Last year, there were a lot of discussions on how Africa could leverage on its regional economic communities for more integration on the continent. Continental Free Trade Zone, was also one of the major discussions in the recently concluded African Union summit; one to be led by the new African Union chairperson Rwandan president Paul Kagame. In a recent report by Brookings Institute, the importance of leveraging on Africa’s regional communities when talking about a Continental Free Trade Zone was laid bare.
The report, titled “ Foresight Africa: Top priorities for the continent in 2018” featured contributions from many influential figures on the continent including Rwanda president Paul Kagame, Ivorian president Alassane Ouattara, former Nigerian finance minister Ngozi Okonjo-Iweala, African Development Bank chairman Akinwunmi Adesina e.t.c, who all gave their thoughts on what they think will happen on the continent in 2018.
Unleashing Africa’s Inner Strength
The first chapter was about ‘Unleashing Africa’s Inner Strength,’ and the Rwandan president who is also leading the push for a Continental Free Trade Zone wrote on building a stronger African Union. The president referenced a survey conducted by Afro Barometer in 2015, which did an extensive study into the relative strength of regional bodies on the continent.
Criteria such as trade integration, regional infrastructure, productive integration, free movement of people, and financial and macroeconomic integration were used to rank each regional bodies. The African Union recognizes eight Regional Economic Communities (REC); Community of Sahel-Saharan States (CEN-SAD), Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), Intergovernmental Authority on Development (IGAD), Southern African Development Community (SADC), and Arab Maghreb Union (UMA). Many countries are members of more than one REC.
Africa’s Regional Economic Communities
The East African Community (EAC) scored highest on trade integration, the Inter-Governmental Authority on Development (IGAD) scored highest on regional infrastructure, the East African Community on Productive integration, Economic Community of West African States (ECOWAS) on the free movement of people, and also financial and macroeconomic integration.
The survey also recorded the responses of Africans when they were asked if they thought their regional communities were better than the African Union. Respondents from 36 African countries were interviewed, and there was a slightly higher regard for regional bodies than the African Union, with the East African nations being highest in this accord, followed by West African nations. However, Central African nations in the survey had the most trust in the African Union, followed by Southern African countries. Many of the countries with a high regard for regional bodies have been influenced by the intervention of these bodies in key moments in history e.g. Liberia perceived ECOWAS to be more important because of its intervention during the Ebola crisis and its civil wars.
African Union Focus for 2018
30 recommendations were made at the last African summit, grouped into five areas; “(1) focus on key priorities with continental scope, and improve the division of labor with Regional Economic Communities; (2) re-align African Union institutions to deliver on those priorities; (3) connect the work of the African Union more directly to citizens; (4) manage the business of the African Union more efficiently at both the political and operational levels; and (5) sustainably self-finance its activities.”
Evidently, the first priority of the new chairperson, Kagame, is the regional African communities, which he believes will help with African integration. While there’s already free movement within some regions, e.g. ECOWAS, it is obvious that some regions need better integration before becoming part of a Continent-wide Free Trade Zone. Many in the survey expressed extreme difficulties in crossing borders from a region to the borders of a country in another region on the continent. Yet, this is key to the creation of a Continental Free Trade Zone; the easy movement of people, and goods and services.
Lack of free movement is also a key problem of Intra-African importation and exportation. Afreximbank Vice-president Amr Kamel remarked last year in Egypt on the limitations of intra-trade in Africa.
“Contrary to the popular view that lack of infrastructure was the biggest challenge to intra-African trade, such trade was actually being held back mainly because people in one African country lacked information about trade opportunities in other African countries,” he said. He also added that some African countries were importing goods from outside the continent at a higher cost when the products are available at lower costs in other African countries.
Paul Kagame is setting the African continent on a new path as African Union chairperson, a path he is perhaps familiar with. The economic growth of Rwanda under him has been widely applauded. Africa’s GDP was forecasted to grow by 0.7 percent in 2018 but now has been forecasted to grow by 0.5 percent this year. Perhaps, instituting these trade reforms could further promote integration and a faster GDP growth for the continent.