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Economic integration is the buzz-phrase of the
rapidly globalising world; though like most catchy
gimmicks it may be ill-conceived if its benefits are
assumed rather than rationally analysed.
Such is the case for Africa as displayed at the
United Nations Economic Commission for Africa (UNECA)
last week. The three-day session featuring trade
ministers from over 50 countries for the fifth
bi-annual meeting of the Committee on Trade,
Regional Cooperation and Integration was rather
bland and disappointing for economic pan-Africanists.
Delegates appeared to be going through the motions
in reporting the all-too-common dismal news for
African economies. Though the data on bringing
African markets closer showed underperformance
compared to goals set beginning with the Abuja
Treaty, these statistics are actually not the worst
of it for the continent's nearly one billion
inhabitants, nor is it what the mostly
underdeveloped and diverse nations should focus on.
The aspiration of establishing common markets,
harmonising macroeconomic policies and integrating
Africa's infrastructure look good on paper but do
not hold the key to success. Dragging these nations
out of the abject poverty characterising so many,
let alone meeting the Millennium Development Goals (MDGs)
and halving poverty, will not result primarily from
economic unity.
There are more pressing problems for the continent's
policymakers to deal with that may help integration,
but focusing on this will not solve the woes.
Institutional capacity, good governance and gradual
economic liberalisation, not to mention better terms
of trades are the prerequisites that would incite
economic unions to be productive. The benefits to
bringing Africa closer together seem to have been
assumed rather than concluded from thought-out
deliberation.
The textbook rationale for enhancing trade is to
exploit comparative advantages. Most African
economies are stuck in the rut of primary product
exports, however, and thus little benefit is to be
promised in theory. Moreover, the further
integration involved in policy harmonisation depends
on a level of institutional capacity that seems to
be dismally lacking in most domestic governing
bodies.
Nonetheless, the Conference gave extensive reports
on the failings of African countries to further
integrate their economies. This did not come as a
surprise given the level of policy changes necessary
to achieve such structural changes, especially
considering the low institutional capacity of most
governments involved. This limited area of
disappointment, however, does not seem to be the
most worrisome aspect of African economic progress,
though the focus of the presentations did not shift
towards a questioning of why integration should be
considered the panacea.
After showing rudimentary progress on the lofty
continent-wide integration aims, the primary efforts
for most governments have been regional cooperation.
While some view this approach as a stepping stone
towards later efforts, the problems of the
respective organisations in these more modest goals
demonstrates how distant further progress is and why
resources and efforts may be wasted on this path.
The share of regional trade reported is too slim to
be a catalyst for more agreements.
Reports on the developments in the Common Market of
East and Southern Africa (COMESA), Ethiopia's chosen
allegiance, show some progress in evolving from a
preferential trade zone towards a free trade zone,
but success is far from being realised. The main
troubling characteristic of this grouping, but
potentially applying to most on the continent in
terms of benchmark creation and judging, is that
"timetables" and not "economic evidence" has been
the driving force for progress.
The highly politicised efforts seem to be more
geared towards rhetoric and ill-conceived strategies
than sound economic study.
Using the European Union (EU) as the poster child
example of success, much of the African economic
literature shows the giant strides needed to emulate
the northern neighbour. The road would be seemingly
endless to bring the intra-continental trade
currently hovering around 10pc of the total to the
European levels of about 70pc. As far as trade in
general goes, the primary progress has been achieved
by oil-producers benefiting from the surging demand
of the rising Asian economies, but this type of
single commodity growth is volatile.
The African countries should not be timid in
breaking away from adherence to the integrationist
rhetoric and pursue more rationalised policies. No
doubt, the emphasis on wealth retention can
sometimes be a blinder for wealth creation.
This is not to say that there are not many benefits
to be had from harmonising and integrating policies.
However, these must be carefully selected on the
basis of in-depth studies and not assumed to be good
on their own philosophical merits.
Securing a more favourable position in the rapidly
changing world will remain a challenge for Africa
and the kicker for the foreseeable future will be
the agricultural subsidies the West stubbornly
maintains. This is where true African unity, looking
past the internal political squabbles, will yield
the most fruit. Presenting a strong and common voice
in the trade negotiations failing to reach
agreements disappointingly frequently, is the one
sure bet for benefits to trickle down. |
