Prospects for Regional Economic Integration in Africa

LAGOS (Capital Markets in Africa) – Africa has over the years, especially since the 1960s, 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 for African Unity, the African Union was put in place in 2002 and a continental peace and security architecture established 2003, eight regional economic communities were formally recognised in 2006, the COMESA-EAC-SADC Tripartite Arrangement was agreed in 2008, and the African Continental Free Trade Area has just entered into force on 30 May 2019.

The entry into force of the African Continental Free Trade Area is a turning point in African history. At the market of over 1.2 billion people, and consumer and business spending already over US$4 trillion annually and estimated to hit US$5.6 trillion annually by 2025, has opened up for economic operators to pursue.

The private sector is awake to these prospects and is mobilising. 125 companies already have a multinational presence across Africa and a number of developed countries. The Afrochampions club of leading companies has been formed. Over 400 African companies have revenues of over US $ 1 billion. Foreign investors such as Volkswagen and Toyota are planning heavy investments in the automobile sector across Africa.

An introspection 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.

Strategy 
In order to deal with public policy challenges of peace and prosperity, through ensuring better security and creating decent jobs and wealth, Africa has adopted the overarching strategy of developmental integration that is progressive, as a process rather than an event, written out into a long term vision that is mapped out and codified. Such a feat is feasible but requires political leadership and the inter-governmental social-political processes for norm-setting.

The Treaty for establishing the African Economic Community, which was adopted in 1991 and entered force in 1994, sets out the long term vision of establishing the African Economic and Monetary Union by 2028, over six successive stages that are mapped out and codified in the Treaty. In practice, though, elements from the various stages are implemented concurrently.

The Treaty has informed the constitutive instruments and integration programs of the various African regional economic communities such as the East African Community and the Economic Community of West African States; eight of them now formally recognised, as building blocs for continental integration. The African Union in 2006 imposed a moratorium on the formation of any new ones.

The COMESA Treaty, for instance, states in its Article 178 that its ultimate goal is to support continental integration and become an organic entity of the African Economic Community. The other regional economic communities make reference in their preambles to being building blocs for Continental integration.

An extract from the INTO AFRICA July 2019 Edition: Trading Africa’s Prosperity. The article is written by Francis Mangeni, Director, Trade and Customs, Common Market for Eastern and Southern Africa. To read the full article, please download by clicking: INTO AFRICA PUBLICATION: July 2019 EDITION.