Columnists

Lessons from regional economic integration in Africa

FRANCIS Mangeni.

Analysis: FRANCIS MANGENI
DRIVEN and demanded by clear and determined political leadership, the African Continental Free Trade Area (ACFTA) was negotiated in just over two years and entered force in just over a year; an astounding record for trade negotiations and agreements in history.
The eternal lesson is that, with political leadership and clarity, mobilised at the highest level around specific objectives and programmes, the unthinkable can be rapidly achieved.
Retrospection at this point in time could assist to internalise and maintain this trajectory in African continental economic integration and inspire better quality in progress into the future.
Over the years, especially since the 1960s, Africa has established continental and regional integration bodies and frameworks that have provided auspices for political and economic milestones. For instance, political decolonisation was achieved in 1994 under the Organisation of African Unity, the African Union was put in place in 2002 and a continental peace and security architecture established in 2003, eight regional economic communities were formally recognised in 2006, the COMESA-EAC-SADC tripartite arrangement was agreed in 2008, and the ACFTA has just entered into force this year.
To deal with public policy challenges of peace and prosperity, by ensuring better security and creation of decent jobs and wealth, Africa has adopted the overarching strategy of developmental economic integration. This approach prioritises as complementary programmes, at least the following: large markets achieved through effective and modern free trade areas underpinned by robust trade facilitation and digitisation interventions; industrialisation that covers both manufacturing and services; infrastructure that includes surface and air transportation, energy, and information and communications technology; innovation for development; as well as political and macroeconomic stability.
Rather than theoretical constructs, the actual entry points for African economic integration have been the current existential issues the regions faced: drought and desertification for IGAD, peace and security for ECOWAS, infrastructure and industrialisation for SADC, trade and financial facilitation for COMESA; and nostalgia over a beloved economic community that collapsed in 1977 in EAC.
Trade and investment, and the concomitant movement of Persons and Capital, are the face and practical value propositions for regional economic integration in Africa. But enabler programmes are necessary, such as innovation, statistics and evidence-based policy, agriculture, infrastructure, industrialisation, and political and macroeconomic stability.
Critical, though, is that trade and investment support institutions have an important role in supporting the private sector to better utilise the opportunities.
COMESA, for instance, established the Business Council for Advocacy, the Federation of Women in Business (FEMCOM) to mobilise and empower women, the African Leather Institute (ALLPI) to grow the leather value chains, the Africa Trade Insurance Agency (ATI) to assist de-risk the region, the Clearing House and the Regional Payment and Settlement System (CH/REPSS) to facilitate regional payments, the Re-Insurance Company (ZEP-Re) to provide reinsurance and retrocession, the Trade and Development Bank to finance regional development through loans to governments and the private sector, the Regional Investment Agency to attract investment, the Regional Competition Commission to underpin a fair market, and the Regional Court for the rule of law.
A number of these COMESA institutions are now continental in scope in terms of operations and membership.
Large markets are created for the private sector to take up. It should be a no- brainer then that appropriate institutions should be in place to galvanise and support the private sector.
Deeper and broader integration requires political ownership and leadership, based on long-term socio-political impetus, beyond the technical level bean-counting and negotiation or haggling processes. It is all about how much and soon the leaders want it to happen. The leadership should mobilise all relevant key players and stakeholders in the public and private sectors, and in the academia and civil society.
African economic integration still takes place in a global political and economic order. However, Africa must secure its financial autonomy and progressively eliminate over-dependence on some partners.
ECOWAS has been able to mobilise US$630 million annually from its community levy system. The African Union levy of 0.2 percent on imports has so far raised US$800 million for the Peace Fund to support peace and security operations. Donor funding in the meantime continues to fill in existing gaps in other regional bodies. The EAC has mobilised US$500 million in project financing mainly for trade facilitation.
Long-term, sustainable building of capabilities is a critical success factor. The capabilities are entrepreneurial, leadership, intellectual, diplomatic and negotiational, mobilisational, proposal and drafting and textual preparation and explanation, and managerial.
The Pan African University and the COMESA Virtual University are poised to play critically influential roles in cutting out the next generation of Pan- Africanist leaders in all fields.
As a general thrust, though, massive training, of a long-term and executive nature, will assist to catalyse a critical mass of pertinent skills for economic integration in government, private sector, academia and grass-roots organisations.
Without innovation, which continuously brings new goods, services, assets, and business processes onto the market, an economy stagnates and even regresses. Innovation programmes must therefore be at the heart of regional economic integration, to assist deliver the benefits of larger markets and inter-governmental cooperation frameworks in all relevant sectors.
COMESA has established an Innovation Council and a Ministerial Committee on Science, Technology and Innovation; as well as Annual Innovation Awards in various categories: youth, women, and institutions.
The world ever becomes vulnerable and susceptible to new threats. Economic and religious-related disaffection brews extremism, with dire unexpected consequences for human life, property, and sanity. Environmental stress has contributed to recurring disasters. Diseases hit now and then: mad cow disease, avian flu, Ebola, for instance.
The African Union was pleasantly surprised to mobilise 900 doctors and nurses from various African countries to raise US$15 million from the private sector at their own initiative, and US$34 million through SMS-based crowd funding, for the Ebola crisis in West Africa in 2014.
The private sector has formed the Afro-champions Initiative (http:// afrochampions.com) to proactively support the growth of African multinational companies to utilise trade and investment opportunities under the African Continental Free Trade Area and enhance their regional and global operations.
About 150 African companies already have a multinational scope in Africa, 75 of them with registered offices and subsidiaries and undertaking substantial operations outside Africa.
Regional economic integration in Africa has matured and taken off. Best practices and progress at the regional level is being consolidated at continental level, in a pragmatic manner that doesn’t roll back whatever has been achieved. This maturity and political ownership should not be squandered. What is therefore required are mechanisms to sustain the momentum through documentation and continuous building of capabilities as a collaborative effort led by Africa but equally supported by all institutions and people of goodwill the world over.
The good of Africa, as a geographically large and populous continent, with resources to drive the global economy, will be good for the whole world.
The author is the director of trade and customs at the COMESA Secretariat.



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