By Memuna Forna
Schengen in on life support and West African manufacturers should pay close attention. They are already convinced they won’t be able to compete with the cheaper, better quality imports, which will be the inevitable result of a forthcoming EU/Africa free trade agreement. For most, exporting to Europe is a distant dream anyway. Increased border restrictions will make it even more unlikely.
The EU is West Africa’s biggest trading partner; and West Africa the EU’s largest in the Sub-Sahara. The EU/West African Economic Partnership Agreement (EPA), which has been ten years in the making, will ease export restrictions between the two, in theory giving West African businesses full access to an export market of 500 million people and changing dynamics between the regions from aid to trade.
In practice a long list of factors including access to finance and electricity, tax rates, political instability, an inadequately educated workforce, and corruption puts African manufacturers at a disadvantage. Less widely discussed is the additional layer of difficulty added by the already complex and expensive visa application systems of developed economies.
For West Africans, the application process for Schengen visas is Darwinian. Last year it took the Sierra Leonean boss of a long-established SME, two trips to Guinea and cost a few thousand euros in expenses to secure his Schengen. An official from neighbouring Liberia, travelled to Nigeria and spent a week on the road as well as almost 1500 euros in direct costs and expenses to get a visa to attend trade talks with his opposite number in Sweden. As it stands, almost a third of West African applications are rejected, more than from any other region. Inevitably those rejection figures will rocket alongside calls for greater border controls as the EU attempts to deal with its ‘migrant crisis’.
Segregation by visa is not unusual, although countries don’t tend to publicise their blacklists. A few years ago the UK’s Home Office fought tooth and nail to keep theirs under wraps on the grounds that it would harm international relations. In an explanation that speaks volumes, the FCO’s director of immigration said at the time: “Many countries use visa and immigration policy as a foreign policy tool, reflecting their attitudes towards certain countries and the value of certain relationships.
The rhetoric around the yet-to-be-concluded EPA is that it will boost business by freeing up import and export between the EU and West Africa, allowing West Africa’s private sector to trade and secure investment in Europe more easily. Nigerian manufacturers, in particular aren’t buying it. They’re not ready to compete with better quality EU imports, and the sheer size of their domestic market can keep their manufacturing sector buoyant for some time.
In West African countries with less developed manufacturing sectors, most SMEs have their heads down dealing with their day to day challenges. Nevertheless, with tiny domestic markets, countries like Sierra and Liberia, can’t afford to delay much longer. Growing and diversifying their export markets is crucial to their economic development. It will boost productivity and provide employment as well as improve trade balances. Limiting their international exposure won’t help them achieve those objective.
In today’s globalised and extremely competitive economy, the value chain doesn’t end with the finished product, it ends with marketing, sales and service; and access to the end user, whether at home or abroad. Intellectual capital, experience and personal networks are as necessary to export success as they are to success in the home market. It’s been proven. Personal foreign experience outside of Africa is a particular characteristic of many successful exporting entrepreneurs in the Sub Sahara. High visa costs, lengthy application processes and uncertain outcomes will make the experiences that create success much harder to acquire.
At the root of the problem is the misconception that everyone from Africa is a potential illegal immigrant. Given a visa, they’ll never go back. But if the EU wants to change the nature of its relationship with West Africa from aid to trade, its worth looking at the Sierra Leonean diaspora as a telling example of an immigrant population relatively unimpeded by visa restrictions. They are largely educated, solvent and skilled. They travel often to Sierra Leone and many fully intend to return to Sierra Leone in the future. They volunteer, send money back and are keen to invest in the economy. Now that’s something to build on.
Memuna Forna publishes FT Insight – www.ftinsight.net – Sierra Leone’s first magazine dedicated to its business and investment sector.