Category: CARICOM

Caribbean and African countries share an extensive history forged from the scars of the egregious 300-year long Trans-Atlantic slave trade, the abuses of colonialism and the anti-colonial/independence struggle. As such, Africa’s imprint on the Caribbean is not just phenotypical, but its unmistakable genetic markers course through many of the rhythms, music and culinary delights which characterise the Caribbean cultural DNA.  

Last week, President of Ghana, His Excellency Nana Akufo-Addo, visited five Caribbean countries: Barbados, Guyana, St Vincent and the Grenadines, Trinidad and Tobago, and Jamaica. Aiming to build on the shared historical and cultural ties between his continent and the Caribbean, President Akufo-Addo took the opportunity to sign bilateral cooperation agreements with these countries and to encourage Afro-Caribbean descendants to take part in Ghana’s Year of Return which marks 400 years since the commencement of the Trans-Atlantic slave trade which officially ended in the early nineteenth century.

President Akufo-Addo’s visit presents an opportune occasion to consider the prospects for deepening Caribbean-African trade and economic ties, particularly in light of the recent entry into force of the African Continental Free Trade Area (AfCFTA) which will transform 52 out of 55 African countries into the world’s largest free trade area.

Current Caribbean-Africa trade

The Caribbean Community (CARICOM) comprises 15 Member States and territories in the Caribbean. Africa is one of the few trading partners with which the region enjoys a trade surplus. According to data from ITC Trade Map, CARICOM countries exported US$449 million worth in goods to Africa in 2017, representing 2.6% of CARICOM’s total exports to the world. Whereas, the region imported US$258 million worth of goods from the continent in that same year. Africa’s exports to CARICOM represented a mere 0.06% of its total world exports in 2017.

On an international relations front, CARICOM countries and many African countries are both members of the Africa, Caribbean, Pacific (ACP) grouping and the Commonwealth of Nations and cooperate in multilateral fora, such as the World Trade Organisation and the United Nations. While CARICOM currently does not have a free trade agreement with any African country, some individual CARICOM Member States have bilateral investment treaties (BITs) and double taxation agreements (DTAs) with individual African States, not all of which are in force.

Tourism between Africa and the Caribbean remains underdeveloped due to the lack of direct air links. Getting to Africa from the Caribbean or vice versa requires going through a major international gateway, usually London or New York City.

Prospects for deepening Caribbean-Africa trade

There are several developments which are promising for an expansion of Caribbean-Africa trade.

1. Caribbean push for export partner diversification

Caribbean countries have stepped up their attempts to diversify their export partners, particularly through promoting south-south trade. Thus far, among CARICOM Member States, Guyana, Haiti, Jamaica, Trinidad & Tobago and Suriname have a diplomatic mission in at least one African country. Barbados may soon join that list after announcing an intention to establish an embassy in Ghana by the end of 2019.

Maintaining a diplomatic presence is often a costly exercise for small resource-constrained countries. Establishing a joint diplomatic mission in strategic African capitals, similar to what the Organization of Eastern Caribbean States (OECS) has done in key international capitals, is something CARICOM may wish to consider. Trade and investment liaisons could be attached to the missions to assist in promoting business and investment. Since it is firms which trade and not countries, building linkages between chambers of commerce and investment promotion agencies in the Caribbean and African countries would also be key.

• Africa is on the rise

Africa is home to some of the world’s fastest growing economies and according to the United Nations (UN), the world’s youngest population, comprising one fifth of the global youth population (aged 15-24). Despite challenges related to unemployment, Africa’s youth has the potential to unleash positive change and are an asset in a rapidly digitalizing global economy. The perceived lack of opportunities for youth in Africa may be the Caribbean’s gain leading to the export of high skilled services. Ghana, for example, which has a surplus of nurses, has agreed to assist Barbados with its nurses shortage. Indeed, there is already a small but growing ‘recent’ African diaspora in many Caribbean countries making sterling contributions in diverse fields, such as education, medicine, law and the like. There are also prospects for Caribbean-Africa trade and economic cooperation and sharing of expertise, particularly in the areas of education, renewable energy and health. Deepening and expanding links between universities in the Caribbean and those in African countries would allow for student and faculty exchanges.

