Progress on Regional Integration in Africa

Transcription

1 UNITED NATIONS ECONOMIC COMMISSION FOR AFRICA ECA/RITD/CRIT/2011/03 Original: English Seventh Session of the Committee on Trade, Regional Cooperation and Integration Addis Ababa, Ethiopia 2 3 June 2011 Progress on Regional Integration in Africa Regional Integration, Trade and Infrastructure Division (RITD), ECA, P. O. Box 3001, Addis Ababa, Ethiopia.

2 I. INTRODUCTION 1. Regional integration remains a key strategy for African Governments to accelerate the transformation of their fragmented small economies to expand markets and widen the region s economic space so as to reap the benefits of economies of scale for production and trade, and thereby maximize the welfare of their nations. Recognisance of this, African leaders have taken a number of initiatives, through various African Union Decisions aimed at advancing the regional integration process in Africa. These include: the transformation of the Organization of the African Unity (OAU) into the African Union (AU), the New Partnership for Africa s Development (NEPAD), the development of Minimum Integration Programmes, and the rationalization of the RECs through the moratorium on the creation of new RECs, and the recognition of only eight (8) RECs as the main building blocs of the African Union. 2. There is no doubt that African countries have been pursuing integration programmes for a very long time. Since the 1960s, many integration groupings have emerged and faded away. Examples of earlier groupings are the African Common Market comprising Algeria, Egypt, Ghana, Guinea, Mali and Morocco in 1962; the Equatorial Customs Union composed of Cameroon, Central African Republic, Chad, Congo and Gabon in 1962, which eventually led to the present Central African Economic and Monetary Community; and the former East African Community (EAC) comprising Kenya, Tanzania and Uganda in 1967, which until its demise, was the most developed of all the integration experiences in Africa. New groupings have since emerged, reflecting the continued belief and commitment by African countries in the virtue and importance of economic cooperation and integration. 3. Formation of the Organisation of the African Unity (OAU), now the African Union (AU) is one step ahead by African leaders in promoting continental unity. Since the formation of the OAU, significant efforts have been put in place aimed at accelerating regional integration. Despite these efforts, African countries continue to face enormous challenges in implementing regional integration agenda. The slow pace of Africa's regional integration has been largely attributed to numerous challenges currently affecting the continent, including inadequacy of finance resources, macro economic instability, poor governance, conflicts and war, prevalence of HIV and AIDS, which is heavily affecting the human capacity, and numerous sub groupings. 4. Despite Africa s overall weak economic stature, it can, however, be argued demonstrably that the continent has made notable progress towards regional integration. 1 The political keenness to make progress is visible, even if the political rhetoric on Africa s integration is not always accompanied by commensurate actions. Nonetheless, there is a stark realization by African political leaders that much remains to be done to achieve the goals of the AEC. The 1 ARIA I, published by ECA in May 2004, provides a comprehensive picture of progress in Africa s regional integration. Three years on, much of the analysis on progress remains valid and relevant. 2

3 Assembly of the African Union, meeting at its Ninth Ordinary Session in Accra, Ghana, in July 2007, adopted the Accra Declaration 2 aimed at accelerating the economic and political integration of the African continent, including the formation of a Union Government for Africa with the ultimate objective of creating the United States of Africa. Consequently, the Summit agreed on a roadmap of studies to identify the contents of the Union Government concept and its relations with national governments. 5. The Organization of African Union Charter and the Constitutive Act establishing the African Union provide a path to the continental integration which will be achieved through the framework of economic, political and institutional mechanism as spelt out in the Abuja Treaty. Furthermore, the Abuja Treaty calls for creation of a continent-wide African Economic Community (EAC) which outlines the six stages for the achievement of this continental Unity. (See box on phases of the AEC).3 Today, a number of pan African institutions as well as regional groupings are implementing the activities and programmes, in line with the Abuja Treaty, in order to achieve the envisaged continental integration. Table 1.1: The six Stages as outlined in the Abuja Treaty Box 1.1: Phases of the AEC Founded through the Abuja Treaty signed in 1991 and entered into force in 1994, the AEC was envisioned to be created in six stages: i. Creation of regional blocs in regions where such do not yet exist (to be completed in 1999); ii. Strengthening of intra-rec integration and inter-rec harmonization (to be completed in 2007); iii. Establishing of a free trade area and customs union in each regional bloc (to be completed in 2017); iv. Establishing of a continent-wide customs union and thus also a free trade area (to be completed in 2019); v. Establishing of a continent-wide African Common Market or ACM (to be completed in 2023); and vi. Establishing of a continent-wide economic and monetary union (and thus also a currency union) and pan-african Parliament (to be completed in 2028). 6. This paper tries to analyse the following: (i) status of regional integration in Africa; (ii) achievements made by pan-african institutions in implementing regional integration agenda; (iii) initiatives currently being undertaken in the area of regional integration; (iv) challenges of regional integration in Africa. It also provides recommendations as well as solutions aimed at addressing the challenges. The outcome from the discussion will provide an opportunity for policymakers to examine the current situation of regional integration, including the challenges so 2 Assembly/AU/Decl.2(IX) 3 The AEC has since been ratified by all countries of the African Union (Morocco withdrew from the OAU and is therefore not a member of the African Union). 3

