Contents

Past Pitfalls Of Integration  

The Way Forward For African Integration

PAST PITFALLS OF INTEGRATION

The Paramount hurdles to African integration have been the lack of full commitment or disparities in the level of commitment often manifested in the failure to incorporate agreement reached by different integration scheme in national plans. This tendency has played down the value of collective agreements or protocols arrived at to expedite trade and harmonize policies at sub-regional levels. Yet, the importance of the seriousness with which such agreed protocols should be followed up need not be overemphasized as Bax Nomvete has underlined in an article entitled “Regional Integration in Africa: A path strewn with obstacles” published in the magazine The Eye on Ethiopia and The Horn of Africa Vol. 6, No. 39, April-May, 1997. 

Nomvete views that the failure to integrate the cooperation programmes into the national administrations is that follow-up of decisions taken at the sub-regional meetings is left to the heads of State, or to a few ministers and civil servants in the ministries dealing with cooperation matters or in the office of the president. The rest of the government and the population of the country are not involved. In fact, they may not even know that there is a treaty establishing the cooperation arrangement. The treaties or articles of association are the private property of a few politicians and civil servants. Nobody else reads or knows them. 

A second problem is that awareness on the issue of economic integration has not been promoted at the grassroots level or that the private sector which is the engine of economic growth has not been actively involved in the effort to advance integration by the various African states. Bax Nomvete has dwelt on this issue at length.  

A third inhibiting factor to cooperation according to Nomvete is the dearth of local private entrepreneurs and technical and management skills. As a result, the operational management of     the economy, including project formulation, project implementation and investment decisions, is left to the public sector (parastatals), which normally would not be as quickly responsive to opportunities for cross-border investments and joint ventures with businessmen from neighbouring countries and/or from developed countries, and are guided not by profitability of projects in economic and financial terms but by political exigencies. It is the lack of home-grown private entrepreneurs and skills which accounts for the excessive dependence of African economies on imported products.  

The economic dependency status of many African countries is another factor that works against the viability and strength of sub-regional economic cooperation groupings in Africa. Many African countries still depend excessively on supplies of manufactured products originating from developed countries, even when comparable products are available within a sub-regional preferential arrangement. This kills the rationale for creating bigger markets to facilitate the growth of viable production enterprises. The preference for imports from industrialized countries is attributable not only to habit but also to the trading advantages enjoyed by the suppliers from the developed countries.                                  

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Another factor is linked with the elitism which characterizes the implementation process of integration which lack grassroots support at the national level. This is due to the manner in which the cooperation arrangement were launched. In many countries the idea of forming or joining an economic cooperation arrangement has not derived from the wishes of the people or in response to the felt needs of the leadership but rather from ideas instigated by a donor country or countries. 

Whatever the reasons may be, African leaders have also failed to explain fully to the people the reasons for their participating in integration arrangements and the advantages which accrue to the majority. To the extent that cooperation arrangements are (or were) forged without the full participation and knowledge of the population, their stability and success of implementation of programmes have been difficult to be guaranteed. 

A particular weakness of economic arrangements is that they tend to be based more on linguistic and cultural criteria. In such groupings, divisive elements are strong and their existence frustrates the development of cohesive and viable sub-regional grouping. For example, in West Africa, Ghana, Liberia and Sierra-Leone (English-speaking countries) are geographically surrounded by CEAO countries all of which are French speaking. Gambia is culturally and economically part of Senegal but not a member of French speaking bloc of the Senegal River Basin because it is English-speaking as opposed to Senegal which is French-speaking. 

Another problem is the reluctance and inability of the members of economic blocs to create the facilities and the mechanisms necessary to expedite the movement of goods and services. A case in point is the clearing mechanism on which agreements were signed but not followed up. Yet, the crucial role of this function cannot be minimized as underlined in the following excerpt: 

The clearing and payments mechanism was established in some cooperation arrangements to promote the use of local currencies in intra-sub-regional trade to ease the foreign exchange constraint. A critical problem is that of the accumulation of payments arrears. In the West African    and Central African clearing houses, for example debtor monetary authorities have on many occasions failed to settle their obligations in the clearing house at the end of    the transaction period, and   have accumulated payments obligations which remain unsettled. A related problem is the question of acceptable transactions for settlement through the clearing house mechanism. Member states sometimes restrict commodities that could be paid for within the system. For example, oil, which is a major source of foreign exchange, is excluded by oil producers from reciprocal transactions even though agreements stipulate that all transactions should go through the system.  

One consequence of the above is that it destroys confidence in the clearinghouses. In some cases clearinghouses have either collapsed or continue with difficulty. The process towards the establishment of sub-regional monetary unions intended to facilitate the removal of such macro-economic disharmonies and provide a stable environment for economic integration to take place unimpeded has also been rather slow. 

