“The Accidental Ecowas
& AU Citizen”:
Will the African Integration Revolution be Televised? (1)
By E.K.Bensah Jr
You would not know it if you saw
it, but Africa’s at the cusp of historic change. If the month of November is
anything to go by, you might think that Africa’s about to take off in 2012.
Five major developments have conspired to remind us that the issue of regional
integration and trade are very much at the forefront of the minds of
policy-makers, civil society activists and citizens alike.
Africa Trade Forum
According to the website of the
ATF, the “strategic objectiveof the inaugural Africa
Trade Forum, ATF 2011is to promote and enhance
multi-stakeholder policy dialogue and advocacy on trade issues in Africa, by
mobilising all the different trade constituencies Africa and the
world in general, to debate and exchange views on all
the key issuesrelating to intra-African trade, and Africa’s
trade with the rest of the world”. Additionally, the Executive Secretary of the
UNECA was perhaps more instructive and insightful. In his opening speech, he
touched upon the low performance of Africa’s trade performance at
“international and regional levels”, going on to say that “the continent’s
share of global trade remains low at about 3% and continues to be dominated by
primary commodity exports.”
He also touches upon how
intra-African trade is faring, saying that it is “just about 11% of total trade
as compared to 72% in Europe and 52% in Asia.” He suggests that a solution is
through “regional value chains, which have contributed to high intra-regional
trade elsewhere, which in turn has helped firms in other parts of the world to
be key players in global value chains.”
Another positive outcome finds
expression in the forthcoming Economic Report on Africa2012, which shows
“some regional economic communities have exceeded the average intra-African
trade growth.” One example cited is that of intra-COMESA trade that is reported
to have grown “by at least 35.4 percent between 2009 and 2010, rising from
US$12.7 billion to $17.2 billion.”
Janneh further maintains that the
Forum is “intended to deepen the dialogue on how these challenges can be best
addressed including through sharing of best practices.” In this respect, the
Heads of States and Governments from the Tripartite of COMESA-SADC-EAC have
committed themselves to the establishment of an FTA by 2014 “that will be based
not just on market integration, but that will seek shared benefits through
industrialization and infrastructure development.”
That the AU Assembly will in
January 2012 focus its meeting on the discussion of boosting intra-African
trade can only “contribute to the process of helping build consensus around
some key areas.” In addition, the forthcoming Assessing Regional Integration
in Africa V, (jointly published by the AUC and AfDB) “suggest that
harmonization of RECs trade policies through a continental FTA would result to
an additional US$34 billion in intra-African exports…” In short, he maintains,
“if we do what is required, we can optimize intra-African trade.”
Seventh Ordinary Session of
Conference of African Trade Ministers
A second major development is that of the
Conference of African Trade Ministers currently being held in Accra this week,
and which ends on 3rdDecember. A quick perusal of the AU website reveals two major
documents that make recommended reading – that of an “Action Plan for
boosting Intra-African Trade” a ‘Draft Framework, Roadmap and
Architecture for Fast-Tracking the Continental Free Trade Area(CFTA)”. In
the interests of space, I will seek to summarise the major highlights of the
action plan, which comprises no less than six(6) programme clusters—namely:
Trade policy; Trade Facilitation; Productive Capacity; Trade-Related
Infrastructure; Trade Finance; and Trade Information.
The primary objective of the
TRADE POLICY cluster is to fast-track intra-African trade development. Some of
the activities outlined include: mainstreaming of intra-African trade in
national trade development strategies; boosting of intra-African trade in food
products so that tariffs, non-tariff measures and quantitative restrictions on
intra-African trade in food products are removed; promotion of “Buy in Africa”
and “Made in Africa” goods, which ought to lead to increased trade in goods
among member states.
The main objective of TRADE
FACILITATION is to reduce the time it takes to move goods from one point to
another by 50%. Activities include: reduction of road blocks; the harmonization
and simplification of customs and transit procedures, documentation and
regulations; and the establishment of an “Integrated Border Management”, which
output is a harmonized and simplified set of customs procedures; standards;
regulations and documentation.
The third cluster – the
PRODUCTIVE CAPACITY cluster – is perhaps the most contentious – and not just
because the Action Plan dedicates a longer explication of it! The Plan reports
that “to a large extent…the inadequacy of productive capacity, especially in
the dynamic sectors of global trade” has a lot to do with the low level of
intra-African trade. While Africa
exports more than it imports of ores, “metals, precious stones and fuels”, the
reverse is the case with manufactured goods, chemicals, machinery and
transport.
