International Economics Consulting Ltd (IEC) prepared this study on the Challenges in Intra-Africa Trade in Health and Education Services Sectors, for the United Nations Economic Commission for Africa (UNECA).
The report found that healthcare and education services are essential services, which, in addition to contributing directly to GDP and employment, also enable and sustain capacity in human resources, impact productivity and overall wellbeing of economic agents. On a continent such as Africa, with a diverse economic makeup across countries, and varied comparative advantages, and a diverse base of human capital, services are contributing a growing share to GDP, employment, as well as to the productivity of other sectors.
Some of the larger economies in Africa are also developing healthcare and education services on a par with other developing and developed economies, and exporting these services, both within the continent and internationally. To this end, in light of, inter alia, geographical proximity, common cultural and historical heritage, and language of these countries, regional trade in Africa in these essential services will reduce dependence and loss of revenue to international providers and will help build productive capacity in essential services on the continent.
Cross-border trade in healthcare and education services is impacted by several factors, the majority of which affect trade in services in general. This includes the lack of clear definitions in trade in services, and the presence of a large number of suppliers in the informal sector, which makes accounting for trade in services a complicated exercise. In addition, regulation and decision-making in the services sector are impacted by the lack of sector-specific trade data, aggregated by healthcare and education services. Trade in healthcare and education services is also impacted by the state of, and access to infrastructure, both hard and soft; domestic regulation in the importing country; regulatory cooperation among trading partners and capacity to trade, both institutional and human.
The African Continental Free Trade Area (AfCFTA), which aims to liberalise not just trade in goods, but also in services, and to facilitate intra-Africa investment, and address issues of intellectual property and competition policy, together with the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment, and the Single African Air Transport Market, will create the necessary frameworks and capacity to enable and facilitate intra-Africa trade in services by addressing the challenges that inhibit such trade. The AfCFTA is also anticipated to be a “game-changer” in enhancing intra-Africa trade. However, further efforts are needed, such as the prioritisation of Healthcare and Education in Phase I of AfCFTA Negotiations, enhanced regulatory cooperation, increased capacity building, access to data and analytics, and improved monitoring of regional integration initiatives.