Greater mobility is key to regional growth
by Boye Gbadebo,
2014-12-18 08:03:10.0
WITH the rise of neo African nationalism, a question that is seldom raised, but which is key to this continent’s economic development, is the status of work and establishment mobility in sub-Saharan Africa, a region with a drastic skills deficit.
The Ghanaian authorities have recently confirmed the continued closure of foreign-owned shops and the expulsion of the owners, the majority of whom are Nigerian.
This order follows the passing of the controversial Ghana Investment Promotion Act, which excludes foreigners from certain small-scale businesses in Ghana, in contravention of the Economic Community of West African States (Ecowas) treaty.
The Nigerian government, meanwhile, has quietly been deporting tens of thousands of citizens from Cameroon, Niger and Chad — in the largest deportation of people from the country since the mass expulsion of Ghanaians in the 1980s — for what it argues are security concerns in support of its fight against Boko Haram.
Citing concern over security and crime, the Kenyan authorities have arrested scores of migrants mainly from West Africa and the Horn of Africa. Those affected have complained Kenyan police are using security concerns as a pretext for beatings and deportation, which have increased since the Westgate shopping mall attack in 2013.
SA has introduced new immigration measures for Zimbabweans, which could force many to leave either at the end of the year or upon the introduction of the new dispensation, irrespective of how long they have been in the country.
Although the Southern African Development Community has been handicapped by a lack of interest from its member states, mainly SA, other regional blocs have gone some way in their attempts to implement free movement of persons. Citizens of Ecowas countries enjoy visa-free travel within the region for up to three months, after which a permit is required.
The East African Community (EAC) has gone further and introduced the EAC passport, which offers similar rights for up to six months. Citizens of certain countries in the EAC can even move without a passport and are treated as domestic students when studying in another member country.
On one level, the European-imposed straight borders have not prevented traders in Africa informally crossing borders. This perhaps explains the rapid spread of the Ebola virus in West Africa from its index case in Guinea.
Whereas Europeans can generally move to any one of 28 countries in search of new opportunities, or Americans to 50 economically viable states, Africans face considerable barriers when seeking work elsewhere in Africa. Many African governments point to security and internal socioeconomic concerns as justification for continued restrictions. For example, unfettered free movement is likely to be a significant security concern in countries dealing with Islamic militancy such as Mali and Nigeria.
Similarly in SA, with a youth unemployment rate of 36%, free movement of persons from other African countries could quite easily worsen an already volatile socioeconomic situation. Despite relatively strong growth in gross domestic product (GDP) in Africa, economic growth is not keeping pace with population growth, and is resulting in market imbalances and high prices.
Much of the outrage in Ghana recently has been due to the relatively high price of property. In a country where the GDP per capita is only $1,850, the average house price in the capital Accra is $86,957.
A further factor is the discrepancies in GDP per capita and population within regional blocs. Nigeria has both the largest economy and largest population in Africa, and dwarfs those of its neighbours, as does SA’s economy in Southern Africa. Where this disparity in regional GDP engenders fear and xenophobia, it is clearly sensible for governments to control migration through their borders.
Nevertheless, greater mobility within the continent is key to its economic development. As Western countries make it increasingly difficult to penetrate their borders legally, sub-Saharan Africans would undoubtedly prefer to look closer to home for new opportunities, rather than risk death crossing the Mediterranean.
Many countries in Africa have an acute technical skills shortage and increased regional mobility may address the shortage. For instance, a mathematics graduate in SA is likely to choose a more profitable career in banking rather than teaching, whereas teachers in Ghana or Nigeria may prefer to spend time teaching in another country such as SA.
As an example, a country with a weak banking sector can permit bankers from a country with a strong banking system to search for and find work for several years, visa free. In return the country with the weak banking sector may have the right for a certain number of its nationals to establish trading businesses in the other country. The tax base could be increased by tracking money flows and migrants to ensure adherence to local tax laws.
Ebola-struck Sierra Leone has three physicians for every 100,000 people and even SA has a shortage of doctors, particularly in the rural areas. A bold policy of encouraging doctors from other African countries to practise for a limited period in areas where there is a need will help to fill gaps in health systems, provide opportunities and experience for young foreign doctors and at the same time deflect accusations of permanently depriving African health systems of their medical professionals.
In addition, nobody can argue that competition does not drive down costs and lead to greater efficiency. Foreign traders can therefore be a useful inflationary control mechanism.
If governments in sub-Saharan Africa want to encourage the growth of business in the region, they should not view the free movement of goods and people as a threat. Business is after all at its fundamental level about people and the need for such people to create wealth.