4 as to develop necessary policy measures and recommendations for effectively governing the implementation of Decisions and actions relating to regional integration. 2.0 Thematic progress and challenges 2.1 Trade and market integration 7. Despite regional integration being the matter of subject by pan-african institutions, significant achievements in terms of trade development seem to be lower than expected compared to the rest of the world. In general, intra-regional trade flows in Africa have been generally low compared to other regions. This has largely been contributed by, among others, poor infrastructure development, maintenance and connectivity; peace and security situation among the regions; and existence of trade barriers. 8. Effective regional infrastructure is perquisite for the acceleration of regional integration in Africa. Well developed infrastructure will significantly contribute to increased volumes of intra African trade. Thus, the Common Market will lead to the free movement of labour, capital, goods and services within the regions and open up employment opportunities for people within the regions. However, a number of continent's railways and roads often lead to marine ports rather than linking countries across the Continent. In addition, the internal water ways are insufficiently utilized and in most cases not well developed, making it very difficult to conduct business among Africa countries. There is need to develop linkages among African regions which would largely improve movements of goods and services. 9. Current studies have revealed that Regional Trade Arrangements (RTAs) in Africa have been instrumental in promoting trade and foreign direct investment. However, more need to be done in order to accelerate the process. These include, removal of both tariff and non tariff barriers; implementation of decisions aimed at accelerating regional integration in Africa; and improvement of infrastructure developments, including the Programmes of Infrastructure Development in Africa (PIDA). Trade barriers make it difficult for African countries to reap the full potential benefits of RTAs. To increase regional trade and investment, it is imperative that African countries should undertake a more broad-based liberalization and streamline existing RTAs, supported by improvements in infrastructure and trade facilitation. 10. The RECs continue to play a significant role in achieving Africa s regional integration vision by pursuing and implementing various programmes. In the area of trade and market integration, some RECs such as ECOWAS, ECCAS, COMESA, SADC and EAC have established their Free Trade Areas while others such as CEN-SAD are steadily working towards this objective. Furthermore, EAC has been a full Customs Union since 2005, while COMESA launched its customs union more recently in ECOWAS is expected to launch its Customs Union by The Customs Union agenda of SADC and ECCAS, which was envisaged to materialize in 2010, is now expected to be launched during UMA, CEN-SAD, and IGAD are yet to implement their Customs Union in the near future. In addition to these strides, there is a momentum among some RECs to harmonize their FTA agendas to create larger trading blocs. The on-going initiative on the grand FTA (SADC, COMESA and EAC) is a good example of this new trend towards unifying the sub-regional markets. The table below summarizes the status 4

5 of efforts aimed at establishing free trade areas and customs unions in the eight RECs as recognised by the African Union. Table 2.1: Regional blocs - pillars of the African Economic Community (AEC) REC Milestone Free Trade Area Customs union AMU No progress No progress CEN-SAD In progress No progress ECOWAS Established In progress ECCAS Created and in force Proposed for 2011 COMESA Established Launched EAC Established In full force IGAD In progress No progress SADC Launched Proposed for 2011 Source: ARIA IV 3.0 Free movement of persons, goods and services 11. It is well documented that free movement of persons, goods, services and capital is an essential for regional integration. There is need for all the RECs to agree and adopt concrete measures aimed at achieving the free movement of persons, labour and services and to ensure the enjoyment of the right of establishment and residence of their citizens within the Community. The implementation of the agreed measures should be implemented through, the following, among others: i. Easing border crossing by citizens of the Partner States; ii. Opening and keeping border posts open for twenty four hours; iii. Maintaining common standard travel documents for their citizens; and iv. Harmonizing and maintaining common employment/labour policies, programmes and legislation. 12. While free movement of persons, goods and services among the RECs is recognized as one of the most important aspects of regional integration, it is also an area which is complex and challenging. Some of these challenges include: (i) National Security issues; (ii) protection of national employments; (iii) protection of infant industries; (iv) lack of adequate mechanisms exist to facilitate and manage Labor Mobility within the region and beyond; (v) lack of reliable Labour market information; and (vi) Non recognition of different education/professional certificates within the regions. Despite this being the case, efforts are being made by all the RECs to address the above mentioned challenges. Below are some of the achievements encountered by the RECs in promoting free movement of person, goods and services. 13. ECOWAS: Six countries in ECOWAS are already using one passport for the region and are allowed to travel in any country of the region without a visa, in replacement of the national passports. These countries are: Benin, Cote d Ivoire, Guinea, Liberia, Niger, Nigeria, Senegal, 5

