THE depreciation of the British pound will open up cheap markets for Zambia to source goods from the United Kingdom (UK) which local business community must take advantage of, says Private Sector Development Association (PSDA).
On June 23, the people of Britain voted for a British exit or Brexit, from the EU in a historic referendum.
The outcome prompted jubilant celebrations among Eurosceptic around the UK and sent shockwaves through the global economy.
After the result, the pound fell to its lowest level since 1985 and it has instilled fear in some of the global business community including those from Zambia as it may affect trade in the EU and UK.
But PSDA chairperson Yusuf Dodia said in an interview that the Brexit may not have an impact on Zambia’s economy as most trade agreements were with the EU and not the UK.
“The UK has always had its own visa arrangements unlike the EU where you have a visa which allows you to go to several EU countries which UK refused to do.
“The UK has been part of the EU for the last decade or two and all Zambian trade agreements whether bilateral or multilateral have been through the EU because EU was not interested in individual member states signing agreements with Zambia,” he said.
He explained that the depreciation of the British pound as a result of the Brexit will work to an advantage of Zambia as sourcing goods from the UK would be cheaper.
Mr Dodia stressed that he was confident the breakaway would not affect Zambia as most countries with string economies such as Germany were still in the union.
“There will be no impact of British pound depreciating because UK’s trade with Zambia is small and in the Europe, the largest economies are France and Germany, so I think dominant countries are still part of the EU.
“If anything, the pound is likely to become very unstable over time and it may open up markets for Zambia because the more the pound drops the better market for Zambia when sourcing goods from the UK. It will benefit Zambia more, so I do not think we need to worry,” he said.
He explained that Zambia would, however, have to come up with fresh trade agreements specifically with the UK.