NAIROBI, KENYA: A decision by Britain to exit the European Union is likely to have far reaching effects on African businesses.
Several companies with roots in Africa have invested in the United Kingdom and other European nations and the strength of the Union has kept them in business.
In a historic referendum on 23 June, the UK voted to leave the EU after 43 years. The Leave camp won by 52 percent to 48 percent, with England and Wales voting strongly for Brexit, while London, Scotland and Northern Ireland backed staying in the EU.
UKIP leader, Nigel Farage, hailed it as the UK's ‘independence day’ but the Remain camp called it a ‘catastrophe’.
The pound fell to its lowest level against the dollar since 1985 as the markets reacted to the results.
One of the African companies that has invested in Europe, including the UK, Dahabshiil believes that a solid currency is good for business stability.
Abdirashid Duale, the CEO of Dahabshiil says the stability of Sterling and the Euro across the UK and in Europe have been good for remittances, trade and investment in Africa. This, in turn, has improved the lives of many poor people in the continent.
"Remittances and other business transactions from the UK and generally from Europe have changed the lives of many in Africa.
Brexit is likely to increase uncertainty and market volatility, which might translate to slower economic activity and affect trade relations.
“We hope things will be stable especially for the good of global businesses," he says.
However, in the short term there will be little immediate change, as the vote provides a political, not a legal requirement for exit from the EU.
For Britain to legally depart from the EU, it will have to invoke Article 50 of the Lisbon Treaty which allows for a two-year negotiation period to sort out the arrangements for departure.
Meanwhile, several banks have said Brexit will force them to rethink their attachment to the UK and review investment decisions.
HSBC said in February that almost straightaway it would need to move 1,000 jobs to Paris, where
it already has a large operation.