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Africa Regional Blocks: Unifying or Dividing?

Regional integration arrangements in Africa have generally been perceived as vehicles for overcoming the constraint of small economic sizes of nations. The shire sizes have been seen to hamper their ability to industrialize effectively, particularly within the context of import substitution. Africa Intra-trade was therefore conceived as a means to facilitate the structural transformation; accelerate, foster and encourage the economic social development of African states. 

 

Most integration schemes in Africa have aimed at achieving a common market, but unfortunately, hardly any schemes have achieved the anticipated progression towards the goal. By 1990, the target date for ECOWAS, very little progress had been made towards a free flow of goods and a common tariff required for the creation of a customs union in West Africa. Further, there appears to be consensus in Africa that regionalism has only achieved very little success; hence, the most conspicuous feature of African regional co-operation and integration efforts is the large number of units on the continent and the membership of individual countries in more than one regional unit. Broadly speaking, a number of the initiatives of regional groupings have been sponsored by the Economic Commission for Africa (ECA), making it possible to place them in one category, to be contrasted with another category that sprang up as a result of other initiatives elsewhere. The ECA has promoted three sub-regional arrangements for West Africa (ECOWAS, established in 1975), East and Southern Africa (PTA, established in 1981) and Southern Africa Development Corporation (SADC).

 

There are generally a number of characteristics of the development of regional integration arrangements in Africa, most of them indicating the difficulties they have gone through over the past three decades and their attempts to solve them through re-orientation of institutions. Below are some of the conspicuous characteristics of intra-trade blocks.

 

Multiple Objectives: Most groupings in Africa are concerned not only with trade integration but also the objectives of harmonization of agricultural, industrial, transport, energy, fiscal and monetary policies, (for example Economic Community of West African States-ECOWAS, the former PTA and West African Economic and Monetary Union-UEMOA). Southern African Development Co-ordination Conference (SADCC) until it was transformed into SADC was the only large regional grouping, which did not have trade integration as an objective.  The overriding need to expand the market size available to local industries can explain the emphasis on trade integration within most of these groups.  The objective of increasing intra-regional trade in most regional integration agreements is not only to exploit potential economies of scale but also a means to achieve regional self-reliance, hence the need to exploit the potential of all sectors.

 

Overlapping Membership:  The disadvantage of the large number of regional integration arrangements is that a country may be a member of regional groupings with conflicting means to achieve sometimes-similar objectives. An example has been that of a large number of ECOWAS member states also belonging to UEMOA.  This is interesting, considering the perception that the latter grouping was derived from Communaute Economique De L'afrique De L'ouest (CEAO) which itself came out of Union douanière économique des Etats de l'Afrique de l'Ouest (UDEAO), the former customs union of francophone West African states, established in 1973 with French initiative to counter what was seen to be a growing Nigerian influence in the sub-region.  UEMOA is seen to pose a challenge to ECOWAS, in view of the cohesive nature of the former as an organization originally intended to counter Nigeria’s domination of ECOWAS, and also in view of the convertibility of its currency in a sub-region of highly inconvertible currencies.

 

The membership of the Common Monetary Area (CMA) in Southern Africa closely overlaps with that of Southern African Customs Union (SACU), except for the absence of Botswana from the former. The CMA operates under the Multilateral Monetary Agreement (MMA), which is supported by bilateral arrangements between South Africa and its partners.  The implication is that within COMESA and SADC there are forms of integration that are more important to some members.

 

Problems could arise for parallel membership of several groupings with similar objectives.  There is certainly the issue of replication of effort.  An example in this case is SADC and COMESA.  It is difficult to envisage how SADC and COMESA, given their convergence to both sectoral cooperation and trade integration, can live and prosper with the overlapping membership of the Southern African countries. Restructuring seems inevitable if institutional rivalry between the two and malaise in integration are to be contained. The effectiveness of one grouping tends to be undermined by the existence of the other as limited financial resources cannot meet all requirements, and technical expertise in a poor region is stretched to the limit.

 

Poor Private Sector Participation:  Another feature of integration in Africa is lack of active involvement of the private sector in the formulation of decisions and protocols among others.  There is often insufficient knowledge about some of the provisions of treaties within the private sector.  This might explain why there is often an unwillingness to invest time and resources to participate in the trade liberalization programmes. This is buttressed by the fact that some of the regional blocks have a polluted political background, such as the SADC, formerly SADCC and initially comprising of what was then the “frontline states” in relation to their neighborhood and proximity to the frontline challenges and attacks from the aggression of apartheid forces in South Africa. This background and perception has been excluding other players such as the private sectors as stakeholders.

