Britain referundum decision to exit the European Union under the so-called Brexit has no long-term consequences on East African Community, Robert Mathu, the executive director of Capital Market Authority in Rwanda, has said.

Before and after the voting, the Pound Sterling continued to lose value compared to the last 30 years. The capital markets in UK also incurred losses and have lost value that has made the future of EU uncertain thus the departure of the UK.

Mathu said some of the effects might reach the regions that have an economic relation with Britain and the British investment.

"Brexit is a problem for the whole world since the reason as to why most countries come together for economic purposes, is to allow investment and businesses to freely operate in the member countries,” he said.

Mathu and other analysists worldwide, confirm that the first worry of the Brexit is capitalist countries will spread the ideas of exit making globalisation a major priority while other countries want to put extra security on the immigrants and control the movement.

"It will affect the globalisation and the citizens and investors who have been travelling to the UK will encounter problems. Normally, you would find people traveling to UK and other countries with ease,” Mathu said.

He added that Brexit will not affect the payment of the $400 million that Rwanda got on the Eurobond market since it got the loan in Dollar currency and not a Pound currency.

EAC remains uncertain

Mathu said the loss of value in the Pound Sterling has effects on the commodities, where regional countries are exporting tea, coffee, will gradually decrease because exchanging into dollars also requires purchasing other needed commodities from China and other counties.

"These are short-term; I hope that the long term effects will not be realised since the UK is going to review and discuss the agreement on the trade that she had with the EU and other worldwide partners especially the agreements she had with the member countries of the EU,” Mathu said.

What regional countries can do to minimise the effects of Brexit, the capital markets chief added, is to reduce the trade done in Pound Sterling and preparing new agreements with the British.

”What we can do now is to wait, follow and prepare for discussions so that we can both gain, so that it doesn’t affect the economy and trade among the EAC and UK or EU,” he said.

editorial@newtimes.co.rw