On July 7, the African Continental Free Trade Area (AfCFTA) officially came into operation at the 12th Extraordinary Summit of the African Union in Niamey, Niger. With this flagship project of the AU’s Agenda 2063, the continent could become the single largest market, covering 55 countries, 1.5 billion people and a GDP of $2.5 trillion.
AfCFTA is aimed largely at fostering intra-regional trade in Africa. According to the Brookings Institute, intra-regional trade accounts for 17 per cent of exports in Africa, 59 per cent in Asia and 69 per cent in Europe. AU’s targets 50 per cent intra-regional trade as a share of the continent by 2050.
Compared to other economic blocs, African countries do not trade with each other as much as they should and AfCFTA may be a panacea in this regard. And expansion and success of intra-regional trade in Africa will depend on mobility of people, especially business travellers.
AfCFTA will be implemented in phases. Phase 1 entails, among others, trade in goods and services, tariff liberalisation and 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 aim is to be trading by July 1 next year.
Implementation of the protocols for free movement of people will certainly be beset by impediments such as security concerns, local labour market needs, socioeconomic disparities and fear of health epidemics, that will require the leaders to be accommodating, mindful and pragmatic.
As mobility of people is critical for attaining the vision, countries must ensure that the pact covers the rendering of critical services and aspects of immigration. These services are expected to entail, among others, banking, tourism, finance and information communication.
The AU Protocol on Movement of People is being ratified. Having been implemented with good results in Rwanda and Ghana, visa on arrival, which is cost-effective to implement, is the best option for Africa. With new tools to manage immigration, it works efficiently and effectively, while protecting national security.
Second is the development of specific options to cater for activities that require skills not available locally to be accessed by those within the continent, albeit with minimum requirements. This may entail Short Term Work Permit, which has been developed by countries like Nigeria, South Africa, Mozambique and Ghana. It allows business to leverage skills and experience available in one region for the benefit of another, creating an environment for skills transfer and development.
The Ecowas permit amongst West African nations stands 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 countries, will enable further exchange and growth of trade within the continent as a whole.
But for AfCFTA to have the intended impact, these options need rules on mobility of services to be harmonised. Additionally, political will will be needed to ensure easier mobility of skilled people through the introduction of new technology.
Mr Tiba is a senior manager for Africa Co-Ordination Centre at Fragomen Africa in Rosebank, South Africa. [email protected]