How AfCFTA Is Empowering Africa's Displaced to Economic Prosperity
FEATURED BLOG
How AfCFTA Is Empowering Africa's Displaced to Economic Prosperity
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By Gerald Kilimo, Botho Analyst
September 27, 2023
When examining trade in Africa, it is impossible to overlook the significance of the African Continental Free Trade Area (AfCFTA), which aims to establish a unified market for goods across the continent. Moreover, it may be possible that AfCFTA, through its advocacy plans for regional integration as well as its unique trade partnership programs, has acted as a catalyst for bolstering refugee enterprises in Africa.
The impact of refugee influx on local trade is multifaceted and profoundly significant in various ways. While refugees may, at least in the short term, strain local resources and infrastructure, host communities that receive refugees, including refugee camps, often experience GDP growth driven by heightened income resulting from both aid and refugee expenditures. This, in turn, contributes to the betterment of formerly impoverished areas.
AfCFTA's Advocacy for Regional Integration Fuels Refugee-Driven Agribusiness
Uganda is currently able to export $99.8 million worth of sugar within Africa and has the capacity to export an additional $53 million within the continent. Additionally, the Ugandan Dairy Development Authority expressed its intention to explore new potential markets, including the Democratic Republic of Congo, South Sudan, Zambia and Algeria. Uganda’s high production of agricultural goods has led to the generation of employment opportunities for displaced individuals. Ugandan refugee businesses have enjoyed tremendous support backed by AfCFTA trade advocacy initiatives including a relatively open regulatory environment which has enabled refugees to play an active role in the export-import supply chain within Africa.
Kyangwali and Nakivale, two refugee settlements in Uganda, see refugees engaging in agricultural production and subsequently exporting their produce to Somalia, Tanzania and South Sudan. The World Bank underscores the significance of the AfCFTA and its trade facilitation measures in bolstering Uganda's trade relations with other African nations. In fact, it is projected that Uganda's GDP, which is largely agriculture-driven, will see a significant increase of approximately 3.3% by 2035 as a direct result of AfCFTA’s efforts. As a result, the growth in Uganda's agri-food exports is expected to see more refugees seeking employment in the agricultural sector. In light of booming agricultural exports, more refugees are expected to establish their own businesses and even employ Ugandan nationals, creating a virtuous socio-economic cycle.
AfCFTA’S Partners Pioneering Gig Economy for Displaced Populations
The United Nations Development Programme (UNDP) Regional Bureau for Africa, a close partner of AfCFTA, has continuously advocated for various trade opportunities as a catalyst for Africa's socio-economic growth. This includes enhancing small and medium-sized business competitiveness by organizing roundtables and trade forums focusing on trade issues and supporting youth and women entrepreneurship within the AfCFTA framework. Recently, the UNDP Regional Bureau for Africa in collaboration with the International Labour Organization (ILO) developed a project dubbed “Promotion, Inclusion and Protection of Refugees in the Gig Economy'', targeting five African countries including Egypt, Uganda, Kenya, Ethiopia and Sudan. The project aims to improve working conditions for displaced persons and their host countries by facilitating digital skills training for the displaced and securing digital work for them.
This development builds on the trends already emerging among Kenyan refugees, with some refugees having reported earning nearly US$1,980 in just 20 days by working on translation jobs. Other African nations, especially those with high numbers of displaced individuals, may consider adopting this approach. For instance, Mozambique, with its 1 million displaced individuals, and Nigeria, with a staggering 3.9 million, stand out as prime examples of the significant gig economy potential due to their robust internet connectivity. Additionally, AfCFTA’s regional payment system, PAPSS, holds significant relevance in streamlining cross-border payments for online jobs such as transcription and translation. This showcases AfCFTA's role in bolstering the gig economy and generating jobs for refugees across Africa.
Conclusively, the AfCFTA with its aim of unifying regional trade value chains for African nations, not only benefits the locals, but also the refugee population within Africa. As projected by the United Nations Conference on Trade and Development (UNCTAD), AfCFTA could boost intra-Africa trade by about 33% and cut the continent’s trade deficit by 51%. In light of these forecasts, it is anticipated that refugee businesses within Africa will equally grow.
Gerald Kilimo is an Analyst at Botho.