessary to evolve contingency plans to ensure that South Africa’s economic interests in the UK and the EU are adequately protected and that any disruption to trade be kept to a minimum.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Latest News

Magazine round up | 23 February 2024
Magazine round up | 23 February 2024
23rd February 2024

Showroom

Actom image
Actom

Your one-stop global energy-solution partner

VISIT SHOWROOM 
Multotec
Multotec

Multotec, recognised industry leaders in metallurgy and process engineering help mining houses across the world process minerals more efficiently,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 23 February 2024
Magazine round up | 23 February 2024
23rd February 2024
An image of Dr Mehran Zarrebini posing in front of waste tires
Firm emphasises valorisation
23rd February 2024 By: Lumkile Nkomfe
Coal being transported to port
Mining tax revenue down by 50.4% y/y
21st February 2024 By: Darren Parker

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.405 0.463s - 158pq - 2rq
Subscribe Now