The Impact of Migration on Free Trade in Africa

Introduction

Migration is a ubiquitous phenomenon in Africa. It is a complex phenomenon with multiple implications for the continent. While these population movements are often perceived in a negative light, they play a crucial role in regional economic dynamics and are potentially an engine of growth and economic development on the continent (Hein de Haas, 2010). According to the African Migration Report (2020), Africa accounts for 14% of the world’s migrant population, compared with, for example, 41% from Asia and 24% from Europe. Over 80% of migration takes place within the African continent, accounting for around 20 million migrants (ALREI, 2023).

This human mobility has profound repercussions on trade, economic integration, and socio-economic development (Cogneau & Tapinos, 2000). With millions of people on the move every year, migrants contribute to trade facilitation, acting as intermediaries between markets. They bring diversified skills, stimulate innovation, and foster economic growth (Tremblay, 1998). However, this dynamic also presents significant challenges, particularly in terms of managing migratory flows, protecting workers’ rights, and preventing social tensions. Thus, it is essential to explore how these migratory flows influence the dynamics of free trade in Africa while encouraging greater economic integration. This policy brief explores the impact of migration on free trade in Africa, analyzing the economic opportunities and obstacles to be overcome for successful regional integration.

i. Facilitating trade

The African Continental Free Trade Area (AfCFTA), which came into force in 2021, is designed to facilitate the movement of goods and services between its member states. This also implies the movement of people, and consequently a meeting of African peoples. The movement of people has always shaped the African landscape, particularly through the continent’s abundance of human capital. The gradual implementation of free trade (within the regional economic communities) and then within a broader framework under the FTAA region will enable us to capitalize on this human capital. Indeed, one of the main challenges of a free trade zone is human mobility. In one of its reports, the African Union recognized the benefits of human mobility within the ZLECAF framework. It stated that the implementation of the free trade zone would accelerate growth and intra-African trade (African Union Report on Agenda 2063-2019).

Human mobility is, therefore, a source of economic spin-offs for host countries and necessarily implies labor mobility. In its database, the International Organization for Migration (2022) points out that in Africa, the West Africa sub-region is characterized by a high level of mobility. In 2020, just over 7.6 million migrants were living in this geographical area. Côte d’Ivoire alone hosted over 2.6 million migrants, followed by Nigeria, with 1.7 million (IOM Report, 2021). These massive population movements are partly linked to the removal of obstacles to population movements between member states of the Economic Community of West African States (ECOWAS) (IOM Report, 2021). These migrants, although much more active in the informal sector, also participate in the economic growth of the host country, working in various sectors of the economy.

ii. Remittances and investment in Africa

According to data provided by Cameroon’s Ministry of External Relations, the country has just over 5 million of its citizens living abroad, scattered throughout the world. This figure includes Cameroonians living in other African countries, with Gabon, Chad, and Nigeria as the main destinations (AFFORD 2020). According to a World Bank report (Remittances Brave Global Headwinds Report, 2022), this diaspora would have sent more than $365 million to

Cameroon by 2022. This would have contributed 0.8% of Cameroon’s GDP. These figures reveal the importance of migration both for their families and for their country of origin in general. The same applies to all other Africans. According to a World Bank report (2022), migrant remittances to sub-Saharan African countries increased by 6.1% in 2022 to $53 billion.

However, these funds are often not well-directed and often do not benefit their recipients in the long term. It is therefore necessary to develop a policy to support the more profitable use of these funds. The IOM recommends that governments reduce the cost of remittances to encourage diasporas to send money without constraint. But they must also limit the procedures involved, which are often a source of discouragement. What’s more, in addition to the direct transfer of funds, the diaspora could save this money or finance investment projects in their home countries. However, the main criticism leveled at African countries is that they do not have a precise figure for the percentage of their population who are immigrants and are therefore unable to assess the financial flows from this foreign population clearly and accurately (ACPOBS, 2011).

iii. Skills and technology transfer

In Africa, more than 80% of labor migration flows by African nationals are intraregional and take place on the African continent (ALREI, 2023). These internal migrations play a key role in skills transfer, as workers take their knowledge and technologies with them when they move to other African countries. Indeed, countries such as Morocco, Kenya, South Africa, and Rwanda, considered regional hubs for technology and innovation, export their skills to other countries thanks to workers qualified in engineering, ICT, and entrepreneurship (Geraldo, 2023). In Rwanda, for example, welcoming skilled migrants has boosted its ICT sector, helping to make the country a regional leader in technology (Rauline, 2017).

