Like many trade agreements, the main effect will be labour reallocation across sectors: Away from least competitive activities and towards those sectors that will be best placed to harness the opportunities of the regional market — in principle, those benefiting from the largest tariff cuts, and where countries have comparative advantage.
Research done by the United Nations Conference on Trade and Development UNCTAD shows that for the majority of countries, the regional market is a vent for exporting products whose degree of sophistication is higher, compared with what they export to the rest of the world. As a consequence, the AfCFTA can greatly contribute towards spurring economic diversification, boosting real income and job creation. We can expect a continuation of the current trend, whereby some job-seekers from smaller economies get jobs in more dynamic sub-regional hubs; to some extent this may even be facilitated by the fact that in parallel with the AfCFTA, African countries have negotiated a protocol on the movement of people.
Foreign multinationals? Tariff cuts through the AfCFTA will have a twofold effect: Intensifying existing trade relations within Africa the intensive margin and paving the way for the establishment of trade relationships among new country pairs or for new products the extensive margin.
In the longer term, however, a broader array of enterprises will be able to fully harness the extensive margin. This will give African businesses an important advantage over their foreign competitors.
Is it then prudent to expose their manufacturers to external competition before that growth is attained? As a result, the customer travelling on fare types that include complimentary advance seat selection can choose a specific seat at time of reservation for the entire journey on United Airlines and Singapore Airlines, rather than only at time of check-in. A romantic trip to Africa makes for the perfect gift for your Valentine sweetheart. We continue to implement initiatives to drive costs down and improve revenue as part of the turnaround strategy. According to Schneider , a desarrollista state demonstrates the following characteristics:.
Many African states tout industrialisation as the main driver of economic growth in their new plans. Is it then prudent to expose their manufacturers to external competition before that growth is attained?
The AfCFTA will allow African economies to reach higher economies of scale, thus making manufacturing potentially more attractive. These benefits will certainly accrue for big and small economies alike.
African countries mainly export raw materials. Immediately, this will not change the commodity dependence of many countries, but it will set the stage for opportunities in many new prospective value chains. Not necessarily. Air transport liberalisation has the potential to yield several benefits for Africa. In , the heads of state and government adopted the Declaration on the Establishment of a Single African Air Transport Market, which ensures its establishment by African airlines by , and facilitates air connectivity thorough implementation of the Yamoussoukro Decision.
According to a study commissioned by the International Air Transport Association to estimate the increase in air traffic and the benefits that would accrue if 12 African countries implemented the Yamoussoukro Decision, the total air traffic flow would increase by 81 per cent, or by about five million passengers a year. The analysis suggests that significant potential benefits would be achieved if restrictions on establishing air routes did not apply.
This increase is due to factors related to price and connectivity and rising standards of living, leading to an expanding middle class and strong population growth. These strategic measures can have relatively fast and tangible impacts. What should small businesses do to benefit given that their growth continues to be blocked by lack of credit, high taxes and red tape at home? Policies that foster integration within the country domestic integration bridging the rural-urban gap and linking to vibrant urban markets should yield opportunities for SMEs to grow.
Other factors concurring to this include customs co-operation, transit, trade facilitation, trade remedies as well as non-tariff barriers, technical barriers to trade and sanitary and phytosanitary measures. Furthermore, it is the interaction between these with the specifics of other Protocols of the Agreement that will determine the final outcome of the implementation of the AfCFTA. There is no inherent contradiction, rather a reflection of the acute political challenges many governments face in signing up to and ratifying the AfCFTA.
Lessons learnt from the economic partnership agreement negotiations show that the private sector has to be involved early enough in order to avoid problems with the AfCFTA implementation.
It is also crucial to involve all the key stakeholders from the start, i. Nigeria has been a key driver of the AfCFTA process but did not sign the consolidated text of the agreement at the time; but has recently announced that it will be doing so.
How easy is it to sell Africa as a single market when investors are alive to the differences in the respective economies? Africa is opening up trade within the region and harmonising how the entire continent does business — that is key for attracting inward investment. Not if that growing population is engaged, entrepreneurial, employed and productive.
Now, the industry in Africa appears to better understand the economic benefits of a more liberal regime and moving from a general protective stance of state interests. We are now the closest we have ever been to allowing Africa to fulfil its aviation potential. But this provides the perfect platform for growth and the potential is massive. IATA predicts that air travel growth in Africa will outpace all other regions of the world over the next 20 years, albeit that is naturally from a smaller base. A recent report from InterVISTAS demonstrates that liberalisation will create opportunities for further significant employment growth and economic development.
The research suggests that a potential five million passengers a year are being denied the chance to travel between these markets because of unnecessary restrictions on establishing air routes. Africa covers more than 30 million square kilometers and is home to more than a billion people. Due to its challenging terrain, air transport is often the best—sometimes the only—way to connect the continent.
Africa needs safe, efficient and affordable air transport links to make the most of its people and resources. We have been on the verge of progress many times before and despite promises they failed to deliver change. Whatever the outcome of the latest discussions on the Single African Air Transport Market SAATM , a clear air transport strategy is required across the Continent and this should be based upon strong analytical evidence and must be implemented with precision.
African Airlines in the Era of Liberalisation - Kindle edition by Dr Elijah Chingosho. Download it once and read it on your Kindle device, PC, phones or tablets. The African airline industry is starting to benefit from liberalisation, but there are still many challenges ahead, says Elijah Chingosho, technical.
With a clearer aviation strategy the African aviation market will then be sure to enter a new dawn.