6 and Togo. This passport allows ECOWAS citizens to travel around the region without a visa. Since 2005, ECOWAS has also embarked on a transformation process of the border regions into pilots units in order to facilitate the free movement of persons living along the borders. Furthermore, the Authority of Heads of States and Government adopted a Decision calling for national committees to be established so as to monitor the implementation of ECOWAS Decisions and Protocols on free movement of persons and vehicles. 14. ECCAS: Among the RECs, ECCAS is one of the regions that lag behind in terms of regional integration, particularly free movement of persons, goods, and services. The lag is largely contributed by the poor infrastructure network and the imposition of visas between some member States because of security reasons. Despite this, ECCAS is making efforts to improve the situation. For instance, a convention on cooperation and legal aid has been concluded which is expected to be adopted by the Assembly of Heads of State and Government. Once adopted, the region will start the implementation of the Protocol on the free movement of persons which was adopted in January COMESA: Recently, the region has made significant progress in the area of free movement of persons. For instance, a number of COMESA Member States treat visa issues with great flexibility and in most cases, people within the region get visa upon arrival at the airport. In addition, the region has adopted two protocols one on Free Movement of Persons, Labour, Services, Right of Establishment and Right of Residence and another on the Gradual Relaxation and Eventual Elimination of visas. 16. EAC: The region is one of the most dynamic African RECs in terms of regional integration. In particularly, significant progress has been made in the area of free movement of persons, goods and services. These include: (i) A common passport which allows multiple entries and exits to citizens from a EAC Member State for a period of six months; (ii) the project to establish a single tourist visa for the region; and (iii) the East African Common Market Protocol, which was launched by 2010, which includes the issue of free movement of persons, goods and services across the region. 17. SADC: Just like ECCAS, SADC lags behind in terms of its regional integration with respect to free movement of persons. Not much has been done in the implementation of the Protocol regarding Visa Exemption Agreements for SADC citizens. Efforts are being made at the highest level to urgently implement the SADC protocol on visa in order to facilitate movement of persons, goods and services. These include: harmonizing custom procedures and instruments adoption of a single administrative document (SADC CD); and creation of nomenclature of common tariffs. 18. IGAD and CEN-SAD: These two RECs also lag behind in the implementing protocols relating to the free movement of persons, goods and services. For instance, IGAD is the only REC which has not elaborated a protocol on the free movement of persons, right of residence and establishment. CEN-SAD is also encountering problems in implementing this activity. None of them has developed a protocol on free movement of persons, goods and services. 6

7 19. Despite these problems, efforts are being made by these RECs aimed at addressing and fast-tasking the process. For instance, IGAD has set up a resource center on migration within its Secretariat and plans to create a Visa Exemption for Africans holding diplomatic and service passports. CEN-SAD has already adopted the visas exemption, thanks to the Article 2 of its Treaty on the Establishment of the Community. The CEN-SAD Visas Exemption also concerns members of official delegations, holders of regular passports whose entry would have been the subject of prior arrangements and family members (spouse and infant children) of a resident who have a valid residence permit. For improving the security cooperation and the struggle against terrorism, CEN-SAD is setting up some security instruments within the region. 4.0 Macro-economic policy convergence 20. Effective implementation of monetary integration is a perquisite for the creation of African Economic Community. Stable economies in terms of their inflation, interest rates, and levels of employment, among others, are instrumental in the attainment of regional integration among African countries. There is no doubt that prudent macro-economic policies would bring economic growth and sustainable development; price stability among the regions; and promotion of trade flows, among others. 21. Recognizance of this importance, a number of Regional Economic Communities have developed and adopted formal frameworks, aimed at facilitating the harmonization and coordination of convergence of national economic structures and macroeconomic policies. In addition, some RECs such as UEMOA, ECOWAS, COMESA, EAC and CEMAC have already established macroeconomic convergence programs. However, these programmes have different targets and objectives. For instance, COMESA is targeting to establish common currency for the union by RECs macroeconomic convergence criteria Inflation rates (Average) RECs Average COMESA EAC ECOWAS SADC UEMOA CEMAC IGAD MRU ECCAS CEN-SAD Source: ECA, compiled from World Bank website 7

