34 AU INITIATIVES
The desire to bring about economic integration in Africa
goes back to the early 19th century. Numerous programs to promote integration have been worked on, driven by a collective desire to create a common market and increase bargaining power for all African countries. In more recent years, combating trans-boundary issues such as climate change, water and HIV/AIDS has also become part of the agenda. Last, but not least, there is also a collective aim to build a robust framework for coordination and to prevent conflict across the continent.
The RECs that were created to work toward these objectives initially are:
ECOWAS – Economic Community of West African States in the West African region ECCAS – Economic Community of Central African States in the Central region COMESA – Common Market for East and Southern Africa in the East and Southern region SADC – Southern African Development Community in the Southern Region CEN-SAD – Community of Sahel-Saharan States IGAD – Intergovernmental Authority on Development EAC – East African Community AMU – Arab Maghreb Union
The stages are to be mainly activities of the RECs
(existing and future), with the objective of establishing the AEC. The six stages may vary in duration, and the cumulative transitional period is not to exceed 40 years from the date the Abuja Treaty came into force (see diagram, facing page). Most RECs have been prioritizing macroeconomic
policy harmonization by including provisions in their treaties and protocols as a means of achieving their integration and developmental objectives. The general belief has been that rapid economic growth and development cannot be achieved without overcoming the constraints of small populations and economies. The current statistics indicate that 38 of the 54 countries in the African Union have 15 million people or fewer, and one-third have populations of three million or fewer. What makes the process additionally challenging is that of the 46 least-developed countries in the world, 31 are in Africa. However, overall, the RECs have made significant
progress in the continental integration process by developing Minimum Integration Programmes (MIPs), as well as by working towards establishing three pan-African financial
INVEST IN AFRICA 2011
institutions – the African Central Bank, the African Monetary Fund and the African Investment Bank. RECs have also developed a template designed to guide negotiations for Economic Partnership Agreements (EPAs). Further, in October 2008, the heads of the Southern African Development Community, the Common Market for Eastern and Southern Africa and the East African Community announced at the EAC-SADC-COMESA Summit a proposal for the African Free Trade Zone (AFTZ), also known as the African Free Trade Area. The AFTZ would be comprised of 26 countries with a combined GDP of around US$624bn, with the aim of easing access to markets within the area. Overall economic progress, it was hoped, would
facilitate the process of political and social cohesion and unity. The speed of the process would be increased by the New Partnership for Africa’s Development (NEPAD), established by the AU in 2001, and which aimed to deal with the political and socio-economic transformation of Africa. Later, in 2010, the NEPAD Planning and Coordinating Agency (NEPAD Agency) was created to integrate with the AU, the main objective being to create plans at the continental (NEPAD/AU), regional (REC) and country levels. The aim of this move is to, finally, bring about regional integration, with the free movement of people and intra-African trade. Additionally, a lot of effort has gone into improving programs for the energy, transport and communications sectors, following the new partnership between NEPAD, AU and RECs, as well as between their technical-sector organizations. The AU’s peace mission and poverty alleviation will pave
the way for a higher and better life expectancy in the African continent. Economic development achieved through integration can enable Africa to become more sustainable and self-reliant. With the emergence of NEPAD, key factors such as foreign direct investment (FDI) have been addressed – potentially useful if Africa is to practice self-reliance, which, in effect, is strongly linked to trade, investment and technological development. It is hoped that FDI will come mainly from private
investments. In fact, in May 2011 Reuters reported that FDI levels could even increase to $150 billion by 2015, as emerging-market investors search for higher returns and perceptions of risk improve. This projection means that the economic, political and social efforts and improvements made by the African community have been recognized. The risks, as recognized by potential investors, may still be high. But, evaluating at the prospects and weighing up the potential, the gains appear to be too lucrative to miss. n
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