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THE CHALLENGES AND PROSPECTS OF PAN-AFRICAN ECONOMIC INTEGRATION BY Dr. Kinfe Abraham top A Paper Presented at the Conference on Economic integration and Transboundary Resources Organized by the Ethiopian International Institute for Peace and Development (EIIPD) The Challenges And Prospects Of Pan-African Economic Integration The Restructuring Of Pre-Colonial Integration Institutions The Record Of The African Integration Experience Political liberation in Africa was the harbinger of the embryo of economic integration and union which found eloquent articulation in the late 1950s with the emergence of Ghana as first black independent state in Sub-Saharan Africa in 1957. The atmosphere for the radical parlance of political and economic freedom was set to continue at least for the next decade. Three key Pan-African conferences held at the turn of the 1950s were particularly unequivocal in their advocacy of freeing Africa in an all-round sense. The first two held in April 1957 and June 1960 strongly urged the newly independent African states to accept economic cooperation as the basis of economic transformation. At the third con-ference of May 1963 held in the Ethiopian capital, Addis Ababa, they inaugurated the Organization of African Unity (OAU) incorporating economic cooperation as one of the principal objectives of the organiz-ation. The same principle was endorsed at the Summits of 1970, 1973, 1977 and 1979 in which detailed guidelines were formulated paving the way for the ultimate goal of forming an African Economic Community in five successive stages. One of the most serious hurdles to the goals of sub-regional and eventual continental economic integration is the multiplicity of duplicating and multipurposeness of the economic units formed in the post-colonial period. There are an estimated hundred organizations and they defy easy classification and grouping not to speak of harmonization. They run the whole gamut from continental organizations such as the OAU and the ECA to regional and ultra sub-regional entities. Nevertheless, in this paper, which aims to address the issue of economic integration in Africa in a broad sense, we will restrict our discussion to the larger sub-regional integration efforts and the success and the failure there-of. The paper will also dwell on the authentic African integration efforts which belong to the post-colonial period, and also on organizations which existed in pre-colonial Africa. But these organizations were created by the colonizing powers for their own goals. Restructuring these set-ups in some cases in a fundamental way was thus necessary to ensure their relevance to post-independence economic, social and political reality. The paper will also address the problems and prospects of African integration at the sub-regional and regional levels. THE CHALLENGES AND PROSPECTS OF PAN-AFRICAN ECONOMIC INTEGRATION "If we are to remain free, if we are to enjoy the full benefits of Africa's rich resources, we must unite to plan for our total defense and the full exploitation of our material and human means in the full interest of our people. To go it alone will limit our horizon, curtail our expectations and threaten our liberty." Kwame Nkrumanh Political liberation in Africa was the harbinger of the embryo of economic integration and union which found eloquent articulation in the late 1950s with the emergence of Ghana as first black independent state in sub-Saharan Africa in 1957. The atmosphere for the radical parlance of political and economic freedom was set to continue at least for the next decade. Three key Pan-African conferences held at the turn of 1950s were particularly unequivocal in their advocacy of freeing Africa in an all-round sense. The first two held in April 1957 and June 1960 strongly urged the newly independent African states to accept economic cooperation as the basis of economic transformation. At the third conference of May 1963 held in the Ethiopian capital, Addis Ababa, they inaugurated the Organization of African Unity (OAU) incorporating economic cooperation as one of the principal objectives of the organization. The same principle was endorsed at the Summits of 1970, 1973, 1977 and 1979 in which detailed guidelines were formulated paving the way for the ultimate goal of forming an African Economic Community in five successive stages.