8 Progress of the inflation rate ( ) 22. Almost all the RECs, except UEMOA and CEMAC recorded the highest inflation rates between 2003 and 2009, the highest figure being per cent for MRU. One of the reasons contributing to the low rates in UEMOA and CEMAC is the fact that they are both monetary unions, which mandate their Central Banks to control their monetary policy. 23. In 2008, most of the RECs except UEMOA recorded a double digit inflation rates. Major factors contributing to this, include: the increase of fuel prices; increase in foods; and the financial crisis. In COMESA, the highest rate has been registered in Ethiopia with per cent in 2008, in Kenya 27 per cent and in Seychelles per cent. The Kenya high inflation rate is explained by political conflicts that occurred in the country at that period. For Seychelles, it is explained by the depreciation of the rupee, the local currency. Growth performance - GDP (average) RECs Average COMESA EAC ECOWAS SADC UEMOA CEMAC IGAD MRU ECCAS CEN-SAD Source: ECA, compiled from World Bank Website Progress of the growth performance ( ) 24. The EAC region has registered the best performance with an average growth of 6.3 per cent between 2003 and 2009, which is near the 7 per cent growth rate, required to achieve the objective 1 of the Millennium Development Goal. COMESA recorded average growth rate of above 4 per cent except in 2003 when its growth rate was below 2.5 per cent. On average, all the RECs recorded growth rate between 3 to 6 per cent with the majority of them below 5 per cent. 25. In general, growth performance for all the RECs has been fluctuating during the period under review. A number of reasons could explain this fluctuation, including changes in the production levels of their main products; changes in FDI flows; governance issues; global financial crisis, among others. 8

9 4.0 Physical integration 26. Fully functional infrastructure is essential for trade facilitation, poverty reduction, and movement of goods from one country to another. The country continues to have deficiencies, particularly in the area of transport, communications and hydro-energetic supply. Recognizing the above problem, African leaders have put emphasis on the infrastructure development. This is why infrastructure development has been mainstreamed in the treaties of all Regional Economic Communities which provide the needed framework for the effective infrastructure development of the continent. Below, are some of the achievements and challenges being faced by African countries in selected areas. 4.1 Transport 27. Transport is key in facilitating free movement of persons, goods and services, particularly in landlocked countries. This is why infrastructure development as a tool for achieving regional integration for sustained economic development has been in the minds of African leaders way back in the 1970s. However, a number of countries in Africa continue to face the problem of poor infrastructure. The Workshop on Trade Facilitation and Aid for Trade, held in Addis Ababa, in March 2009, highlighted deficiencies in the area of transport in Africa such as inadequate infrastructures, lack of regional infrastructure development, and numerous checkpoints (which contribute to high transport costs of doing business). The creation of corridors, the renovation of roads, the elimination of physical and non-physical barriers, the set up of transport services are key to the acceleration of regional integration and trade facilitation in Africa. 28. Efforts are being made by the RECs, member States, AUC, ECA, AfDB, and other pan- African institutions in order to improve the poor infrastructure networks in Africa. This is why two decades from 1978 up to 2000 were devoted to the programme of the United Nations Transport and Communications Decade in Africa (UNTACDA), supplemented by the Sub- Saharan Africa Transport Policy Programme (SSATP), for the development of these sectors. Recently, some Decisions had been taken by the Heads of States and Government to implement the infrastructure programmes including the NEPAD Medium to Long Term Strategic Framework (MLTSF); and he Programme for Infrastructure Development in Africa (PIDA). 29. Current status of infrastructure developments in Africa remains mixed. Some sectors have recorded significant progress compared to others. The current situation in the continent is by and large unsatisfactory characterized by insufficient and low quality infrastructure on the one hand, and inefficient and expensive services on the other. For example, the total length of classified road networks in Africa is estimated to be about 2.3 million km, of which 20 per cent is paved. This is against the required or the desired level of social and economic development which is estimated at an average of 7.6 km per 100 sq. km. Other roads development include: Trans-African Highway 1 (TAH1); Trans-African Highway 5 (TAH5), and Trans-African Highway 7 (TAH7). 9

