By Sam Okwakol

Trade in professional and education and health services features high on the agenda of policy makers and regional organizations in Sub-Saharan Africa, but a host of roadblocks are in the way preventing this from happening.

For example, according to ‘The Unexplored Potential of Trade in Services in Africa’ a report commissioned by the World Bank, all five East African Community (EAC) countries have committed to removing the most explicit barriers to trade in education and health services as part of the 2010 EAC Common Market Protocol.

Several EAC countries have placed professional services at the top of the list to be integrated in the EAC Common Market. But despite progress in recent years, most regional services markets remain fragmented by restrictive policies, such as nationality requirements, and regulatory heterogeneity (these are non-tariff barriers that originate from national regulations), for licensing, qualification, and educational requirements.

Critics say the central issue is ‘protecting one’s turf’. Lawyers, accountants, doctors and the other professionals do not want nationals from neighbouring EAC member states upsetting their cosy relationships. Consequently, several barriers, beyond perhaps a lengthy accreditation process, are then put in place to frustrate allcomers.

Despite strong demand for services provided by foreign suppliers, undertaking trade is not easy.

Multiple barriers are placed on the physical movement of service suppliers, including high-priced visas, difficulties obtaining work permits, and elusive residence status.

To circumvent such barriers, most services providers form networks.

For instance, Tanzanian Maasai hair stylists organize themselves to avoid these restrictions and provide services informally abroad (in Zambia).

But the braiders have to pay a fee to a “coordinator” who facilitates their travel and accommodations, connects them with beauty shops or markets where they provide services informally, and helps them send money to their families in the home country.

Similar arrangements are observed in other services sectors. While services providers remain trapped in informality, governments lose the beneficial interactions and linkages that would come from greater integration into the domestic economy, such as the employment of locals in foreign-owned businesses, transfer of skills and technology, and increased access to more efficient services inputs.

Burdensome immigration requirements, quotas on the numbers of service suppliers, nationality or residence requirements, and labor market tests (horizontal measures or specific restrictions that apply to education and health professionals traveling across national borders to provide services) often impede the movement of health and education professionals.

In the case of professional services trade, the hurdles range from the cost and quality of education to domestic regulations and trade barriers.

Source: All Africa

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.