In short, the necessity of the
diversification of Africa’s economy and the enhancement of its productive
capacity and competitiveness for meeting the challenges of sustainable economic
growth and development has led the Assembly of Heads of State and Government of
the AU to adopt a number of initiatives.
These include the adoption of the
Action Plan for Accelerated Industrial Development of Africa(AIDA),
which is aimed at the enhancement of the continent’s industrial capacities and
capabilities. In addition, there is the African Productive Capacity Initiative(APCI);
the Action Plan for the Development of Science and Technology; and the Africa
Technology and Innovation Initiative(ATII); the African Mining Vision;
and the African AgriBusiness and Agro-industry Development Initiative(3ADI).
The report maintains “the effective implementation of these initiatives is
essential for the enhancement of the productive capacities of African countries
and for the boosting of intra-African trade.”
Little wonder, then, that the
main objective of this cluster is to create regional and continental value
chains/complementarity, to increase local production/ trade in goods produced
in Africa. Some of the programmes and activities scheduled include: the
prioritization of the implementation of continentally-agreed programmes, such
as AIDA; ATII; APCI; and 3ADI; the establishment of integrated and
inter-connected trade information systems; and the establishment of Regional
Centers of Excellence for technology development, adaptation and diffusion
resulting in each regional economic community(REC) having its own regional
centre.
The fourth cluster deals with
TRADE-RELATED INFRASTRUCTURE, with its main objective being the development of
innovative, legal, financial and other mechanisms for multi-country
infrastructural development projects. Some of its programmes include: the
prioritization of the implementation of the AU Programme for Infrastructural
Development in Africa(PIDA); and the
enabling environment for private sector participation in the development of
infrastructure.
Cluster number five—TRADE
FINANCE—focuses on developing and strengthening African financial institutions
and mechanisms to promote intra-African trade and investment. Programmes
include: strengthening and enhancing the capacity of existing regional and
continental financial institutions; improving payment systems so that
cross-border payments are facilitated; and finally, enabling environment for
financial service companies to supply export credit and guarantees.
The sixth and final cluster—TRADE
INFORMATION—focuses on bridging the information gap so as to enhance
opportunities for intra-African trade, with, among other things, the envisaging
of the creation of inter-connected centers of trade information exchange; as
well as the development of “innovative legal, financial and other mechanisms
for multi-country infrastructure and industrial projects”.
All this notwithstanding, there
is even better good news to help resolve the problem of Africa’s low level of
trade – and that is with the establishment of CFTA, or a Continental Free
Trade Area Architecture. This would include: a High-Level African Trade
Committee; a Joint Conference of Trade/Finance Ministers; an African Trade
Forum; African Business Council; Trade Observatory; and an African Court of
Justice. AU policymakers envisage the CFTAA to be ready by 2017.
UNCTAD’s Least Developed
Countries Report
The report was launched last
week—sadly without much fanfare. First, Ghana is not a Least Developed Country,
and secondly, LDCs rarely make the headlines these days. Nonetheless, the
report came out with much interesting analysis, including an issue I touched on
last week – that of the regional and sub-regional banks.
According to the report, regional
monetary funds are “instrumental in avoiding uncontrolled exchange devaluations
that may compromise the integration process.” The report maintains “it might be
argued that a regional reserve pool would not work if an external shock affects
the whole region.” Despite that, they continue to be “an important source of development
finance for regional member countries.”
It was back in 2002 that the
Monterrey Consensus of the International Conference on Financing for
Development (FfD) emphasized the crucial role regional and subregional banks
can play “in serving the development needs of developing countries and
countries with economies in transition.” Further, they can serve as “a vital
source of knowledge and expertise on economic growth and development for their
developing member countries.” Third, given the structure of regional ownership,
regional development banks can facilitate a stronger voice to developing
country borrowers, as “well as enhance regional ownership and control”. Fourth,
they can be effective because they tend to govern more through informal peer
pressure “rather than imposing conditionality.” Finally, “information
asymmetries are smaller at the regional level, given the proximity as well as
close economic and other ties.”
(to be continued…)
In
2009, in his capacity as a “Do More Talk Less Ambassador” of the 42nd Generation—an NGO that promotes and discusses
Pan-Africanism--Emmanuel gave a series of lectures on the role of ECOWAS and
the AU in facilitating a Pan-African identity. Emmanuel owns "Critiquing
Regionalism" (http://www.critiquing-regionalism.org ). Established in 2004 as an
initiative to respond to the dearth of knowledge on global regional integration
initiatives worldwide, this non-profit blog features regional integration
initiatives on MERCOSUR/EU/Africa/Asia and many others. You can reach him on ekbensah@ekbensah.netekbensah@ekbensah.net / Mobile: +233.268.687.653.