10 30. The picture in the railway network is not very satisfactory compared with that of roads. Africa s railway network comprises about 89,000 km for an area of about 29.6 million sq km, representing a density of about 2.5 km per 1,000 sq. km. This is much lower compared with 40km per 1,000 sq. km for Europe. Nearly 14 mainland countries in Africa do not have railway lines or sections of international lines. In addition, railway network Africa is generally old and technically outdated. The poor railway network has resulted into low share of rail freight in intra- African trade. More investments need to be done in order to improve the situation. 32. Global picture of Africa's share in air transport remains modest. However, this modest growth relies only on three major hubs, namely, Johannesburg, Nairobi and Addis Ababa. The South African Airways, Kenya Airways and Ethiopian Airlines remain the three major airlines in Africa. In 2004, Africa s share stood at about 5.2 per cent of the passenger traffic and approximately 3.6 per cent for freight. During the same year, the sector generated 470,000 employment opportunities in the continent resulting into an income estimated at US$ 11.3 billion (1.7 percent share in the African GDP). In addition to job opportunities, air freight plays a growing role in the competitiveness of goods in world markets for high-value, time-sensitive cargo (such as horticultural and floricultural products), particularly to landlocked countries. 4.2 Peace and security 33. Peace and security continue to be one of the major challenges affecting Africa s integration and development efforts. This is why Peace and Security has been acknowledged as critical to creation of the right environment upon which regional integration in all aspects can be fostered. To date, a number of African countries continue to experience conflicts and civil wars which has adversely impacted on the implementation of regional integration activities and programmes. The destructive and recurrent nature of these conflicts has had far-reaching consequences on the state, the region and the continent as a whole, creating an environment of perpetual insecurity. 34. The high intensity of conflict in many cases and the protracted nature of conflicts in others have resulted in massive loss of human life, displacement of people, high numbers of refugees, child soldiers, high incidence of vulnerability and social exclusion, destruction of socio-economic infrastructure, and erosion of institutional capacity. The conflict situation in Africa has exacerbated poverty across the continent and made it even more difficult to accelerate economic growth and the Africa s development agenda. 35. Efforts are being made by the RECs and well as member States in addressing the conflict situation in Africa. Below are some of the initiatives by the RECs: 36. COMESA: The COMESA programmes on Peace and Security continue to address conflicts throughout the region. Areas covered include: conflict prevention, conflict management, conflict resolution and post conflict reconstruction and development. Implementation of activities and programmes is done through a committee comprising of senior officials in the Ministries of Foreign Affairs called the Committee on Peace and Security, which meet at least once every year to discuss the modalities of peace and security in the region and its recommendations are further discussed by the Ministers of Foreign Affairs. Furthermore, 10

11 implementation is done in conjunction with three strategic stakeholders, namely, Civil Society Organizations (CSOs) and Private Sector Organizations (PSOs); Parliamentarians, through Inter- Parliamentary Forum; and elected five Committee of Elders, which serves for a period of four years. 37. SADC: The Region started engaged in Regional Peacekeeping Training Centre, (SADC RPTC) back to the early 90's when the SADC Member States began to be active in United Nations peace support operations. The region has established the SADC Brigade, which is one of the pillars of the African Standby Force (ASF). Its core objective is to create a peaceful and politically stable and secure environment. Since its establishment, the RPTC has achieved the following, among others: i. Training courses for peacekeeping practitioners from the SADC region and other parts of Africa; ii. Contribute to the implementation of the SADC BRIGADE training needs; iii. Participated in the preparation and running of all major peacekeeping exercises conducted in the region including, Zimbabwe (1997), South Africa (1999), Tanzania(2002), Botswana (2005), and South Africa in 2009; and iv. Support in the implementation of the SADC Strategic Indicative Plan for the Organ (SIPO) in area of peace keeping training. 38. ECOWAS: The Union is acknowledged as one of the most advanced Peace and Security Secretariat in Africa and has recently intervened in a number of political and military situations in the West Africa sub-region. Through ECOWAS Ceasefire Monitoring Group (ECOMOG), which is a sub-regional peacekeeping force, the region has achieved a lot. Results include interventions in Liberia s bloody civil war, military coup in Sierra Leone, Guinea Bissau, and in Cote D Ivoire in Other achievements include: the establishment of its peace and security framework and architecture; the adoption and implementation of ground-breaking normative, institutional and legal frameworks for conflict prevention, management, resolution, peacekeeping and peace-building in the ECOWAS region; the adoption and effective application of constitutional convergence principles with an accompanying sanctions regime, the institutionalization of home-grown strategies in preventive diplomacy and military intervention; and the adoption of the ECOWAS Strategic Vision and the ECOWAS Conflict Prevention Framework as an operational tool for meeting the proximate and structural challenges to human security. 39. Despite these achievements, ECOWAS continue to face challenges particularly regarding its Protocols on peace and security. On paper, the protocols remain a viable framework for addressing conflict and security issues in West Africa. However, the Community has been unable to systematically translate its provisions into concrete impact on the ground. In addition, ECOWAS is not able to effectively address the critical human security-related problems in the sub-region that transcend traditional conflicts (These include rampant poverty, devastating health pandemics such as HIV/AIDS). 40. IGAD: One of three priority programme areas at IGAD is Conflict Prevention, Management, Resolution and Humanitarian Affairs. Achievements include: involvement in 11