This experiment was to begin at the sub-regional levels in West Africa, Eastern and Southern Africa, Central Africa and North Africa. The outcome of these efforts culminated in the Lagos Plan of Action of April 1980 which incorporated all the implementation guidelines of the 1970s. This enjoined all African countries to establish sub-regional economic blocs with the ultimate aim of establishing an African Economic Union by the year 2000. But this ambitious plan had to be postponed due to a number of unforeseen delays in the implementation process. One of the most serious hurdles to the goals of sub-regional and eventual continental economic integration is the multiplicity of duplicating and multipurpose nature of the economic units formed in the post-colonial period which are estimated at around a hundred organizations and they defy easy classification and grouping not to speak of harmonization. These run the whole gamut from continental organizations such as the OAU and the ECA to regional and ultra sub-regional entities. Nevertheless, in this paper which aims to address the issue of economic integration in Africa in a broad sense, we will restrict our discussion to the larger sub-regional integration efforts and the success and the failure there-of. While authentic African integration efforts belong to the post-colonial period, nevertheless, this is not to say that similar organizations did not exist in pre-colonial Africa. Rather, it is to underscore that these economic organizations during the colonial period were created by the colonizing powers for their own goals. Restructuring these set-ups, in some cases, in a fundamental way was thus necessary to ensure their relevance to the post-independence economic, social and political reality. The rest of this paper will examine the excruciating demands of adjustment which these institutions faced as they struggled to attain profiles of maturity as institutions of integration. It will also look at the record of success and failure and the political, economic, technical and administrative hurdles which gave rise to it and suggest some remedies on the way forward THE RESTRUCTURING OF PRE-COLONIAL INTEGRATION INSTITUTIONS Restructuring was also necessary to formalize economic and administrative relations that had been operational in a rather informal and autocratic fashion under colonial rule. Examples of the efforts that were made by the independent African countries to promote meaningful economic cooperation, included those restructured after independence such as:
In conjunction with this, mention should be made of the early efforts made through the creation of the Ghana-Upper Volta Customs Union in 1961, and the West African Free Trade Area involving Guinea, the Ivory Coast, Liberia and Sierra Leone in 1964. All of them had played an avant guard role with varying degrees of success. The need for economic cooperation among African countries was also reinforced by the size of the countries themselves resulted from the process of balkanization by the colonial powers as well as by the new realities which attended independence. THE RECORD OF THE AFRICAN INTEGRATION EXPERIENCE It is worthy of note that the face of events has changed radically since the late 1980s. For instance, with the overthrow of Idi Amin and the series of abortive governments which followed and the eventual ascent of President Yoweri Museveni, Uganda has emerged as reform-friendly and market-oriented country as opposed to Kenya which is seen as a very reluctant reformer. Similarly, barring some corruption scandals, Tanzania too is lauded for its adoption of the new market doctrine and the pluralisation of its political process. Albeit, even in the welter of conflicts which has prevailed for many years the role of foreign intervention by way of favouring one country as against the other has continued to plague Africa. This was evident not only in the economic sphere but also the political one. For instance, it was evident in the pattern and sources of arms supply to these countries especially when their conflicts grew to open hostility and the declaration of war as was the case of the war between Uganda and Tanzania which led to the removal of Idi Amin and restoration of former Ugandan leader Milton Obote to power. A more recent example is the smoldering conflict between Uganda and Kenya. Albeit, according to figures for 1986, until recently the traditional suppliers of arms remained unchanged. The US and Great Britain are Kenya's major suppliers of armaments while the USSR continues as the supplier of arms to Uganda and Tanzania. However with the emergence of the Sudan as a new area of conflict, Uganda has been receiving more and more arms from the West, particularly the US. The underpinnings of this on the prospects of a viable sub-regional integration are all too obvious to go into in greater detail. The new silver lining which emerged after the turmoil of the 1970s and 1980s is the revival of the East African Economic Cooperation in the early 1990s which was overshadowed by the escalation of civil strife of genocidal proportions in the Great Lakes Region. Luckily, in 1997 events took a turn for the better with the overthrow of Mobutu, Zaire's arrant dictator, and his replacement by Laurent Kabila, Congo's new liberator. Further the stabilization of the political climate in Rwanda and Burundi seems to augur for peace and integration. Yet, the political face of East Africa is set to change even further as Kenya faces up to the toughest opposition challenge for reform in its recent troubled history. Although it was never formally attached to the East African Economic Community another country which the US has tried to bring into the fold of an enlarged economic bloc is Ethiopia which has emerged as a champion of the new reform doctrine. Having departed from nearly two decades of authoritarian rule and a command economic structure, Ethiopia has fully liberalized its economy and pluralised its political process. Ethiopia and Uganda both of which belong to the Inter-Government Authority on Development (IGAD) formed in 1986 (which also embraces Kenya, Eritrea, Djibouti, Sudan