Another roadblock to speedy integration is the negative role of multinationals which in part is intrinsic to their nature.  This negative impact is indeed by no means unique to Africa as multinationals plague integration movements in other regions, including the developed world. However, it should be recognized that in view of the weakness of African economies the negative impact and stresses and strains which it produces among the participating countries in Africa not only slow down integration processes but also cause suspension which lead to break-ups. 

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Yet another problem which is of Africa's own making is the duplication of economic blocs essentially created to achieve the same objectives. Take for instance COMESA and SADC and IGAD and the East African Community in which many countries maintain dual membership. There could be reasons for this phenomenon and its negative effects. Bax Nomvete elaborates on this stating, "a possible explanation might lie in the colonial heritage of African countries and their economic dependency status.  During the period immediately before or after independence, the formation of many intra-sub-regional groupings was based on linguistic ties and historical links or on personal relationships between the African elite, or between African leaders and leaders in metropolitan or donor countries." He adds, "the multiplicity problem within the sub-regional arrangements weakens the integration process. It leads to costly competition, conflict, inconsistencies, duplication of efforts, fragmentation of markets and restriction in the growth potential of the sub-regional arrangement."  Yet attempts have been made to redress this as Nomvete goes on to remark, “various attempts to rationalize the organizations in such sub-regions as ECOWAS, where there are some 34 organizations, have failed. While recognizing that the diversity of economic and social needs of African countries and the complexity of international economic relations may require or justify the existence of many organizations in one sub-region, it is patent that better results would be obtained through a limited number of larger multipurpose institutions which would contribute to the establishment of a basic equilibrium among all states within the same sub-region, and provide economies of scale for quicker economic transformation.”

Procedures governing the movement of goods are besides lengthy and cumbersome and often lead to delays and unnecessary bureaucratic work. To this may be added the exorbitant fees transporters are required to pay in order to cross borders. Further road tolls are required to be paid at customer checkpoints and very often customs officials insist on physical checks of goods in transit despite the existence of valid documents. This causes delays at final destinations. Another problem is that designated transit corridors do not work satisfactorily because customs administrations totally ignore the transit facilities which are supposed to be accorded to transports. Yet another problem is that breakdowns along the transit routes take a long time to maintain. All these add to the final cost of African products and render them uncompetitive. 

Other roadblocks include restrictive import licensing, quotas and prohibitions. Restrictive import licensing is the most prevalent and in some countries the system of restrictive import licensing is institutionalized. 

Another problem is customs duty. One reason for it is the geography of many sub-regional economic groupings, which demands that imports into some countries have to traverse the territories of other countries. To facilitate this process agreements have to be reached among the countries on the value of transfers of imported goods and on the payment of customs revenue. 

Often the above generally leads to conflict and controversy, in which inland countries which complain that they do not receive a fair share of the revenue. This was controversial among the countries of the East African Community, UDEAC and the Entente in West Africa. 

Another difficulty is caused by the dis-equalizing effect of integration. This is due to many factors that arise from some problem areas. In particular they stem from the tendency of the market to work in a favourable or unfavourable manner in a cooperation arrangement. Yet all countries that join a cooperation arrangement expect to benefit from the integration process in an equitable manner. 

Anther problem is that the elimination of trade barriers and adoption of common investment policies do not necessarily lead to equitable distribution. Instead they support or stimulate the tendency of investment to concentrate on the relatively more advanced countries. In fact, the cumulative causation resulting from this tends to increase divergences between the relatively more advanced and less advanced economies. 

Mechanisms aimed at the equitable distribution of benefits thus become necessary. Albeit, in the African context, no mechanism has resolved the issue. A tendency for the polarization of development in some cooperation blocs thus persists.

Other issues relate to the following factors.                                   

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1. Nearly two thirds of capital and commodity aid and technical assistance are tied.

2. Most of the suppliers are not in a position to offer advantageous credit and delivery terms to African countries in a cooperation arrangement

3. There is too much risk consciousness in dealing with domestic African suppliers.

4. Distorted trade patterns which favour overseas suppliers at the recipient African countries i.e. repeated order from donor countries regardless of the suitability of the products for local conditions. This is because of the excessive dependency problem that the great bulk of manufactured goods imported into Africa originates in the developed countries, even where some of these can be produced locally. Yet such goods would have high added values if produced within an African sub-region. They would also be a powerful engine for economic growth. Indeed, there are many instances where a commodity is exported raw or in semi-processed state to be imported back as part of a manufactured product. But they could have been manufactured in the African region in the first place. 

5. African countries produce the same things and therefore compete with one another. Hence, no meaningful trade can take place among countries in one bloc.

6. Further there is no adequate transport infrastructure for intra-African trade. Even when tariffs have been reduced and intra-country transport links are open, the costs of transport between countries forming a cooperation bloc tends to be high.

