Free movement of persons, informal trade and the African continental free trade area

Nearly 85.8 per cent of Africa’s employed population works in the informal sector. In some countries in sub-Saharan Africa, the informal sector accounts for over 90 per cent of employment, while informal output is as high as 62 per cent of official GDP. Despite this large size and its contribution to the growth of African economies, the sector remains significantly untapped. The African Continental Free Trade Area (AfCFTA) can play a significant role in optimizing the benefits of informal trade, particularly informal cross-border trade. For this to happen, however, the AfCFTA would need to be accompanied by the liberalization of the movement of persons across borders through the elimination or at least the reduction of the stringent travel requirements. This chapter analyses how the AfCFTA impacts informal trade, particularly informal cross-border trade. It also highlights how the free movement of persons can help Africa maximize the benefits of informal cross-border trade and, in the long run, integrate the sector into formal structures of trade for sustainable economic growth.

Sustainable Development Goals:

Life on Land