Brexit is just a shorthand way of referring to the British exit from the EU. It is a word that owes something to the term “Grexit”, which has been used for several years to refer to the possibility that Greece might leave the Eurozone and now has been adopted and will probably end up in Webster's dictionary.
The impact of one of the EU’s biggest and richest economy leaving the EU is momentous and its repercussions are being felt by markets across the world, apart from the direct political and economic fallouts in the UK and inside the EU.
So what does this mean to us in South Africa and what impact will this have on our struggling economy.
Well, for once we cannot blame politicians, bankers, foreigners, bureaucrats and even political correctness, but, can we blame Brexit?
Resignation and new Prime Minister
So the relationship between these two have been frosty to say the least which started when in 2014 Zuma was told he could only meet deputy Prime Minister Clegg as Cameron was too busy and then prior to that in 2011, when President Zuma accused Britain and America of attempting "regime change" during the uprising against Colonel Gaddafi in Libya.
Whichever way we look at it this can only improve, firstly because we need these relationships and secondly we need investors and allies to prevent us from being downgraded even further by the Moody’s of the world. A perfect time to mend relationships with a new Prime Minister and elections looming in South Africa and the imminent departure and new President at the next General elections in South Africa.
With the “The Article 50 process being a divorce: who gets the house, who gets the kids, who gets the bank accounts," as senior EU officials have said, referring to priorities such as trade, settling the EU budget and the status of Britons living in other EU states and of EU citizens in Britain - several million people in total. “We will need to find alternative countries and continents to import from and export to”. The time is right for South Africa to flex whatever influence it has now, while the divorce is happening.
Remember, new trade barriers would hurt both sides' economies. However, a new trade would benefit all. But the EU fears of a political "domino effect" of other countries voting to quit the bloc would cost more long-term. But would it for the Brics bloc and other countries? That is the question.
So the big question is: Where does the EU go from here?
The EU needs quickly to fill a 7-billion-euro hole in its 145-billion-euro annual budget, which is currently fixed out to 2020, as it loses Britain's contributions while saving on what Britons receive from EU accounts. So where will that money come from? The USA unlikely, Australasia – I doubt it – That leaves Africa!
We already see that the week of 13th July that President Zuma signed accords for higher education, cultural cooperation and development cooperation with President Hollande from France. Coincidence, I think not; because Britain’s decision to quit the European Union would not hurt South Africa’s ties with the world’s largest trading bloc. – From the horse’s mouth.
With the Southern African economic bloc seeking $2.7billion for drought relief, opportunities are springing up for those who see the ties and investment opportunities within the EU environment, staring them in the face – is this a case of quid pro quo?
5. So what changes?
A lot, unless the EU respond quickly.
The EU should put its excellent and largely untapped credit to use. Leaders would be acting irresponsibly if they failed to employ the EU’s borrowing capacity when its very existence is at stake.
Make the deals, secure the loans and open the trade with new partners.
We see Kenya, taking strain because of the Pound exchange rate being poorer than when they negotiated their payments in pounds for exports; this is where new negotiations should be struck immediately to secure the products and service but at the correct exchange rate. It’s the future that needs attention.
So Africa seems a likely candidate for some exciting new ventures and with Theresa May as the new Prime Minister her support for Africa starts with her shoes….
Get the latest issue of FAnews