“banner728.gif"

African Continental Free Trade Area: The potential to facilitate trade by easing mobility of people

[By Johannes Kgotso]

On 07 July 2019, African countries took a bold step when they officially operationalised the African Continental Free Trade Area (AfCFTA) at the 12th Extraordinary Summit of the African Union (AU) in Niamey, Niger. Once fully implemented, this flagship project of the AU’s Agenda 2063, the continent could become the largest single market covering up of 55 countries, 1.5 billion people with a combined GDP of $2.5 trillion.

It is important to note that AfCFTA is aimed largely at fostering intra – regional trade in Africa. According to the Brookings Institute, intra-regional trade in Africa accounts for 17 per cent of exports compared to 59 per cent in Asia and 69 per cent in Europe. The aim is to reach 50 per cent intra-regional trade as a share of the African trade by 2050. This shows that when compared with other economic blocks, African countries do not trade with each other as much as they should and AfCFTA may be a panacea in this regard.

For the intra-regional trade to be expanded and successful in the continent, mobility of people, especially business travelers will be important. There will be a need for tried and tested options to be adopted.

The agreement establishing the AfCFTA will be implemented in phases. Phase 1 entails, among others, trade in goods and services, tariff liberalisation, non-tariff and dispute settlement. Phase 2 will cover aspects such as competition policy, intellectual property rights, investments and movement of business persons across borders. The agreement is to have trade happening by July 1, 2020.

Implementation of the protocols for free movement of people will certainly be beset by many obvious impediments such as security concerns, local labour market needs, socioeconomic disparities and fear of health epidemics that would require the leaders to be accommodating, mindful and pragmatic in ensuring its success.

As mobility of people is critical for attaining the vision of the agreement, countries normally must ensure that the pact has the provisions covering the rendering of critical services and some aspects of immigration. In the case of AfCFTA, these services are expected to entail, among others, banking, tourism, finance and information communication.

Several options are worth considering on easing mobility of people whilst the AU Protocol on Movement of People is being ratified. Visa on arrival remains the best option available to African countries. It has been implemented with good results in Rwanda and Ghana. It is very cost – effective to implement. With new tools to manage immigration like advanced passenger processing, it works efficiently and effectively. For this option to be effective, it must be anchored on cooperation in ensuring that those who may affect national security do not benefit from it.

Second is the development of specific options to cater for activities that require skills unavailable locally to be accessed by those within the continent albeit with minimum requirements. This option may entail Short Term Work Permit, an option that has been developed by countries like Nigeria, South Africa, Mozambique and Ghana. This allows business to leverage skills and experience available in one region for the benefit of another, and in the process creates an environment for skills transfer and development to occur in the location. Furthermore, companies often face the challenge in accessing skills and experience related to their proprietary products and services. A classic solution to this exists in many countries around the world which offer intra-company transfer permits that enable movement of people with such unique proprietary knowledge and skills within companies through an intra-company work permit or visa. This would be especially beneficial in the context of the AfCFTA to African companies including many emerging innovative start-ups that have had success in a local market but are seeking to grow their footprint across the continent.

Finally, the example of the ECOWAS permit amongst West African nations stand out as an example of eased work-related mobility provisions that enable those states to access a much wider skills base with relative flexibility. Broadening such provisions, taking into account availability of skills in individual countries, will enable further exchange and growth of trade within the continent as a whole.

For AfCFTA to have the intended impact, the options alluded to above need harmonisation of rules on mobility of services especially on business travellers and those seconded to subsidiaries in other countries in the continent. Additionally, political will, will also be needed to ensure that mobility of people with skills is effective and access to immigration related services is improved through the introduction of new technology.

Johannes Kgotso Tiba is a Senior Manager for Africa Co-ordination Centre at Fragomen Africa in Rosebank, South Africa. His area of expertise is immigration into the sub-Saharan Africa, including South Africa.

Leave a Reply

Your email address will not be published. Required fields are marked *