12 activities and programs in Post-Agreement follow up of Peace Initiatives of both Sudan and Somalia conflicts; development of counter terrorism strategy; Coordination of the Eastern Africa Standby Brigade (EASBRIG), Small Arms and Light Weapons, Landmines. In addition, IGAD coordinates the activities of two Addis Ababa-based institutions the IGAD Capacity Building Program Against Terrorism (ICPAT), and the Conflict Early Warning and Early Response Mechanism (CEWARN) secretariat. 41. Despite its successes in the peace and security domain, IGAD faces a number of major challenges that threaten its future effectiveness. IGAD s biggest challenge is an acute shortage of personnel, with its modest secretariat dwarfed by the Authority s expansive mandate and multiple objectives and organs. In recent years donor concerns have led to a series of evaluations that have reviewed IGAD s effectiveness, with the result that internal capacity has been partially strengthened in areas such as strategic planning and human resource management. However, while staff members are technically skilled, they lack supporting capacities, including in resource mobilization, performance planning and monitoring, mentoring, negotiation, dialogue facilitation, and building participatory and collaborative partnerships. 5. Initiatives at Continental level 42. The African Union, which is a Continental body, continues to engage in numerous activities and programmes in the area of regional integration. More focus has been in the implementation of the Abuja Treaty. As indicated earlier, the African Union Commission, in close collaboration with the RECs has developed the Minimum Integration Programme which comprises a set of activities, projects and programmes to be implemented by the RECs in order to accelerate the regional and continental integration process. The MIP has identified the following key areas of the integration agenda to focus on: trade, infrastructure development, free movement of people, and peace and security. The MIP was endorsed by the Conference of African Ministers In-Charge of Regional Integration and subsequently approved by the AU Assembly. 43. The African Union Commission has developed an Implementation Action Plan to deliver on the MIP. However, the Plan currently faces a number of challenges including lack of funding. Efforts are, however, being made by implementing agencies (RECs, Member States, AUC) to mobilise resources for the implementation of the Implementation Action Plan. Paramount to these efforts is a proposal by the African Union to establish an Integration Fund dedicated to funding the activities and programmes of the MIP. This initiative has been approved by the AU Assembly and the Commission will soon undertake a prefeasibility study on the establishment of the Fund. Furthermore, the RECs are in the process of mainstreaming the Action Plan into their programmes and sensitizing their member States about it. 44. In an effort to accelerate infrastructure development of the Continent, the African Union the African Development Bank, the New Partnership for Africa s Development (NEPAD is a program), as well as the Regional Economic Communities, are currently in the process of formulating the Programme for Infrastructure Development in Africa (PIDA). The overall objectives of PIDA is to promote socio-economic development and poverty reduction in Africa 12

