By Belinda Chanda
At times like this, analysts and critics search for the right phrase to capitalise on their following. So far, watershed, landmark and game changer have been used to describe the Africa Continental Free Trade Area (AfCFTA). Unsurprisingly, the majority of Africans whom this agreement affects, are unaware of the radical facelift the continent is about to undergo. “The Africa We Want”, a phrase that the current chair of the African Union (AU) re-states at every opportunity, sends a clear message that Africa means business.
The AfCFTA is undoubtedly a turning point under the AU’s 2063 reform agenda in pursuance of “integrated and inclusive economic growth and development”1 for the continent. It is a vision embedded in horizons devoid of borders and tariffs. The free movement of people, goods and services takes a leaf from the European Union’s 50 year blue print for creating a custom free and borderless economic zone. But not without its challenges.
The AfCFTA was, to put it mildly, a significant agenda item of the 10th Extraordinary Summit of the AU on 21st March 2018. This, in addition to the Protocol on the Free Movement of Persons and the Kigali Declaration, making it a trifecta of audacious steps towards the establishment of these “United States of Africa”. All this against the backdrop of creating an integrated regional economy in the way Zambia’s Kaunda, Ghana’s Nkrumah, Kenya’s Kenyatta and other visionary pan-Africanists intended. This is perhaps, an entry point to dispersing the continents own soft power for the shared purpose of sustained economic growth and prosperity.
AfCFTA obviously matters because of its economic imperative by simply putting into motion real action aimed at increasing intra African trade. When compared to the regions with whom the continent trades, statistics show that intra African trade stands at a dismal 16 percent, while that of Europe and Asia stand at 71% and 50% respectively. The status quo is a definite point of concern given the continents vast resources (human and natural) that can be further harnessed in order to sustain its comparative and competitive advantage within the global trade regime.
The long term success of AfCFTA will, as discussed at length, require the revitalization and establishment of Africa’s manufacturing and value addition base in which Small and Medium sized Enterprises (SME’s) can emerge, develop and thrive. History dictates that trade is a strong enabler for industrialization and is precisely what Africa needs to achieve a level of development that provides a fair sense of dignity for its people. An industrialised Africa if anything, will make the continent a force to contend with as AfCFTA threatens to become the largest global trading block since the creation of the WTO. With Africa’s 1.2 billion people, economies of scale provide a sound investment basis for the expansion of business opportunities.
The jobs agenda features prominently in the AfCFTA and this is rightly so. According to the 2018 World Employment Social Outlook (WESO) report of the ILO, unemployment trends for the continent will remain unchanged in 2018 at 7.9% due to “sluggish improvements in growth”2. This constitutes an estimated 40 million unemployed people. The WESO goes further in its analysis to state that, “the region has the highest rate of vulnerable employment globally”. 290 million African workers to be precise mainly in the informal economy and in precarious work, to say the least 3.
If implemented in letter and spirit, AfCFTA might serve to reduce the continents unemployment gap through strategic, policy and legal measures that facilitate the creation of “decent work”, not least for women and youth.
The take off point for AfCFTA is promising given the efforts made by the eight Regional Economic Communities (REC’s) to improve intra African Trade despite the complexity of these frameworks. It is hoped that AfCFTA will systematically take care of the challenges related to overlaps and multiple membership to RECs, competing priorities and the general challenges of integration. And while there might be some inertia among the larger economies of the continent in signing up to AfCFTA, hope lies in the fact that a monumental step has been taken, reflecting the political will and commitment that of the first 44 signatories. It should be pointed out and as proven in the process, the voice of Worker and Employer organizations is a key factor in AfCFTA’s success.
But what does this mean for an entity such as the International Labour Organization (ILO), which for the last 99 years has been at the forefront of promoting social justice and is now leading discussions on the Future of Work ahead of its centenary? Undoubtedly, there are numerous opportunities for the ILO to rally its technical assistance around its four strategic objectives of employment, rights at work, social dialogue and social protection by unbundling the critical aspects of AfCFTA.
