In May 2018, Kenya ratified the African Continental Free Trade Area, becoming one of the first countries on the continent to adopt the agreement that aims to remove trade barriers and encourage investment.
With the free flow of trade and investment, there will inevitably be labour mobility as companies seek out specialized skills to support their cross-border investments. Business Daily sat down with Willis Makulali, Director of Immigration at Fragomen Kenya Ltd, a global immigration services company, to discuss the potential impact of the trade agreement on labour mobility trends in Africa once it is fully implemented.
How do you see the impact of the African Continental Free Trade Agreement on the movement of migrant workers to Kenya?
The African Continental Free Trade Agreement removes trade barriers and encourages investment, and companies move with experts they already know or want to connect with to start their business.
And when countries open their doors to investment and trade, investors also move people, and that’s how they make the connection between getting investment and then getting talent to move across borders.
However, the majority of the workforce will remain local. So there is a positive impact in terms of transfer of talent and skills, because people who come are likely to stay for two or three years to build the business, but ultimately Kenyans take over the roles. This means we get more in terms of value compared to the numbers coming from the diaspora.
You will find that in a multinational company with 500 employees, no more than one or two percent are foreigners.
In Africa, you find that some countries are experiencing a shortage of skilled workers. Do you see opportunities for Kenyans to go out to other countries in Africa, similar to the way we export workers to Europe and the Middle East?
There is an opportunity. Countries need to look at their areas of strength, whether agriculture, manufacturing, ICT or innovation, and maximise these areas. If this is encouraged in this way, there will be opportunities for skilled labour to migrate as the sectors develop. In turn, there will be opportunities for Kenyans to go to Africa to do business and even invest.
In terms of sectors, agriculture comes first as it is a fast growing area with endless opportunities. Then there is manufacturing, telecommunications and ICT, which are areas of strength for Kenya that we can leverage.
How do you assess the Kenyan economy’s ability to absorb labour from abroad?
We have the capacity and are growing at a rate that allows us to absorb external labor, which will not be in large numbers.
Most multinationals, even the largest American Fortune 500 companies, have about one or two percent foreign workers in any country they are in, largely because of the laws that have been put in place. So we are still able to absorb skilled workers—the unskilled labor comes on its own—but we have a greater capacity for outflow, which is why the government is keen to secure opportunities abroad.
What is the potential social impact of labour migration, given that many countries have shortages of jobs, housing, health care, jobs, etc.?
If we look at labour migration to Kenya, we find that skilled labour constitutes only a small part of this migration. The largest part is occupied by unskilled labour, which flows in large numbers from neighbouring countries.
There will inevitably be pressures on housing, social facilities, and health care, and how a government manages these pressures is crucial in ensuring that there is harmony between the local population and the diaspora in a country, whether they are refugees, informal sector workers, or even skilled workers.
Are there any guarantees within the African Continental Free Trade Area for labour migration and jobs?
If you look at the immigration policy and practice in Kenya, there is something called “Kenyanization” which requires that certain jobs be done by Kenyans. Regardless of who the investor is, there are jobs that you cannot bring expatriates to do.
But in addition to that, for the programs allowed for expatriates, there is what is called the Freshmen Program, where every immigrant you bring with you must have a Kenyan, equally qualified or experienced, to work with the foreigner.
The idea here is that when this foreigner leaves at the end of his tenure, a Kenyan is supposed to take over that job. Or even if this Kenyan doesn’t take over the job directly, he is supposed to apply his skills elsewhere. Or he is supposed to work for this multinational company in another country.
Thus, this approach works well for skilled labour under Kenya’s immigration laws and practices. Unskilled labour is poorly managed across Africa and will remain difficult to manage.
Now that Kenya has adopted a visa waiver regime, should we look to strengthen enforcement of work permits?
Legally, it is good that the work permit system remains in place, especially for skilled workers, because we remember that we are talking about a country that is greatly affected by high levels of unemployment.
The work permit system is really about making sure that the people coming in are the people we really need. The work permit system has a way of identifying these skills, and you can’t just ignore it, otherwise everyone will come in and before you know it there’s resistance from the population.
Are there any local laws that need to be changed in order for us to comply with or fully benefit from the Trade Pact?
We don’t necessarily need to change, but we need to update some laws to meet the specific needs of business between African countries. For example, tax and immigration laws to allow for easier movement of business. We need to look at our policies at this level and see if they encourage investment and trade in goods and services.
If this is successful, we will see how to promote it and tell investors how to support its creation and what they can do in terms of partnerships with the government and the private sector.
For example, the Common Market for Eastern Africa Protocol is a very good document. But only on paper. In reality, it is completely different and needs work to make it more effective.
