…The continent is promoting free trade and free movement
By Landry Signé
THE world seems to be moving away from multilateralism. The United States has withdrawn from the Trans-Pacific Partnership and the Paris agreement on climate change, attacked the World Trade Organization, and threatened to start several trade wars. The United Kingdom is negotiating a messy exit from the European Union. But one place is bucking the trend. Over the past decade, Africa has moved rapidly toward regional integration. A series of initiatives, including the launch of the African Union Agenda 2063 (a shared road map for the integration and socioeconomic transformation of Africa by 2063), the promised African Union passport, the new Single African Air Transport Market, closer integration by most of the region’s economies, and the signing of the African Continental Free Trade Area (AfCFTA) reveal the strength of Africa’s regional and continental institutions.
Yet despite this progress, some observers remain pessimistic about the prospects for African integration. They point to past initiatives such as the Organization of African Unity and the Lagos Plan of Action, which looked good on paper but did not go far in practice, to suggest that today’s progress will be equally fleeting. They are misguided. Progress has accelerated in recent years and polls show the continent’s people generally support the idea of integration. Challenges remain, but the prospects for cooperation in Africa are rosier than they have ever been. Even a little progress, moreover, will do a lot of good for millions of people.
Across Africa, governments and regional bodies have begun to implement policies to allow the free movement of people, which is critical for fostering international business. Africans can now travel without a visa or obtain a visa on arrival in at least 30 of the continent’s 55 countries. In 2016, in what may prove to be the most important development, the African Union launched the African passport, which is intended to allow visa-free travel throughout the continent. Although it is currently available only to high-ranking African officials, the AU has vowed to extend it to all Africans by 2020.
Achieving that will not be easy. African states have greatly varying capabilities, and only some have access to the biometric technology necessary to make the passports work. What is more, not every country is willing to adopt the passport, as the move entails foregoing substantial visa revenues, an important source of income for many governments. Critics also worry that increasingly open borders could strengthen terrorist groups and organized crime. Yet these problems will not necessarily doom the effort. Most likely, the passport will be adopted by a majority of countries (although the 2020 deadline may slip) with others negotiating special conditions in the same way that some EU countries opted out of or entered a limited version of the Schengen Area.
Even if the implementation of the African passport is delayed, governments on the continent are already trying to promote the free movement of people in other ways, as well. This January, for example, the AU launched the Single Air African Transport Market, which is intended to lower travel costs—currently prohibitively high for many travelers—by creating a common regulatory framework for the African skies. The SAATM will encourage more regular flights between African cities, replacing trips that currently often involve layovers in Europe or the Middle East. That should boost the aviation sector, tourism, and trade. A recent study by the International Air Transport association found that “if just 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs and $1.3 billion in annual GDP would be created in those countries.”
If successful, the SAATM could mirror the European Union’s Internal Market for Aviation, which has increased air safety and improved competition between airlines, lowering fares. So far, 23 countries have signed up to join the SAATM, including the economic powerhouses of Côte d’Ivoire, Ethiopia, Kenya, Nigeria, and South Africa. But for the SAATM to be truly successful, all African countries will have to adopt it. The AU is working to get the remaining 32 AU countries on board and, in the meantime, to create a shared African sky infrastructure, including unified air traffic controls and cooperation between airlines over fleet management, by 2023, in countries that have already signed up to the initiative.
The launch of the AfCFTA this year has the potential to transform economies of several African countries by creating a single, continent-wide market for goods and services as well as a customs union for the free movement of capital and of business travelers. To that end, the 44 countries that have signed the AfCFTA have committed to removing tariffs on 90 percent of the goods that they trade with one another.
That is all to the good, as there is much room for improvement when it comes to trade within Africa. In 2016, exports to other African countries made up 18 percent of total African exports, compared with 59 percent and 69 percent in Asia and Europe, respectively. The figures for imports are similar. There has been a slight improvement in the proportion of exports going to other African countries over the past ten years, but the share of imports from within the continent has remained stagnant, despite an increase in the total volume of imports as well as in aggregate trade. That is where the AfCFTA comes in. According to the UN Economic Commission on Africa, trade among African countries is set to increase by 52.3 percent under the AfCFTA and will double if all African countries join and thus succeed in removing even more non-tariff barriers. By promoting trade within Africa, the AfCFTA will also foster more competitive manufacturing sectors and promote economic diversification. Other initiatives aimed at regional integration have already boosted trade and manufacturing. Africa has a number of regional economic communities—the building blocks for the pan-African economy—that have been liberalizing trade among their members. The results have varied, but from 2006 to 2016, each regional community saw the share of total exports that its members sold to one another grow (although the same cannot be said for imports). Because African countries trade more manufactured products with each other than they do with the rest of the world, the rise of intracontinental trade is accelerating the development of the Africa’s manufacturing sector, which creates well-paid jobs and protects economies from external shocks.
The road ahead
For African integration to live up to its potential, the continent’s institutions must mobilize sufficient financial resources to make themselves autonomous so that they can properly represent all the citizens of their member countries rather than foreign interests. The AU took a major step in this direction when, in 2016, the group’s leaders decided to implement a 0.2 percent levy on some imports to finance the institution. Regional African communities will also need to develop governance systems that include better mechanisms and incentives to encourage compliance. For example, they could impose proportionate fines on noncompliant countries.
As advanced countries move away from multilateralism, African countries are coming together to increase economic and financial integration; promote the free movement of people, goods, and services; and increase intraregional trade. The trend is not an ephemeral one. It started decades ago and is likely to accelerate in the coming years as African leaders have become ever more committed to cooperation. That desire, moreover, is shared by their citizens, who, according to a 2014/2015 Afrobarometer survey, on average have positive views toward their regional economic communities. The United States and the EU should learn the lesson of Africa’s progress: international cooperation based on popular support and tangible results still has much to offer countries everywhere.
Confidente. Lifting the Lid. Copyright © 2015