13 through improved access to integrated regional and continental infrastructure networks and services. 45. In monetary integration, the AUC has also made tremendous efforts and progress, particularly regarding to the establishment of the three pan-african financial institutions, namely the African Central Bank (ACB), African Monetary Fund (AMF), and African Investment Bank (AIB). For instance, the protocols on AMF and AIB had been adopted by the AU Assembly. In addition to the adoption, the AIB protocol had been signed by at least 15 Member States. However, only one country has ratified the protocol. This is a big challenge and has a big impact on the actual establishment of the Bank. 46. The AU Assembly also took a Decision to put a moratorium on creation of new RECs in order to concentrate on the harmonization of their policies and programmes. Apparently, there are number of RECs and sub-groupings which are engaged in similar activities and programmes relating to regional integration. There no doubt that the Decision assist in reducing the financial contributions from the member States to the RECs towards the implementation of programmmes and activities. In addition to the problem of overlapping memberships, a number of challenges still remain. These include: lack a strong industrial capacity to produce diversified manufactured goods for trade within regional markets; lack of national currencies convertibility; high cost of doing business mainly due in part to infrastructure gaps; duplicative border procedures and cumbersome paper requirements; and constraints in the free movement of people and the right of establishment in some Member States. Below are the eight AU recognized RECs as well as some sub-regional groupings: The main RECs and their corresponding sub-groupings Main RECs recognized by the African Sub-groups 5 Union as pillars of the AEC 4 Community of Sahel-Saharan States (CEN- SAD) Common Market for Eastern and Southern Africa (COMESA) East African Community (EAC) Economic Community of Central African Economic and Monetary Community of Central States (ECCAS/CEEAC) Economic Community of West African States (ECOWAS) Intergovernmental Authority on Africa (CEMAC) West African Economic and Monetary Union (UEMOA), West African Monetary Zone (WAMZ) 4 In order to address the issue of multiplicity of RECs and overlapping memberships, the AU Summit held in Banjul in July 2006 decided to put a moratorium on the recognition of new RECs. The problems associated with multiple memberships of RECs are discussed extensively in ARIA II: Rationalizing Regional Economic Communities, UNECA, In addition, the Mano River Union (MRU), the Indian Ocean Commission (IOC) and the Economic Community of the Great Lakes Countries (CEPGL) are subregional groupings engaged in promoting regional integration among their member States. 13

14 Development (IGAD) Southern African Development Community (SADC) Arab Maghreb Union (AMU/UMA) Southern African Customs Union (SACU) 6.0 Proposed Africa s Free Trade Areas (FTA) 47. In an effort to fast track the attainment of the African Economic Community, as outlined in the Abuja Treaty, a number of activities and programmes are being implemented by Regional Economic Communities. These include the recent Decision by Heads of State and Government of the COMESA, SADC, and EAC Member States to establish a single FTA as mentioned earlier. The inter-regional Economic Communities FTA is expected to help enlarge African markets, unlock productive potential, and increase intra-africa trade. It would also help to facilitate free movement of business persons across the RECs by opening up the borders, while making the enlarged market and economic bloc more attractive to foreign direct investments, in particular those motivated by economics of scale. 48. The Grand FTA is expected to cover a number of areas including: promotion of customs cooperation and trade facilitation, harmonisation and coordination of industrial and health standards, combating of unfair trade practices and import surges, use of peaceful and agreed dispute settlement mechanisms. The Tripartite FTA will be underpinned by robust infrastructure programs designed to consolidate the regional market through interconnectivity (facilitated for instance by all modes of transport and telecommunication. It is also expected that the Tripartite FTA will create large market, with a single economic space which will attract investment and hence large scale production. 49. Implementation of the grand FTA will not be an easy path. This will require, among others the following: i. Strong political will by the Heads of State and Governments of countries of the three RECs for the smooth implementation of the FTA; ii. The Secretariats of COMESA, EAC, and SADC to take in to consideration the implications of rules of origin already existing in the three RECs vis a vis the rules of origin of the APAs; iii. Preferential treatment to be given to the countries with small economies within the three RECs; and iv. More resources to be made available to countries that are most likely to lose huge revenues as result of the creation of a single FTA. 50. To help accelerate the achievement of inter-ftas in Africa, the United Nations Economic Commission for Africa (UNECA) is in the process of carrying out a study, which will, among other things, analyze its impact on African economies, assess the benefits and costs to countries, and the impact on REC s efficiency and effectiveness. The study would also address the impact of inter-recs FTA on the Economic Partnership Agreements that the African 14