and Somalia) enjoy the full backing of the EU and the US which have extended enhanced external assistance to boost their reform process in the 1990s. As a sub-regional organization which has been revived and revitalized, IGAD too has become a beneficiary of growing EU and US assistance. In West Africa as in East Africa ideology has also had a dysfunctional role to play. With an even larger number of nations involved in it the Economic Community of West African States (ECOWAS) has also had to cope with more countries with divergent national interests and ideological hues. These range from the strongly pro-American Liberia and Capitalist Ivory Coast on the one hand, to countries committed to some form of socialist development such as Guinea and the Guinea Bissau. Another hurdle to economic cooperation was the difference in the size of the member countries and the dominance of some members stemming from it. Take, for instance, Nigeria with its population of about a hundred million people and compare it with Benin, Sierraleone or Liberia which have a population of less than two million each. This makes it an elephant among ants. The worst symptoms of such union of unequals are bound to surface especially in the wake of crisis or disasters of all sorts. This problem of size which is a legacy of colonial policy of balkanization has strong implications particularly in West Africa where most countries are small. Thus, for instance, a strong apprehension was expressed by Senegal about Nigerian domination through its attempt to co-opt non-West African states like Angola and Zaire. However, predictably enough, the Nigerian reaction was vehement. They argued strongly in the name of keeping the West African organization as a purely regional one in lines with the guidelines laid down by the ECA. Economic integration along lines of linguistic affiliation was also attempted by African states. For instance, the Francophone African States were affiliated to the EEC under the Yaonde convention whose expiration in 1972 coincided with the enlargement of the EEC in the same year by the admission of Britain into the Community. This raised the question of the fate of Commonwealth countries which had operated under special arrangements that included the Commonwealth Sugar Agreement and the Common Wealth preferential agreement. Subsequently, negotiations on these matters began in October 1973 and continued until February 28, 1975 when the Lome Convention was signed. The oil crisis and growing consciousness of the merits of collective bargaining among the producers of raw materials however made negotiations difficult. In May 1973, OAU formulated eight principles to guide these negotiations. The OAU Secretariat ran into the opposition of the EEC as well as the Francophone African states. However, subsequently, the OAU principles became accepted as the basis for the negotiations and for collective bargaining among African states. Later, when the Commonwealth Caribbean and Pacific states joined in the talks on the side of the Africans the bargaining power of the ACP (African Caribbean and Pacific) states was immensely enhanced. Thus while the Yaounde Convention included 18 mostly Francophone African countries, the Lome Convention was signed by the following 46 ACP countries:
The EEC members at the time were: Belgium, Denmark, France, Germany (Federal Republic), Ireland, Italy, Luxembourg, Netherlands, and the United Kingdom. One of the goals of the Lome treaty is that implicit in the new system for compensating fluctuations in the earnings of export commodities from the ACP members. Such fluctuations may be caused either by bad harvest or slump in world market prices. This covers 12 commodities: Cocoa, palm oil, groundnuts, tea, cotton coffee, wood, bananas, hides and skins, coconuts, sisal and iron ore. Compensation is based on provisions of STABEX system i.e. those ACP countries whose export earning depend up to 7.5 percent or more (in the case of the poorer signatories the figure is 2.5 per cent) on any one of these 12 commodities are entitled to compensation for falls in earnings below a certain agreed level. As in the Yaounde Convention before it, the Lome agreement also includes non-reciprocity clauses by which the ACP states may withhold trading preferences from the EEC while the EEC members bind themselves to provide such advantages to the ACP countries. The new convention also created considerable scope for industrial cooperation between the two parties with pledges of the EEC states to transfer technological know-how programmes for industrial training, promotion of ACP products in the EEC markets and provision of access to the EDF. However, this again proved in-effective as the EEC countries had control over the economic set-up, financial and commodity markets and the export of industrial and capital goods. The UNCTAD conference of Nairobi for instance proved that the Lome Convention was not a real guarantee that the EEC countries would be amenable to demands by the developing countries as West Germany and Great Britain blocked the attempts to set up a Common Fund for the stabilization of commodity prices. Controversy had raged over the practical application of the STABEX scheme until the time when negotiations on the establishment of the World Trade Organization took the upperhand. The future of Lome including its future structure which is now inextricably linked with that of WTO is now being debated. And according to most experts Africa would be a net loser along with the other ACP countries due to the removal of compensatory mechanisms such as STABEX for which there is no room within WTO arrangement. The deadline for reaching an acceptable agreement on the future of Lome is the year 2000 and the prospect of retaining Africa's benefits depends on its ability to present a united front on maintaining the present structure of Lome with its benefits. This failing, most Africanists argue, Africa should be able to fight for an alternative scheme which maintains some of the compensatory schemes or provision. This is certain to enhance the gradual grouping toward integration on a continental scale. |