•  Increased Caribbean-African awareness

Caribbean people are becoming better aware of the continent through for example, Nollywood/Gollywood movies, African music, traditional African dance and the Africa Channel broadcast in the US and the Caribbean. The potential exists for collaboration in the creative industries, particularly in film production, dance, the visual arts and music. Caribbean musical genres such as reggae, dancehall and soca are becoming quite popular in some African cities. For instance, renowned Nigerian artiste Timaya and famous Trinibagonian soca artiste Machel Montano have collaborated on several songs.

In the area of tourism, Caribbean persons of African descent are increasingly interested in travelling to West African countries like Ghana, from which the majority of persons enslaved during the Trans-Atlantic slave trade were derived, in order to trace their ancestral roots and explore the Motherland.

Barbados recently announced visa waivers for several African countries, including Ghana, which would facilitate greater tourism and investment. The lack of direct air or modern day sea links between the Caribbean and the African continent is a challenge. It is therefore refreshing to hear the current Barbados Prime Minister speak to the possibility of negotiating an air services agreement with Ghana. President Adufo-Addo and Prime Minister Mottley also spoke of Barbados being a gateway for Africa-Caribbean trade. Barbados, because of its location as the most easterly island in the Eastern Caribbean, was one of the first stops in the Trans-Alantic Slave Trade, the island would geographically make a logical hub for any direct Caribbean-Africa air links.

• AfCFTA – a single African market

At a time when some major world powers are retreating to protectionism and isolationism, all but three countries on the African continent (except Benin, Eritrea and Nigeria) have formed a continental-wide single market, a step towards a continental customs union.

The AfCFTA was signed in March 2018 and entered into force on May 30, 2019, thirty days after The Gambia became the 22^nd country to sign. It represents the world’s largest free trade agreement with a collective GDP of $2.5 trillion and a population of 1.2 billion people. The AfCFTA will eliminate tariffs on 90% of goods trade within the countries party to it. Once implemented, the AfCFTA is estimated to boost intra-African trade (which currently remains less than 20% of total African trade), promote economies of scale, industrialization, improve the competitiveness of African companies and lead to wider welfare and income gains.  

While there is still much unfinished work to be done, as well as political, legal and regulatory hurdles to overcome before the ambitious agreement can be rendered operational, some of the potential benefits of the AfCFTA are apparent. Firstly, it aims to transform what is currently a disjointed and fragmented grouping of disparate regional markets and spaces with a maze of regulatory and legal barriers into one single continental market, making for a potentially more appealing and navigable market for investors. A company which establishes in one African State would not have to navigate a perplexing labyrinth of complicated rules of origin, regulations and other non-tariff barriers in order to trade across the continent.

Secondly, the vast African continent currently has several regional economic groupings based primarily on geographic region and with varying levels of integration. Though these groupings are not replaced by the AfCFTA, the AfCFTA means that CARICOM and other third parties seeking to secure a free trade agreement with Africa could negotiate with one grouping as opposed to several.

Thirdly, the AfCFTA and the Protocol on the Free Movement of Persons are potentially welcomed news for third parties seeking to establish a business in Africa as it could make sourcing inputs and hiring staff from other parts of the continent easier and much cheaper.  

Additionally, both Africa and the Caribbean, which each comprise countries separated by language and geography, are in the midst of creating regional integration movements. CARICOM, and in particular the OECS sub-grouping which has evolved into a deeply integrated sub-region, can share its own experience as it seeks to consolidate its own CARICOM Single Market and Economy (CSME). It can also learn from any successes of the AfCFTA.

In summary, Caribbean-Africa trade is small but there is potential for growth given Caribbean countries’ export partner diversification efforts, Africa’s economic rise and increased Caribbean-African cultural awareness. Additionally, the single African market contemplated by the AfCFTA is an exciting development which makes the prospects all the more alluring for deepened Caribbean-Africa trade based on a shared history, friendship and the potential for mutual benefit.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.