The African Dream: Overcoming Challenges in Intra-African Trade and Free Movement

Intra-African trade and free movement remain significant pillars of Africa’s economic integration, but realizing their full potential has proven challenging. In a recent interview with Ziad Hamui, the National President of Borderless Alliance in Ghana, critical insights were shared on the obstacles and opportunities that lie in Africa’s journey towards seamless trade and mobility. As Hamui explains, the African Continental Free Trade Agreement (AfCFTA) and the African Union’s Free Movement Protocol (FMP) are key agreements that aim to boost trade and the movement of people across the continent, yet implementation gaps and deep-rooted perceptions pose barriers.

Historical Context: The African Dream of Free Movement

Long before colonial borders were drawn, Africans moved freely across the continent, trading and connecting. Fast forward to today, the African dream of freedom in trade and movement seems elusive. As Hamui notes, despite 48 countries signing the AfCFTA, only four have signed the FMP. This disparity reveals the deep-seated fears surrounding the free movement of people, as compared to goods. Many Africans still view those from neighboring countries as foreigners, a mindset that inhibits continental integration.

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Obstacles to Trade and Movement

One of the major issues hampering intra-African trade is the lack of seamless border operations. Hamui discusses how even high-profile figures, like Africa’s second-richest man Aliko Dangote, have faced difficulties in obtaining visas to travel across the continent. For regular traders, illicit payments and bureaucratic red tape further complicate the process of crossing borders. This creates a paradox where Africa promotes free movement, yet in practice, significant barriers persist.

Moreover, Hamui emphasizes the economic inefficiencies caused by these barriers. Traders often face high costs when exchanging local currencies for international ones like the dollar, which adds to the financial burden of cross-border transactions. To address this, the AfCFTA is working on initiatives like the Pan-African Payment and Settlement System (PAPSS), allowing businesses to transact in their local currencies, reducing reliance on third-party currencies, and cutting transaction costs.

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Formalizing Africa’s Informal Economy

Another critical issue that Hamui touches on is Africa’s vast informal trade sector. Informal trade accounts for a large portion of cross-border commerce but is often left out of official statistics. If properly accounted for, the volume of intra-African trade could be as high as 30%, significantly higher than the 15% recorded. Formalizing these informal sectors can increase economies of scale, lower costs, and boost competitiveness across the continent. By reducing trade costs, African businesses will be better equipped to compete both regionally and globally.

Free Trade Isn’t Truly Free

Despite the focus on free trade, Hamui reminds us that “free” doesn’t mean without cost. While the AfCFTA aims to reduce tariffs, traders still face a range of fees, including transportation, inspection, and regulatory charges. These non-tariff barriers continue to drive up costs, and only through ongoing negotiations and policy harmonization can these obstacles be minimized. Ultimately, African countries need to strike a balance between protecting local industries and opening up their markets to benefit from increased trade opportunities.

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The Way Forward: Engaging Stakeholders and Building Trust

One of the most important takeaways from Hamui’s discussion is the need for African governments to engage with their citizens. Without grassroots support, policy implementation will falter. Public buy-in is crucial, as people must understand that the free movement of goods and people will bring economic benefits to all. As Hamui highlights, educating the population and aligning policies with local interests are key steps toward achieving Africa’s broader economic goals.

Conclusion

The African dream of a unified continent, with free trade and movement, is attainable, but requires overcoming deeply ingrained challenges. Ziad Hamui’s insights shed light on the complex dynamics at play, from formalizing informal trade to reducing non-tariff barriers and engaging citizens. The AfCFTA and FMP are vital agreements that can unlock Africa’s economic potential, but their success hinges on the willingness of all stakeholders—governments, businesses, and citizens alike—to embrace change and work toward a common future.

Watch the full interview with Ziad Hamui for a deeper understanding of these issues and the steps Africa needs to take to turn this dream into reality: Watch Now.

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