 

Absence of Strong Supra-National Institutions:  The concept of supra-nationality is often not adopted in African integration. The regional institutions in existence do not have the legal backing to implement or enforce treaties and protocols. The ECOWAS secretariat, for example, has few powers to force governments to implement trade liberalization measures.  The result is a lack of transparency in the implementation of the treaties and allows for the progress of the integration process (or lack of it) to be captured by vested interests. The dilemma is, if private economic agents have a complaint regarding the operation of a protocol or article of agreement, for example, this has to be made to a national government body which probably sanctioned the policy that contravenes the treaty.

 

Inadequate Sanctioning Authority: Related to the absence of credible supra-national institutions is the fact that the treaties often do not have effective sanctions against member countries pursuing policies which conflict with the articles of agreement.  It may be the case however, that even where the penalties are spelt out (as in the case of the revised ECOWAS treaty) the cost of non-implementation of the treaty may be perceived to be less than the benefits of doing so. This perception by member countries is more likely to be the case if most members of the union are not implementing the articles of agreement.

 

Non-Implementation of Harmonization Provisions: Another important characteristic of Africa integration is failure to implement the treaties’ provisions concerning harmonization of tariff codes and classifications, and the maintenance of non-tariff barriers and high tariff walls.  The import-substation development strategy pursued by most of these countries in the sixties and seventies was incompatible with the limited trade liberalization, which these treaties envisaged.  An example of the national objective of import-substitution hampering the effective implementation of trade liberalization was the operation of the tax Unique within UDEAC.  Under the tax unique, products from the region should be subject to the same tax rate irrespective of their source.  However, because of the import-substitution objectives of various countries, discriminatory tariffs were imposed which often varied by product and firm for various countries in the grouping.  Obviously, the national perspectives of trade policies were at odds with the requirements of regional integration.  For quite a number of these countries trade policy was a macroeconomic policy instrument acting as a substitute for necessary exchange rate adjustments.

 

In addition to failure to implement policies to encourage the exploitation of the existing potential for trade integration, the harmonization of agricultural, industrial, energy, fiscal and monetary policies that have been envisaged in some treaties has also not taken place. For example, a decision was taken within ECOWAS to harmonize agricultural commodity agreements. This decision has not been implemented. On the other hand, while the Community’s Protocol on the Free Movement of Persons, Residence and Establishment has been implemented, it is contravened when it suits the interests of member countries.

 

Lack of Political Commitment:  Lack of political commitment towards the treaties, which have been signed, is an important explanation for the failure to implement treaty provisions. Diversity in political ideologies and external alliances are important in this regard. The basic issue confronting regionalism in Africa is compatibility with established political economies and ruling classes.  And when these are outward-oriented towards extra-continental integration, intra-continental connections remain undeveloped and unimportant.  The formation of CEAO at the same time that ECOWAS was being negotiated, is an example of such a concern, as is the evolution of CEAO into UEMOA and the increasing importance of France in the new regional arrangement.  The result of such alliances is that regional leaders are either disinterested or diverted.

 

Unclear Perceptions about Gains:  Lack of political commitment also derives from concerns about the gains from integration, the sentiments expressed in the treaties notwithstanding. Unwillingness to ‘give up’ some sovereignty has been frequently suggested as a reason for the lack of political will. This cannot be divorced from the concerns about material benefits.  For each member country, the objective is to achieve net gains from integration or co-operation.  A certain amount of sovereignty will be given up only if there are tangible benefits to be obtained in return.  The plethora of integration and co-operation units may be indicative of the search by individual countries to create that grouping which will best serve its interests.  The end result, however, is a large number of groupings, none of which can be described as a success.

 

General Poor state of Economic Literacy in Africa: Finally, the general lack of understanding on Economic Literacy and other levels of literacy in Africa override all other hindering factors. There is generally this mis-conception that economic literacy is the subject of economists and academics, yet it is a simple factor that every citizen should be privy to in order to be able to make simple, but intelligent decisions in our ever-day operation of business. To state it plainly, economic literacy means having the tools for understanding your economic world and how to interpret events that will either directly or indirectly affect your country. No one is suggesting that every African Leader or citizen become a master economist, but knowing the fundamentals can help African Leaders make smarter choices in the process of governing Africa to prosperity. Our leaders have monopolized the center of these regional trade blocks, marginalizing the concept of supra-regional organisations, academics with capacity to analyse intra-regional trade for the benefit of Africa. Further a lot if not all, African decision makers on intra-Africa trade lack the fundamental basic economic literacy skills to lead the process; therefore, regional trade decisions are based on political patronage.



By Phillip Bohwasi
Social Scientist, Civil Society participant
Founder of Zimbabwe Opportunities Industrialisation Centers (ZOIC).


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