In addition, the FTAA, which aims to create a single market of over a billion people, would promote the free movement of goods, services, and people, an essential condition for boosting innovation and competitiveness in Africa. Thanks to the FTAA, trade, and migration barriers should come down, boosting worker mobility and the exchange of expertise. Indeed, several African countries have begun to prioritize the upgrading and recognition of migrants’ skills by implementing continental and global initiatives to promote skills recognition (CEA, 2024). In this way, less developed countries can benefit from the advances of their more industrialized neighbors, creating a virtuous cycle of industrialization and increased productivity, making Africa globally more competitive.

The transfer of skills and technologies by migrants to Africa is a key mechanism for the economic and technological development of both host and home African countries (Quartey & al. 2020). After acquiring advanced skills and technologies abroad, migrants return to their home countries with a wealth of knowledge and experience. These returns, often referred to as the “boomerang effect”, can lead to the creation of innovative startups and the improvement of local business practices (see, for example, Setrana & Tonah, 2016). Returning entrepreneurs can introduce new ideas and technologies, creating jobs and stimulating local innovation (BIT, 2018).

iv. Economic integration and regional mobility

To achieve full and effective integration of the African continent, the African Union deployed a specific strategy adopted in Abuja in 1991, mobilizing regional economic communities to facilitate free trade and regional mobility (Kotcho, 2017). But, 6 years after the adoption of the protocol instituting the free movement of people, and the continental free trade area, their operationalization remains slow. Intra-African trade is low, accounting for just 15% of total African exports (UNECA, 2023). The same applies to intra-African mobility, which is far from being on par with the Schengen area. States exchange and circulate the most between themselves around sub-regional areas, without taking continental protocols into account (Bekri, 2023).

By way of illustration, the ECOWAS zone has long been an African example of free movement, and SADEC is the most economically integrated zone (Bekri, 2023). This disparity in integration within the continent should be a collective wake-up call to speed up the signing and ratification of continental free movement and free trade protocols. Greater intra-African regional mobility enables more efficient optimization of labor and resources (UNECA 2023). It also increases trade. The two protocols are closely linked and are due to be implemented at the same time. However, differences of opinion, security problems, and a lack of political will have delayed their signature and implementation. Even today, it remains difficult for Africans in search of employment and business opportunities to move freely across the continent, although it should be noted that 80% of continental migration is intra-African (UA, 2017).

At the Africa CEO Forum, held in Kigali in May 2024, Aliko Dangote recalled the bureaucratic challenges he encountered when traveling to Africa (Bossa, 2024). He has to apply for up to 35 different visas to travel across Africa (Bossa, 2024). Multilateral harmonization of free movement within Africa is becoming a necessity, which will ultimately boost intra-African trade.

Recommendation

Invite African states to sign and ratify the protocols on the free movement of persons, the right of residence, and establishment, including the 2018 protocol. Monitor and evaluate the implementation of sub-regional protocols and provisions on free movement, and identify activities and policies to improve their implementation. Reduce and/or eliminate visa-related burdens between African countries.

Improve labor migration and skills development

Implement skills portability and mutual recognition of qualifications, and develop labor market information systems to support skills development and pooling across the continent.

Improving infrastructures and systems

• Digital identification systems: The implementation of digital identification systems can contribute to effective migration management. These systems would enable states to track mobility, ensure security, and facilitate border crossings. Improving border management practices and infrastructure. This includes training border officials and investing in technology to reduce border waiting times, making travel more efficient.

Conclusion

The impact of migration on free trade in Africa is significant. On the one hand, migrants facilitate trade by establishing transnational networks, promoting transactions and the circulation of goods. On the other hand, they contribute to the transfer of skills and technologies, essential for strengthening the productive capacities of African economies. Remittances from migrants to their families back home represent a crucial source of local financing, stimulating investment in various sectors across Africa. Finally, African migration contributes to economic integration and regional mobility, making African economies more interconnected and resilient. By fostering an environment conducive to these exchanges, African countries can take full advantage of the potential offered by migration, transforming this challenge into an opportunity to accelerate sustainable and inclusive economic
development.

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AUTHORS

Pierre Oyono Mvogo
Research Fellow
&

Vivian Ngono

Research Fellow