15 countries are currently negotiating with the European Union. The study will assist countries to make informed decisions on their participation in the inter-rec FTAs. 7.0 Challenges 51. Despite these efforts, RECs face enormous challenges, including the one of overlapping memberships. At the moment, many of African countries are members of more than one regional grouping. Countries join regional economic communities for a number of legitimate reasons. However, the most well known reasons are political and economic reasons. Although there are different reasons attributed to overlapping memberships, many studies reveals that many African sub regions are set to achieve similar objectives, hence the overlapping membership is described as a waste of resources and duplication of efforts. Member States not only face financial obligations in term of their subscription to these RECs, but also some difficulties in attending many meetings and adjustment of policies in line with those being stated in different RECs, where they belong. To the big extent, overlapping memberships has significantly impeded a number of RECs in achieving some of the stages of the Abuja Treaty, including, a free trade area, a customs union and a common market. In addition to the overlapping memberships, several of these building blocks also include sub-groups with customs, monetary and economic union aspirations of their own. Other challenges include: i. persistent barriers to trade despite some of them having already signed cross border trader provisions; unrecorded by the small scale or informal among the regions; ii. accession of all Member States to some of the agreed RECs Decisions, including those on FTA; iii. political reasons; iv. lack of financial and human resources among the RECs; v. Overlapping memberships and duplication of activities and programmes; vi. Lack of coordinated regional and continental wide approach on programmes and activities; and vii. Persistence of conflicts among the member States of some RECs. 8.0 Conclusion and Recommendations 52. Despite numerous challenges, a number of RECs have recorded significant progress in terms of regional integration process. However, more need to be done in order to accelerate the process. Implementation of minimum Integration Programme (MIP) can be cited as one of the major programme to be seriously taken on board by the RECs if regional integration is to become a reality. African countries need to implement various decisions, adopted by the African Heads of State and Government pertaining to regional integration. Accordingly, the following should be considered: i. Members states, particularly policymakers should consider regional integration as part of their broader strategic development package; 15

16 ii. Integration of Africa s fragmented markets in order to attract the huge investments, both from Africa and the rest of the world, as well assist in building competitive and more diversified economies; iii. There is need to develop linkages among African regions which would largely improve movements of goods and services; iv. Member States, RECs, and other pan-african institutions to support for the implementation of MIP; v. Member States to facilitate the ratification and implementation of all the Protocols related to integration matters; and vi. Efforts should be made to encourage the establishment of inter-rec FTAs. The steps taken by COMESA, EAC and SADC to form one single market are commendable as it contributes to the promotion of trade within the three RECs; 16

17 References African Union (AU), 2009, Status of integration in Africa (SIA). AU: Addis Ababa, Ethiopia; ECOWAS, 2009, ECOWAS ministers pledge to improve security in the region, article from Press Release, N 118/2009, 6 November 2009, Abuja, Nigeria; Maxwell Mkwezalamba and Emmanuel Chinyama; Implementation of Africa s Integration and Development Agenda: Challenges and Prospects. African Integration Review. Vol. 1, Addis Ababa Ethiopia; OECD, 2009, African Economic Outlook 2009, Paris, France; UEMOA, 2008, Rapport annuel de la Commission sur le fonctionnement et l évolution de l Union 2008, Ouagadougou, Burkina Faso ; United Nations Economic Commission for Africa (ECA), 2009, Developments in intra-trade in Africa. Paper presented at the Sixth Session of the Committee on Trade, Regional Cooperation and Integration, Addis Ababa, Ethiopia, October 2009; United Nations Economic Commission for Africa (ECA), The transport situation in Africa. Paper presented at the Sixth Session of the Committee on Trade, Regional Cooperation and Integration, Addis Ababa, Ethiopia, October 2009; United Nations Economic Commission for Africa, Sub regional Office for Eastern Africa (ECA/SRO-EA), 2009, Tracking Progress on Implementing ICTs for Development in Eastern Africa : Report on economic and social conditions of the Eastern Africa sub region Paper presented at the 13 th Meeting of the Intergovernmental Committee of Experts (ICE), Mahe, Seychelles, April 2009; United Nations Economic Commission for Africa (ECA), 2008, Assessing Regional Integration in Africa (ARIA III): Towards Monetary and Financial Integration in Africa. ECA: Addis Ababa, Ethiopia; United Nations Economic Commission for Africa (ECA), 2008, Assessing Regional Integration in Africa (ARIA IV): Enchasing Intra-African Trade. ECA: Addis Ababa, Ethiopia; World Trade Organization (WTO), 2009, International Trade Statistics 2009, Geneva, Switzerland; African Union Commission (AUC), Status of Integration in Africa, Addis Ababa. Web references