Brexit: Next steps and implications for the Nigerian economy
The UK is natrually looking to grow its market share, to encourge more businesses to come to Nigeria.
The decision the British people made on 23rd June to leave the EU was a momentous one. It will lead to change, and much detail about that change is still uncertain. But there are some very important certainties, and I want to focus on those today. Our Prime Minister, Theresa May, has made a very clear statement: “Brexit means Brexit, and we are going to make a success of it.” She has also been clear that making a success of Brexit is the most important task of the new British Government. There will be many elements to making a success of Brexit. This afternoon I shall say something about four of them:
- First: Democracy, and carrying out the mandate of the British people
- Second: Creating a new relationship with Europe; and
- Third: Forging a new role for Britain in the world.
- Finally: what this means for Nigeria and its economy.
So first of all, the referendum was all about the British people deciding their future. The question was clear: “Should the United Kingdom remain a member of the European Union, or leave the European Union?” The campaign was conducted with plenty of argumentation about the issues. The vote was held. Turnout was high, at over 72%. The electorate gave their verdict. A 52% majority voted to leave the European Union. And it is now the duty of Government and Parliament, to give effect to that democratic decision. I know that Nigeria understands the importance of respecting the democratic decision-making process very well. I think it was a very powerful signal of democracy to the world that the then British Prime Minister did not dispute the outcome, accepted it and resigned his office to allow new leadership to take forward the choice the British people had decide upon. Many Nigerians commented to me how impressed they were by this show of confidence in both the choice the people had made and that once made the government’s duty was to implement it.
As the British government sets about delivering on the UK referendum result it is clear that success means fully respecting the democratic mandate. There will be no attempt to remain inside the EU. There will be no attempt to rejoin the EU. And there will be no second referendum. The priority will be to regain more control of the numbers of people who come to the UK from Europe, whilst allowing British companies to trade with the EU’s Single Market in goods and services. Which brings me to how we create a new relationship with Europe. Britain’s departure from the European Union does not mean we are leaving Europe. It does mean creating new forms of relations with our European partners. The task will be complex, and will take time. The British government will be focussed on getting the best outcome, not the quickest one.
The UK will not trigger Article 50 and the process for leaving the EU until the government has a clear approach and objectives. The Prime Minister has been clear we will do this in the first quarter of 2017. You are aware of the legal and other challenges to this but the Prime Minister has been clear and that remains our intention. What will success look like? Ultimately it will be for our Prime Minister and her cabinet to determine. But what is evident is that the UK will be looking for mutually beneficial arrangements that serve our intertwined interests well. The UK will not be following any other model. The position we build outside the EU will be unique to Britain. To achieve this, and respect the mandate of the British people, will require fresh thinking and painstaking work. We are ready for that. The third element in making a success of Brexit is our role in the world. Anyone who interpreted the referendum result as the UK retreating from the world, could not be more mistaken. Britain is as committed as ever to working with our international partners to achieve a safer, healthier and more prosperous planet. The UK will continue to live up to its responsibilities as a permanent member of the UN Security Council. Our engagement as a NATO member is steadfast.
Our contributions through membership of the G7 and G20 will remain constructive. Our links with the Commonwealth, of which Nigeria is a key and major member, are unique and dynamic. The United Kingdom’s undertaking to spend 0.7% of gross national income on international development, and 2% of GDP on defence is enshrined in our law and means that the UK will remain an engaged international contributor. The UK has been, and always will be a trading nation, keen on entrepreneurship and innovation. We are very proud that the UK is the highest ranked major economy for ease of doing business. More than ever, we want to safeguard our reputation for providing an environment in which companies can prosper and pioneer for the future.
The characteristics which have made the UK a world leader in financial and other services have not altered with the decision to leave the European Union. Nor has our openness to business from around the globe. It is striking that on 1 August this year the first rupee denominated Masala bond to be issued outside India was arranged in London.
From what I have outlined, I hope you will have understood that the mindset of the new British Prime Minister, her cabinet, and the British public service is to make Brexit work well, for the British people and for our relationships with Europe and the global community. The scale of the task of delivering Brexit is huge, but there has been no undue delay in addressing it. In the space of a few months, we have a new Prime Minister, a new cabinet, and new machinery of government. The significant new ministries are the Department for Exiting the European Union, the Department for International Trade, and the Department for Business, Energy and Industrial Strategy. Within those departments there is already a lot of thinking, and analysis underway.