• Gbadebo is a director with Aon Capital.
Picture: THINKSTOCK
WITH the rise of neo African nationalism, a question that is seldom raised, but which is key to this continent’s economic development, is the status of work and establishment mobility in sub-Saharan Africa, a region with a drastic skills deficit.
The Ghanaian authorities have recently confirmed the continued closure of foreign-owned shops and the expulsion of the owners, the majority of whom are Nigerian.
This order follows the passing of the controversial Ghana Investment Promotion Act, which excludes foreigners from certain small-scale businesses in Ghana, in contravention of the Economic Community of West African States (Ecowas) treaty.
The Nigerian government, meanwhile, has quietly been deporting tens of thousands of citizens from Cameroon, Niger and Chad — in the largest deportation of people from the country since the mass expulsion of Ghanaians in the 1980s — for what it argues are security concerns in support of its fight against Boko Haram.
Citing concern over security and crime, the Kenyan authorities have arrested scores of migrants mainly from West Africa and the Horn of Africa. Those affected have complained Kenyan police are using security concerns as a pretext for beatings and deportation, which have increased since the Westgate shopping mall attack in 2013.
SA has introduced new immigration measures for Zimbabweans, which could force many to leave either at the end of the year or upon the introduction of the new dispensation, irrespective of how long they have been in the country.
Although the Southern African Development Community has been handicapped by a lack of interest from its member states, mainly SA, other regional blocs have gone some way in their attempts to implement free movement of persons. Citizens of Ecowas countries enjoy visa-free travel within the region for up to three months, after which a permit is required.
The East African Community (EAC) has gone further and introduced the EAC passport, which offers similar rights for up to six months. Citizens of certain countries in the EAC can even move without a passport and are treated as domestic students when studying in another member country.
On one level, the European-imposed straight borders have not prevented traders in Africa informally crossing borders. This perhaps explains the rapid spread of the Ebola virus in West Africa from its index case in Guinea.
Whereas Europeans can generally move to any one of 28 countries in search of new opportunities, or Americans to 50 economically viable states, Africans face considerable barriers when seeking work elsewhere in Africa. Many African governments point to security and internal socioeconomic concerns as justification for continued restrictions. For example, unfettered free movement is likely to be a significant security concern in countries dealing with Islamic militancy such as Mali and Nigeria.
Similarly in SA, with a youth unemployment rate of 36%, free movement of persons from other African countries could quite easily worsen an already volatile socioeconomic situation. Despite relatively strong growth in gross domestic product (GDP) in Africa, economic growth is not keeping pace with population growth, and is resulting in market imbalances and high prices.
Much of the outrage in Ghana recently has been due to the relatively high price of property. In a country where the GDP per capita is only $1,850, the average house price in the capital Accra is $86,957.
A further factor is the discrepancies in GDP per capita and population within regional blocs. Nigeria has both the largest economy and largest population in Africa, and dwarfs those of its neighbours, as does SA’s economy in Southern Africa. Where this disparity in regional GDP engenders fear and xenophobia, it is clearly sensible for governments to control migration through their borders.
Nevertheless, greater mobility within the continent is key to its economic development. As Western countries make it increasingly difficult to penetrate their borders legally, sub-Saharan Africans would undoubtedly prefer to look closer to home for new opportunities, rather than risk death crossing the Mediterranean.
Many countries in Africa have an acute technical skills shortage and increased regional mobility may address the shortage. For instance, a mathematics graduate in SA is likely to choose a more profitable career in banking rather than teaching, whereas teachers in Ghana or Nigeria may prefer to spend time teaching in another country such as SA.
As an example, a country with a weak banking sector can permit bankers from a country with a strong banking system to search for and find work for several years, visa free. In return the country with the weak banking sector may have the right for a certain number of its nationals to establish trading businesses in the other country. The tax base could be increased by tracking money flows and migrants to ensure adherence to local tax laws.
Ebola-struck Sierra Leone has three physicians for every 100,000 people and even SA has a shortage of doctors, particularly in the rural areas. A bold policy of encouraging doctors from other African countries to practise for a limited period in areas where there is a need will help to fill gaps in health systems, provide opportunities and experience for young foreign doctors and at the same time deflect accusations of permanently depriving African health systems of their medical professionals.
In addition, nobody can argue that competition does not drive down costs and lead to greater efficiency. Foreign traders can therefore be a useful inflationary control mechanism.
If governments in sub-Saharan Africa want to encourage the growth of business in the region, they should not view the free movement of goods and people as a threat. Business is after all at its fundamental level about people and the need for such people to create wealth.
• Gbadebo is a director with Aon Capital.
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