Monrovia, Liberia – The African Continental Free Trade Area (AfCFTA) creates a single continental market for goods and services in Africa. It further aims to reduce trading problems such as different regulations from one African country to another.
The AfCFTA is the world’s largest free trade area bringing together the 55 countries of the African Union (AU) and eight (8) Regional Economic Communities (RECs) to create a single market for the continent.
In promoting the continent, AfCFTA outlined four points in it message at the ongoing conference in Ethiopia. First message, the first general objective of the AfCFTA as articulated under Article 3 (a) of the Agreement is the ‘creation of a single market for goods, services, facilitated by movement of persons’.
What this means is that realizing the objectives of the AfCFTA hinges on free movement of persons. This can be achieved through the liberalization of movement of categories of people who are critical for the movement of goods and services. These include professional businesses and intra corporate transferees.
In this respect, free movement of people is a natural complement of trade liberalization under the AfCFTA. It is impossible to envisage a successful liberalization of trade under the AfCFTA without the free movement of these categories of people. Let us take the case of liberalization of professional services. How will that be achieved if professionals cannot move freely across our continent?
What is therefore needed is for State Parties to the AfCFTA Agreement and Protocols to move swiftly with the implementation of their schedule of specific commitments. Related to this is that for dynamic trade in services under mode
Secondly is to take place under the AfCFTA, there is need for free movement of persons. Despite the emergence of digital delivery services in the health and education sectors, there are still many instances where people still need to move freely to consume services. Also, sectors like tourism cannot thrive without free movement of persons.
The experience of COVID-19 pandemic teaches us that Africa needs to reduce its overdependence on international tourism by promoting and increasing intra-African tourism, which currently represents approximately 45 to 48% of total tourist arrivals according to the United Nations Economic Commission for Africa.
This performance is low when compared with other regions and major economies. The figures are 92% for China; 80% for Europe; and, 60% for the Americas. Similarly, if Africa wants to harness the potential of medical, tourism, which is projected to grow globally at an annual rate of12% from 2023 to 2032, with revenues increasing from US$115.6 billion in 2022 to an estimated US$346 billion by 2032, our Member States will need not only to build the required infrastructure; but also, to facilitate free movement of people.
The African Development Bank estimates that Africans spend more than US$1 billion a year on medical services in other continents. Some of these resources could be spent within the continent if free movement of persons was facilitated.
The second message is this: as African countries harness the potential of the AfCFTA and achieve higher levels of economic growth, the African middle class will continue to expand. One of the initiatives we are working with the AfDB and AUDA-NEPAD to ensure Africa achieves high level of economic growth, is a Strategic Framework on Key Actions to Achieve Inclusive Growth and Sustainable Development in Africa. This Strategic
Framework will be presented to the Assembly of the African Union Heads of State and Government this weekend. An economic modelling in the Strategic Framework shows that it is possible for Africa to attain progress. Africa’s GDP per capita, measured at international prices, was around $4,800 in 2023.
The econometric model assumes a 5 percent annual growth from 2023 to 2033, 8 percent growth from 2033 to 2053, and 6 percent growth from 2053 to 2063. This provides time for growth to rev up, then move into a high growth phase, then attain modest deceleration. This would general Gross Domestic Product per capital of US$65,000 in 2063, with aggregate Gross Domestic Product of US$160 trillion.
With high level of GDP per capita, the African middle class which was estimated at 350 million in 2018 and projected to reach 600 million by 2030, will be eager to freely move across the continent to consume services and goods offered in other parts of the continent and generate higher levels of continental output.
The third message is this: beyond the AfCFTA which is merely a Free Trade Agreement, what is needed to accelerate free movement of persons across Africa is to move to the next stage of African economic integration, particularly the African Common market, as envisaged under the Abuja Treaty of 1991.
As we all know from economic theory, one of the pillars of a common market is the free movement of all the factors of production, including labour. As earlier indicated, the continental legislative framework to facilitate that movement, which is the Protocol to the Abuja Treaty Relating to Free Movement of Persons, Right of Residence and Right of Establishment, is already in place. Let me point out that this Protocol just needs 15 ratifications to enter into force, which is as provided in Article 33 (1) of the Protocol.
Regrettably, we are still stuck at with four ratifications (Mali, Niger, Rwanda and Sao Tome and Principe) and 32 signatures. We completed a Readiness Assessment Towards the African Common Market/Customs Union, in line with the Decision of the32nd Ordinary Session of the African Union Assembly of 10 to 11 February 2019.
This assessment was considered by African Ministers responsible for integration, and a report will be presented to the upcoming Assembly of Heads of State and Government. The findings are compelling: Africa needs to move towards a common market as soon as possible, to shield the AfCFTA from the danger of trade deflection associated with third party agreements involving individual AfCFTA State Parties.
More importantly, moving to a common market will help Africa achieve a greater level of policy harmonization, free circulation of all the factors of production, as well as development of regional and continental value chains, all of which are crucial for deeper economic integration. Other important pillars of a common market which have a bearing on free movement of persons, is competition policy and intellectual property rights.
With an effective competition policy, the cost of travel across Africa, which is quite high at the moment, will become more competitive and enable millions of Africans to move around as budget airlines spring up.
My fourth and final message is this: beyond the legislative and policy framework on free movement of persons, there is an urgent need for appropriate facilitation measures, whether soft or hard, to facilitate free movement of persons. With respect to soft infrastructure, digitalization provides a huge opportunity to address some of the current challenges.
The first challenge is the lack of ID. Millions of Africans still do not have ID, which is a prerequisite to move freely. The second challenge is lack digitalization of immigration services. This challenge raises the issue of ambiguities and lack of clarity associated with travel requirements to facilitate movement across Africa.
Digitalization will also help curb the lengthy visa processing time, which more than often discourages those who really want to move across the Continent.With respect to hard infrastructure, airports, roads and railways improvement across the continent is very much needed.
These are areas where my sister, the CEO of AUDA-NEPAD, working in collaboration with my colleague in the Department of Infrastructure of Energy, and with funding from the AfDB, should prioritize. We need to make more progress on some of the continental projects such as the trans-African highways (Cairo to Cape and the Dakar to Mombasa) to facilitate free movement of persons.