We understand the desire for clarity as soon as possible, but it would be mistaken to expect that working out the future will be a brief or straightforward process. Great priority will be given to a smooth transition which minimises disruption. And there will be no immediate changes to our relationship with the EU. Until we have left the EU, the UK will remain a member, with all the rights and obligations of membership. This is a new chapter for Britain, and it is possible that there will be some turbulence in the months ahead. But the economic fundamentals of the UK are strong, and our leadership is determined to do whatever is needed to safeguard the economy. Most importantly we are intent on making a success of Brexit in a way that works both for the British people and our international partners.
Finally, what does this mean for Britain’s relationship with Nigeria and what has or will change? In many ways very little has changed. The UK remains the 5th largest exporter to Nigeria. Our bilateral trade relationship is worth $3.8bn per annum. Shell, a British-Dutch company, has still invested billions of pounds into Nigeria and has around sixty onshore or shallow water oilfields and seven hundred wells. Shell still owns approximately one third of oil produced in Nigeria. Nigeria also remains the largest oil producing country in Africa, in spite of the depressed price of oil at this time. The historical and cultural links between Nigeria and the UK, the common language of English that the vast majority of Nigerians speak, the strong educational and business links don’t change. If anything, I see our connection becoming stronger. The UK is naturally looking to grow its market share, to encourage more businesses to come to Nigeria and to invest and to encourage more inward investment into the UK from Nigeria.
I don’t know if it will mean more Nigerians travelling to the UK. In 2014, over one hundred and sixty eight thousand people applied for visas to the UK. Over seventy per cent of those applications were successful and the visas granted within seven to fifteen days from the date of application. Most people for some reason doubt this but it is true.
We want Nigerians to travel to the UK. They come to do business, to study, to see family and to invest in our economy. There could be as many as 250,000 Nigerian nationals or dual Nigerian – British nationals living in the UK at the moment. The key thing for any visitor to the UK is that they respect the law and the length of time their visa says they can stay in the UK. A minority of Nigerian visitors don’t do that and it is only with that minority that we have an issue.
I hope Brexit will mean more British travellers visiting Nigeria, for the same reasons that Nigerians come to the UK. In particular I want people to come and explore the business opportunities that Nigeria offers. We think there are roughly 20,000 British and dual nationals living in Nigeria now. That figure may and I hope it will grow as British businesses of all sizes are encouraged to look outward still further, to export and do business, creating jobs in Nigeria.
It would help us of course if the process of getting a Nigerian visa was made easier and I have raised this with the Nigerian Foreign Minister and his team, and with the Nigerian High Commission in London. UK citizens should meet the requirements that the Nigerian government sets when they apply for a visa. I know that, and I would be the first to ensure they did that. But more Brits would come to Nigeria if it was simpler to apply for and the process for getting a visa was quicker. That is something for the Nigerian government to reflect on when they try to attract new investors to Nigeria.
Whatever Brexit means for the UK, it is also clear that Nigeria is going through a painful adjustment period as the Government seeks to diversify the economy away from being dependent on oil and gas and into other areas. I support that approach. The price of oil may increase. But that industry alone can’t support the need for jobs that Nigerians now have. That’s why the UK’s Department for International Development has its second largest programme in Africa here in Nigeria, helping with the immediate needs of course of those in desperate circumstances in the north-east of Nigeria, but also helping to grow and diversify Nigeria’s own industrial base and encourage entrepreneurship through improved education and skills training.
I think what happens here in Nigeria and the choices made by the Nigerian government will be more important for the Nigerian economy than whatever Brexit may mean for Nigeria. And I am optimistic for the UK and I am optimistic for Nigeria. I see the high calibre of the Nigerian business elite, many of whom are present in this room today. I know that Nigerian youth are enterprising and can-do. Every time I visit Lagos, and I visit often, I am reminded of what’s possible not just here but in the rest of Nigeria. In my view, it is not oil or gas that are Nigeria’s most important resource but its people. The human capital that Nigeria has – Nigerians themselves and their drive, determination and ability to get things done often when facing considerable challenges – are what makes me optimistic about Nigeria’s future.
So in conclusion, Brexit means Brexit and Brexit will happen. The UK will leave the European Union. And we believe Britain will emerge still stronger and more engaged with the world and Nigeria thereafter. My job as Britain’s High Commissioner is to make that happen, and I am committed to doing so – I hope with your help, advice and support.