[Column] Bob Koigi: Why African passport makes great business and economic sense
03-08-2017 13:31:19 | by: Bob Koigi | hits: 13765 | Tags:

The decision by the African Union to introduce an African passport and abolish visa requirements for all African citizens is the most transformative and historic attempt the continent has ever made in opening up its borders to its people and addressing some of the most chocking maladies to continental trade key among them non-tariff barriers.

In fact nowhere is trade among nations of the same region or continent as prohibitively expensive as Africa. Trade between African states for example is about 50 per cent higher than in East Asia. Costs associated with intra African trade, the World Bank says, are the highest of intraregional costs in any developing region.

Transportation costs in especially air travel in Africa on the other hand are sky high, making it cheaper to travel out of Africa than within. This has meant that Africa has integrated with the rest of the world faster than with itself.

Yet the continent has always envisioned a borderless Africa largely driven by regional integration. Still the African market remains heavily fragmented with barriers to trade being the biggest impediment to flourishing trade across the various regional groupings in the continent.

Indeed the World Bank aptly captured this scenario arguing that imposing unnecessary costs on exporters raises prices for consumers, undermines the predictability of the trade regime, and reduces investment in the region.

For example, in southern Africa, a truck serving supermarkets across a border may need to carry up to 1600 documents as a result of permits and licenses and other requirements.

Slow and costly customs procedures and delays caused by other agencies operating at the border, such as standards, raise the costs of trading. For example, one supermarket chain in Southern Africa reports that each day one of its trucks is delayed at a border costs $500 and it spends $20,000 per week on securing import permits to distribute meat, milk, and plant-based goods to its stores in one country alone.

And then there are the strict policies on movement of people and goods between states that have created a sense of alienation and apprehension amongst Africans especially when approaching immigration counters at various exit and entry points.

In one of the most classic case studies, one of Africa’s richest man Nigerian Aliko Dangote, was once was once kept waiting at the South African immigration desk when he couldn’t find his passport as his American staff easily got through the border control.

Yet opening up borders has demonstrated numerous benefits to those who do. Rwanda for example, a country that abolished work permits for East African Community citizens to support its open-visa policy, has increased its trade with Kenya and Uganda by at least 50%, while the visa-on-arrival policy has increased African arrivals in Rwanda by an average of about 22% per year.

As implementation of the common passport draws nigh, and which will definitely call for sustained political will if it is to see light of day, the drive to actualize it must be backed by an aggressive push to have liberalized air transport, advocating for initiatives like one border posts that tames the cost of intra regional trade and the creation of interregional and international transport and road transit.

With rising incomes in Africa there are emerging opportunities for cross-border trade in basic manufactures such as metal and plastic products that are costly to import from the global market. That is why an African passport is a key component with a potential to ensure even the small businesses reap the benefits of a seamless and borderless Africa.

Multiple award winning Kenyan journalist Bob Koigi is the Chief Editor East Africa at Africa Business Communities


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