In most of the developing regions   of Africa the principal transport arteries, both national and regional, are already in place and comprise a network of roads, rail, shipping and air transport links. This network forms the backbone of the national as well as regional exchange of goods and passengers. 

However, the individual systems may not always be fully compatible, especially in terms of transfer of goods, and in some cases parts of the network need urgent rehabilitation and upgrading owing to inadequate maintenance. 

A well-maintained and integrated transportation system would be a positive factor not only in enhancing the success of sub-regional economic cooperation, but also in generating user savings, more competitive exports and cheaper imports. 

7. There are problems of operational and institutional nature which make intra-African cooperation difficult. These relate to information, banking, language, costs of promotion, prices of research, etc.

8. To the above may be added the issue of trade diversion and trade creation. Some countries put accent on calculation of costs and benefits on short-term basis. Yet, the effects of changes in relative prices brought about by eliminating trade barriers among the participating countries is realized in the long-term as cooperation arrangement does not accrue benefits immediately to developing African economies. Therefore determining the advantages of economic cooperation for Africa should be based on the dynamic effects of larger integrated multinational markets with salubrious effect on production, investment, trade and economic growth which become apparent over time.

9.  Another roadblock to integration is the economic weakness and relative stagnancy of African economies and its negative impact on government policies.

10. The significance of this is amplified by the fact that Sub-Saharan Africa entered the 1990s poorer than it was in the 1970s and 1980s. African countries are faced with mounting economic problems, minimal or zero growth rates, low domestic savings and investment, scarcity of foreign exchange, balance-of-payments difficulties and a heavy debt burden. And economic stagnation is not a favourable time for formulating long-term plans which promote intra-sub-regional/ regional trade, liberalizing national markets and embarking on medium-term and long-term plans which establish multinational project, sectoral linkages and to develop programs of sub-regional harmonization in the macroeconomics field.

11. The pressure of governments to give priority to domestic crisis management and take protective measures against other countries, including the regulation of the domestic economy in sensitive sectors and the imposition of restrictions on imports and on the use of foreign exchange.

    A survey of experiences, not only in Africa but in such other Third World regions as Latin America, indicates that a growing and active economy creates a more conducive environment for the promotion of economic cooperation and integration

12. Another problem relates to the running and management of the secretariats of the economic blocs. Some of the problems are of administrative nature but are linked to policies pursued by governments. Such roadblocks, inter alia, include:-

1. The limitations put by member states on chief executives' independence to recruit staff and manage   secretariats,   and   the tendency of some countries to   force   candidates    on   the secretariat and to listen to complaints from staff members who are their nationals about the management of the secretariats. One result of this is that some officers of the secretariat become more loyal to ministers in their home countries or to their ambassadors in the host country of the secretariat than to the institution through its chief executive. 

2. Lack of flexibility in programme implementation and clarity on the definition of tasks, inability to reconcile national and multinational interests in the implementation of programmes; and 

3. Short-termism due to failure on the part of the secretariats to articulate the long-term advantages and disadvantages of economic cooperation 

THE WAY FORWARD FOR AFRICAN INTEGRATION

Two types of economic integration which have been tried with varying degrees of success can be applied in the African context. One is monetary union which involves coordination of macro-economic policies by regional economic blocs. This can ensure fiscal consistency in external payments and harmonize the exchange rate policies of the member states. The only impediment to it is one of sovereignty as is being raised by the U.K. However, it is valuable because it stimulates the free movement of people and that of capital goods and services. 

The other paramount approach to integration is one of creating common market. This stimulates economic cooperation among states that want to maintain their sovereignty. The focus here is on the removal of tariff walls. Often common markets are expected to lead to a monetary union and this is also the key roadblock to its acceptance. 

In the African context a major source of difficulty to integration has been the size of both in terms or population and economies of scale and size of markets. One way of mitigating the effect of this problem is economic growth coupled with the diversification of exports which can improve the ability of small economies to lobby for the improvement  of  price  regimes   for primary products and for attracting foreign direct investment. 

Another strategy should be promoting and expanding trade, movement of capital, peoples, goods and services. This is bound to assist the member states to mutually benefit. More so if they can pool their resources to do so. 

Collective efforts should also be made to improve the precondition for enhanced integration through joint efforts aimed to improve roads, telecommunication and large industries which are unaffordable for the small states. Coupled with this, measures should be taken to remove tariff walls and encourage division of labour, stimulate specialization in production and spur economies of scale. 

Equally crucial is improving the economic and political environment for technological innovation and development by providing incentives. Other measures include encouraging people to produce enough food through appropriate policy measures. 

Just as important is conflict resolution and the improvement of relations among people by capitalizing on cultural, educational and scientific cooperation. This in turn will reduce tension and assist efforts on confidence building measures. It will also absorb political tensions and improve the environment of dialogue and dispute settlement. 

