Can AfCFTA stimulate the African service industry?
The recent launched Pan African continental
free trade has been bestowed with a role to stimulate the growth of intra
African trade. One of Africa`s underexploited and under researched industry id
the service sector. With the goal to grow intra-Africa trade AfCFTA has already
concluded on the Protocol on Trade in Services. The AfCFTA Protocol on Trade in Services,
among other things, seeks to create a single liberalised market for trade in
services for the continent. Previous efforts under the existing regional
economic communities failed to fully recognise and support the growth of service
industry in Africa resulting in the concentration on the products and tariff
cuts. The significance of the industry sector cannot be downplayed in Africa
and it requires policy support and political will from the leaders.
The Protocol is the first endeavour to
liberalise intra-African trade in services. Services are essential to
facilitate trade across borders, they are essential for competitiveness in
agriculture and manufacturing – in fact, in all economic activities The 2019
World Trade Report focuses on trade in services. It reports that although
global services trade has expanded significantly in recent years, intra-Africa
trade in services is still low. But various non-tariff barriers (NTBs) ranging
from poor infrastructure to diverging national regulatory policies and market
access restrictions remain a huge obstacle for cross-border trade. This is
particularly true for the service sector, which is at the core of most African
economies but receiving little support. The challenge associated with service
sector in Africa is that of being concentrated in the informal sector and operating
as individuals rather than formal businesses.
We do have to note that there may well be notable informal trade in services in
Africa, for which data is still meagre. Most professional in the service sector
especially in the critical skills have resorted to relocate to European markets
due to failure to attract support from their national and regional policy
makers. The AfCFTA through its Trade in
Services protocol has to work the magic and ensure its implementation result in
the growth of the sector which has the potential to change the lives of
millions of Africans. Such trade is very important from a development
perspective – it matters for livelihoods for many which will benefit directly
or indirectly. Imagine our doctors, engineers, scientists working across Africa
collaborating and merging on specific projects for the industrialisation of
Africa. The service sector has the potential to transform the trade in goods as
countries benefit from this sector. Africa needs to consider seriously the
protocol on free movement of persons if the service sector is to grow.
Without clear regional policies
on the movement of persons it becomes a myth to look forward to the growth of
the service industry. An important element of regulation in the cross-border
supply of services is the mutual recognition of qualifications, educational
standards, licenses or certifications that are granted in another country. This
would allow persons permitted or licensed to practice a certain profession in
one state to practice that profession in the territories of another state. Such
mutual recognition is important to assure the quality or standard of services
not only from a technical perspective, as in engineering services, for example,
but also for broader consumer and business protection. Given the importance of
services for African economies, Trade in Services will be vital to the success
of this historic endeavour. Services are an extremely heterogeneous concept,
ranging from hairdressers and hotels to teachers, accountants or
telecommunication providers. Services are often not sufficiently included in
official statistics, not least because informality is much more widespread in
services than in manufacturing. In
conclusion, services matter for economic transformation, job creation,
competitiveness and development. We need the AfCFTA to consider the Trade in
Services in conjunction with the Protocol on the free movement of persons.
Chiukira Levious
+263773065062
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