What We are Reading

Africa's development dynamics
On the side-lines of the AU summit, the African Union Commission and the OECD Development Centre launched its first joint report entitled, "Africa's development dynamics." This first edition explores the dynamics of growth, jobs and inequalities. Chapter 7 examines economic dynamics of ECOWAS member countries.

Identifying the factors driving West African migration to Europe
The most recent West Africa paper, published by the SWAC Secretariat, analyses the motivation and driving factors of West African migration, using nationally-representative surveys and focus group data collected in six West Africa countries. Since 2014 over 600 000 African migrants have arrived in Italy through the perilous central Mediterranean route, and nearly 120 000 arrived in 2017 alone.

Incentives and constraints of informal trade between Nigeria and its neighbours

The scale of unrecorded trade across the borders between Nigeria and its francophone neighbours is high. Despite providing economic incentives, informal trade entails other costs, complications and  sometimes risks. This West African Paper explores the current policy choices and government actions that could create a more conducive business environment to support trade between West African neighbours on a formal basis.

The Study on Benefits and Challenges of Free Movement of Persons in Africa. A study commissioned by the AUC and IOM

Resulting in the passing of a Free Movement of Persons protocol at the AU summit in January 2018 that has thus far been signed by 32 Member States. IOM in collaboration with the AU has commissioned a Study titled the Benefits and Challenges of Free Movement of Persons in Africa.

The study demonstrates how intra-African free movement of persons, if well managed, can bring about significant benefits to the continent, thereby positively impacting Africa's development prospects. It proceeds to outline recommendations for AU Member States, AU/RECs, civil society, and media for a gradual approach to implementation of the protocol. The study also notes that while many African countries still lack sufficient enablers to create and manage free movement, this need not be an impediment to progressing the free movement agenda, and advocates that a phased approach may well be the way to go on this taking account of African Member States' different stages of socio-economic development.

Comparing practices and lessons from other parts of world and how the African Union RECs are facilitating free movement of persons in Africa, the study  provides an analysis of the possible policy implications of enabling free movement of persons, and offers practical recommendations on how to move the free movement agenda forward. It concludes by offering guidelines for AU Member States on how to progress the free movement agenda, while taking account of the hurdles and the fears that the notion of free movement provokes in some quarters.

Officially launched on Monday 23rd July, 2018 at the African Union Commission

Full pdf file of the study is available here

Regional Spillovers in Sub-Saharan Africa : Exploring Different Channels

The analysis presented here suggests that the level of integration in sub-Saharan Africa is higher than commonly assumed, and it has the potential to deepen on many levels, supported by appropriate policies:

• Trade integration is now at comparable levels with that in other developing regions. Regional integration policies—such as reduction of tariff and nontariff barriers—and improvements in transport infrastructure can facilitate intraregional trade.

Structural transformation strategies that promote diversification could minimize spillover risks associated with overreliance on too few products and partners.

• While greater integration and sophistication in the regional financial systems are welcome, they pose new risks, as they increase the interdependence of financial markets and the potential for contagion.

Policies should address these risks by enforcing
existing banking regulatory frameworks, strengthening cooperation among supervisors, and developing cross-border bank resolution frameworks, which are currently lacking.

• Ongoing financial and technological developments have translated into lower costs for sending remittances throughout the region and have contributed to rising regional remittance flows. It is essential to provide a regulatory environment for these new technologies that is both enabling and risk mitigating (IMF 2017a).

• As economic integration deepens, public policies need to be mindful of fiscal spillovers to mitigate associated fiscal risks. This calls for greater harmonization of fiscal policies.

• A recent resurgence in population displacement highlights the need for policies to address the
main causes of forced migration, such as increased economic and physical insecurity, and put in place a system that accommodates and integrates forced migrants in host countries in a sustainable way.

Increased international aid would greatly facilitate the process.

This note stresses the growing need for policymakers to factor in spillovers from within the region when planning for the medium term and to design policies that address increasing transmission risks.