It is also important to create awareness on the value of supra-national political organizations as a way of removing the fear of loss of sovereignty over macro-economic policies to a Monetary Union or a Common Market.                                                                                        

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One effect of this is that expectations of unequal distribution of benefits and losses will subside. However, this should also pay special attention to the comparative advantage of the weaker states via specialization. 

An important measure is for continental organizations to provide active support and stimulation to small sub-regional economic blocs. They should show the complementary nature of the small blocs so that they support one another. Further they play the role of harmonization and strategic linkage among small blocs so that they can coordinate their action when their common interests are at stake. The effort being made by the OAU in the context of the discussions on the future of LOME (EU-ACP) is one exemplary illustration of how big organizations like the OAU should conduct themselves. 

The small economic blocs in turn should create mechanisms of preventing conflicts and promoting a culture of tolerance. One reason for this is that integration is best developed in a climate of trust and confidence among nations and their populations. One way of stimulating this ambiance of harmony is capitalizing on commonalties and promoting equality in diversity. Enlightened leadership is bound to lead the way in such efforts. 

Another way of encouraging integration is learning from the experience of other regions which have achieved a measure of success. Europe has for instance risen from the ashes of a very destructive world war and achieved a common market and is now striving toward achieving monetary union at the end of this millennium. There are other less advanced success stories in North America and Asia to emulate. 

One should also be fully cognizant and fully appreciative of inter- and intra-state economic collaboration as a way of mitigating political conflicts and reducing external interference because of the solid front which small nations present under a common cause and banner. Further it is important to:

1. Promote joint and integrating planning

2. Map out policies on shared transboundary resources like international rivers, lakes, grazing areas, etc.

3. Develop common strategies of combating drought, natural and man-made mishaps

4. Jointly develop a common ap-proach to combat environmental degradation and promote sustain-able environmental development programs in the sub-region.

5. Strengthen bilateral links which in turn provide a basis for multi-lateral cooperation

6.  Make short-term compromises in the interest of long-term goals and benefits

7. Make provision for common security arrangement as a way of warding off external aggression and domestic strife

8. Ensure that the initial contributions to benefits of economic blocs are equitably distributed to guarantee the continued interest of member states in the bloc

9. Harmonize relations among economic blocs by introducing division of activities and niches of specialization

10.  To minimize duplication of activities and undesirable competition

11. Develop conflict prevention mechanisms through a sub-regional agenda of education and edification and mediate actively in conflict situations

12. Introduce sub-regional food security strategy

13. Create a compensatory mecha-nism to ward off fluctuations caused by price instability

14. Stimulate the free movement of people and goods and services as appropriate.

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Publications Received by EIIPD

1.            Alemseged Tesfai & Martin (Editors), Post-Conflict Eritrea: Prospects for Reconstruction and Development, The Red Sea Press, Inc., 1999.

2.            CICIR, Contemporary International Relations, Vol. 9, No 6, Beijing, June 1999. 

3.            Cynthia Kros, Putting the History Books Straight: Reflections from Argentina, S. Africa, June 1999.  

4.            Deborah Posel, The TRC Report: What Kind of History?  What Kind of Truth?, S. Africa, June 1999. 

5.            Foreign Service Institute, Indian Foreign Policy, Konark Publishers Pvt. Ltd., New Delhi, 1997. 

6.            Gael Neke, Reforming the Past: South African Art Bound to Apartheid,   S. Africa, June 1999. 

7.            IGAD/UNDP, Horn of Africa Programme, Vol. 1, Addis Ababa, June 1999. 

8.            Janet Cherrry, No Easy Road to Truth: The TRC in the Eastern Cape,      S. Africa, June 1999. 

9.            Jeremy Cronin, A Luta Dis-contunua? The TRC Final Report and the Nation Building Project, S. Africa, June 1999. 

10.       John S. Saul, The Dog that didn’t Bark in the Night: Namibia’s Missing TRC and the South African Model, S. Africa. June 1999. 

11.       Lars Buur, Mounmental History: Visibility and Invisibility in the Work of the South African TRC,  S. Africa, June 1999. 

12.       Leigh A. Payne, Confessions of Torturers. Reflection from Argentina,       S. Africa, June 1999. 

13.       Richard Wilson, Reconciliation and Revenge in Post-Apartheid South Africa: Rethinking legal Pluralism and Human Rights, S. Africa, June 1999. 

14.       Saul Tobias, History, Memory and the Ethics of Writing: Antjie Krog’s Country of my Skull, S. Africa, June 1999. 

15.       Stephanie Schell-Faucon, History and Current Developments of Holocaust Memorials in Germany. S. Africa, June 1999 

W.I.C., One Year of Ethio-Eritrean conflict. (Chronology of Events and Basic Documents), Addis Ababa, June 1999.