Africa’s prosperity depends on free trade and mobility
Both are crucial to economic growth and development but free movement of people is still out of reach.
Regional integration is key for Africa’s prosperity. To achieve it, policies, systems and practices must be adopted to reduce barriers to access, facilitate people’s freedom of movement, encourage intraregional trade and develop joint strategies. Processes brokered by the African Union (AU) aimed at a single African market for goods and services supported by the free movement of people are instrumental.
In 2018, AU heads of state adopted two complementary instruments. The first was the African Continental Free Trade Area (AfCFTA) agreement. The second was the Protocol to the Treaty Establishing the African Economic Community Relating to Free Movement of Persons, Right of Residence and Right of Establishment (Free Movement Protocol).
Establishing a continental economic community in which goods, services and people move freely is regarded as important in addressing Africa’s developmental challenges and realising the aspirations of Agenda 2063. Mobility is thus intimately intertwined with trade. Several progressive continental policies strengthen the aims of the AfCFTA and the Free Movement Protocol. These include the Migration Policy Framework for Africa, the Single African Air Transport Market and the AU Strategy for a Better Integrated Border Governance.
The AU hopes that, by 2023, people will be able to move freely among member countries, by, among others, eliminating visa requirements for intra-African travel. A 2023 target is also set for completing the first two phases of the AfCFTA.
The continent is well on track to achieve the free trade milestone, but free movement of people is lagging. Despite understanding that these elements go hand in hand, the pace of ratification and implementation of the two instruments remains asymmetrical. States show more political will for trade.
Unlocking Africa’s potential through trade
The AfCFTA is anticipated to transform Africa and be a significant driver of economic growth and industrialisation. The United Nations Conference on Trade and Development (UNCTAD) estimates that intra-African exports by the end of 2021 were only 14.4%. Both UNCTAD and the UN Economic Commission for Africa (UNECA) believe that the AfCFTA could change this dramatically.
Africa is well on track to achieve the free trade milestone, but free movement is lagging
UNECA predicts that the AfCFTA could increase exports by 3%, augmenting the value of intra-African trade by between 15% and 25% (US$50 billion and US$70 billion) by 2040. Informal trade is not included in these statistics.
In Africa, informal cross-border trade is significant and widespread. The value of informal commerce may equal or surpass the value of formal trade for specific goods and countries. African borders are frequently crossed by unregistered companies and informal traders, especially women, who buy and sell goods throughout the continent. However, accurate data is still lacking.
In 2021, UNECA estimates found that informal cross-border trade constituted 7% to 16% of all formal intra-African trade flows. Significantly, between neighbouring countries, informal cross-border trade ranges from 30% to 72% of formal trade. According to UNECA, this has important implications for Africa and collecting data on informal cross-border trade will be key to accurately tracing intracontinental trade flows.
For fragile and conflict-affected states, informal cross-border trade is particularly significant as formal trade channels may be adversely affected. The former provides traders with a market outside the fragmented and potentially failing domestic market. However, even as most states are on board for the free trade area, a few major regional players continue to dominate intra-African trade. This has led to concerns about the uneven distribution of gains between middle-income countries and smaller economies, particularly the least-developed countries.
Mobility and free trade
Migration also plays a crucial role in Africa’s regional integration agenda, by contributing to socio-economic development in countries of both origin and destination. Some studies definitively show increased bilateral trade between recipient and origin countries due to the presence of migrants in a country. It is clear that establishing linkages through capital investment, philanthropy, knowledge transfer and entrepreneurship is crucial. The diaspora is, thus, a key resource.
Studies show increased bilateral trade between countries due to the presence of migrants
In addition, regular migration could significantly contribute to the development of host countries by providing them with the experience, knowledge and services they require from both skilled and unskilled labour. While the positive impact of migration and trade tends to tilt towards recipient countries, the resultant trade imbalance for origin countries could be rectified through remittances and direct investment.
A further dimension is that under the AfCFTA, African countries must give each other progressively better access to services within their markets. In 2018, African member states agreed on five priority services as the starting point for engagement. These are financial services, communication, transport, tourism and business services. By September 2022, initial offers on the trade in services had been received from 43 countries. This means that the continent is on course to finalising this essential element of the process.
Why free movement?
The AU’s Migration Policy Framework and the African Common Position on Migration and Development articulate clearly that Africa can advance economic development through better migration management and governance. For the AU, member states and regional economic communities (RECs) need to formulate policies that use migration for development.
While the Free Movement Protocol is a continental agreement, its effective governance and implementation are national and regional. Already many African countries have participated through RECs in freedom of movement declarations and, thus, are aware of the responsibility that comes with freedom of mobility. For the protocol to be successful, the agreement must be translated and contextualised to take into account domestic realities and the long-term strategy of the continent (and its member states).
This includes ways in which its implementation can help to build resilience in Africa for unanticipated mobility and support the transition to a borderless continent. It also extends to providing a framework for policy coherence on the digitalisation of civil registers and helping to meet the long-term aspirations of ‘making Africa a home’. Still, progress on ratifying and implementing the protocol is slow – slower than that for the AfCFTA.
Understanding the asymmetry
African states have been reluctant to adopt the Free Movement Protocol compared to the AfCFTA for four main reasons. First is the concern around mass migration from less developed countries into more developed, middle-income African countries. Experts interviewed by the Institute for Security Studies shared this concern.
Concerns remain about mass migration from less developed countries to middle-income countries
Still, experts emphasise that focusing on the negatives detracts attention from the gains that migration brings to recipient countries and how it provides migrants with the opportunity for better lives. A differential and gradual streamlining of fiscal and labour market and immigration policies that foster migrant integration is necessary.
Second, some states are concerned about state sovereignty and undocumented migrants, and that free movement could propel insecurity. While some of these worries are unfounded, they should not be overlooked in rolling out the AfCFTA and, eventually, free movement, as they hamper states’ willingness to proceed.
Third, with the COVID-19 pandemic having wreaked havoc on economies, calls to prioritise citizens over migrants have gained momentum. In this scenario, while the AfCFTA promises recovery from the pandemic and rebuilding of Africa’s resilience, the Free Movement Protocol is seen as an impediment.
Fourth, states are encouraged to relent on border regulation and control without corresponding robust protective structures. Developing essential infrastructure to ensure that members experience equitable gains from the AfCFTA and the protocol is important. Key threats such as terrorism, violent extremism, human trafficking and money-laundering are enduring challenges with which many African states are grappling.
Free movement without corresponding regulatory measures to mitigate risks is seen as a challenge rather than an opportunity. Key would be developing a robust digital identification system that allows states to efficiently trace the mobility of people.
It’s clear that the AfCFTA and the Free Movement Protocol have great potential as conduits for long-term development in Africa. Commitment to implementing both frameworks concurrently would yield economic and development gains for the continent. However, the current dissonance between the adoption of the two is symptomatic of the continent’s ongoing policy development and implementation crisis.
States will need to ramp up their efforts on both fronts. This must include accelerated ratification, adoption and implementation of mobility regime regulations, policies and protocols by the AU and RECs. The Free Movement Protocol is a good start.
Image: © AFP