Within the context of ILO’s already established relationships with the AU and the REC’s, this author identifies three intervention points from a trade for development perspective including:
1. The promotion of fundamental principles and rights at work and in particular, ensuring a clear understanding of obligations in implementation and reporting on International Labour Standards (ILS). While this is the ILO’s front end agenda, ILS compliance will be particularly important in supply chains for the continent to remain globally competitive. Supply chains such as agriculture and extractive sectors (e.g. mining, gas, oil etc) where the gains from AfCFTA are foreseen, are critical in this regard but remain tricky in their lower tiers. Thus, robust sectoral analyses on employment intensity, how productivity gains can be achieved and where decent work deficits can be addressed in compliance with ILS (and environmental standards) are points for serious consideration.
2. As job creation features high on the list of priorities of AfCFTA, developing skills for trade and economic diversification should be an area of focus. This provides opportunities to harness the large number of entrants in the continents labour force. Thus, AfCFTA might provide a basis for countering the youth (un)employment challenge faced by the continent which is home to the world’s youngest population, an estimated 200 million youth aged between 15 and 24.
The ILO is the custodian of STED, a program under which this sub point is framed and is designed “to support growth and decent employment creation in sectors that have the potential to increase exports and to contribute to economic growth and development.”4 From Malawi to Myanmar, STED has proven to be a worthwhile endeavour and AfCFTA provides the platform for its roll out;
3. A continued effort to strengthen the governance of labour migration across the region by promoting fair recruitment practices could perhaps be among the important aspects of the AfCFTA. According to the ILO, 150 million labour migrants today face exploitation, discrimination and violence and the absence of basic protections among which human trafficking is rife 5.
The Joint Labour Migration Programme (JLMP), a joint collaboration of the AU, ILO, International Office of Migration (IOM) and the UN Economic Commission for Africa (UNECA) designed to “facilitate the accelerated implementation of the AU Migration Policy”6, provides a basis for further expansion under which comparable data has already been generated on labour migration trends across the region. According to the Report on Labour Migration Statistics for Africa (2015) produced under the JLMP, “international migration in Africa rose to 15.9 million migrants from 2008 to 2014. Out of the 15.9 million migrants in 2014, there were 8.3 million migrant workers (4.7 million males and 3.6 million females)”. With the coming into effect of the Protocol for the Free Movement of Persons, these numbers are bound to increase. Thus, safeguards that mirror the tenets of Protocol 29 to The Forced Labour Convention, 1930 which “emphasises the urgency of eliminating forced and compulsory labour in all its forms and manifestations”7 , will be critical.
Among the common areas of intervention for the governance of labour migration include the development of codes of conducts for recruitment agencies, awareness/advocacy on the risks associated with labour migration for would be migrant workers and countries of destination, improved access to justice, return and re-integration, social protection etc. should be well established on a continuum. On a related note, ensuring the portability of skills across the continent through common qualification frameworks will match the intention of the free movement of persons and will serve to increase employment opportunities.
That said, the AfCFTA is without doubt a clarion call for Africa to reclaim its destiny and move to the next level by harnessing the benefits of free trade as great empires have done in the past, not least the British Empire of the 18th Century and the 17th Century Mughal Empire. And how opportune, given that the AfCFTA comes in the advent of great technological advancement, that innovation can be leveraged to increase efficiency and effectiveness as well as an abundance of examples and lessons learnt from the experience of other FTA endeavours. What’s more, AfCFTA clearly recognises the concerns related to the different levels of economic development among African states, the absence of a strong industrial base, as well as the institutional and governance challenges faced by the continent. However, all progress is defined by an initial attempt to foster change.
One has to admit that Africa has reset its eye on the prize of wealth creation. In fact, by fielding such a bold framework, the continent has categorically refused to win the race to the bottom.
The author is a Harvard Kennedy School of Government Edward Mason Fellow ’17, Economist and Public Policy Analyst. Belinda is currently working for the ILO Country Office in Pakistan
5 http://www.ilo.org/global/about-the-ilo/how-the-ilo-works/ilo-director-general/statements-and- speeches/WCMS_618011/lang–en/index.htm