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Regional Integration II

Regional Integration II Feature Article

Regional Integration: Building on Africa’s strengths

This article explores the history of regional integration in Africa and the linkages to informal trade networks, oral traditions and Ubuntu. It suggests the utilization of these aspects of African culture to achieve regional integration from a different perspective, involving both a bottom up and top-down approach, in the process providing a means to address the challenges faced in achieving regional integration. It is envisaged that foresight for development work into regional integration could therefore benefit from including investigations into informal trade networks, oral traditions and Ubuntu.

 

Regional integration in Africa has been marked by its strong political motive, despite the strong economic arguments for such integration due to the relatively small size of Sub-Saharan countries in economic terms. (Alan Matthews quotes “Pan-Africanism, as an expression of continental identity and coherence, distinguishes regional integration in Africa from other regions in the developing world” from McCarthy, 1995, p. 14 in chapter 6 of his report “Regional integration and food security in developing countries”.)

The continent is also not new to regional integration, which can be argued to be partly due to the African concept of Ubuntu, i.e. “I am what I am because of who we all are”, which has drawn Africans together. In fact the first example of integration was the Southern African Customs Union, which was established in 1910. This was followed by:

  • the Southern Rhodesia Customs Union in 1949 between South Africa and present-day Zimbabwe
  • the Ghana–Upper Volta Trade Agreement between Ghana and what is now known as Burkina Faso in 1962
  • the African Common Market linking Algeria, Egypt (then known as the United Arab Republic), Ghana, Guinea, Mali, and Morocco
  • the Equatorial Customs Union, the predecessor to the Customs Union of Central African States, joining Cameroon, Central African Republic, Chad, Congo, and Gabon
  • the East African Community, comprising Kenya, Tanzania, and Uganda, established in 1967.

Many others followed, indicating a well established culture of negotiation and oral tradition. Some of these initiatives include the Community of West African States (later becoming the West African Economic and Monetary Union) in 1973, the Mano River Union in 1974, and the Economic Community of West African States in 1975. Add to this various regional economic communities (REC’s), such as The West African Economic and Monetary Union (UEMOA), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC), the East African Community (EAC). (Refer to “Assessing Regional Integration in Africa” in the Bibliozone)

REC’s have made some progress at different levels of integration, e.g. COMESA who have made progress in trade liberalization and facilitation, ECOWAS which has had an impact on free movements of people through the ECOWAS passport system, SADC and EAC in infrastructure and SADC and ECOWAS in peace and security.

Add to this a long list of activities of the OAU, such as the Lagos Plan of Action (1980), Africa's Priority Programme for Economic Recovery (1986-1990), the African Alternative Framework to Structural Adjustment Programme (1989), the African (Arusha) Charter for Popular Participation and Development (1990), the Abuja Treaty (1991) establishing the African Economic Community (AEC) and the Cairo Agenda (1994), the Millennium Africa Recovery Plan (MAP) (2001), the Omega Plan (2001), and the New African Initiative (NAI) that led to NEPAD in 2001, which was adopted by African Heads of State and Government of the OAU in 2001 and ratified by the African Union (AU) in 2002.

Current activities in regional integration are focused on creating the African Economic Community, as set out in the Abuja Treaty, through six stages culminating in an African Common Market using the Regional Economic Communities (RECs) as building blocks. The next deadline set by the AU is to achieve a fully integrated FTA (free trade area) and customs union in each regional bloc by 2017, which will represent completion of stage three.

“The very origins of African Democracy lay in ordinary oral discussion – the elders sat under a tree and talked until they agreed.” – Mwalimu Julius Nyerere

Yet, with all these initiatives, there is a vast amount of criticism leveled at African efforts of regional integration and many of these claim that these initiatives have failed partially or completely. Reasons given for this in numerous reports, articles and other publications include:

  • Low level of intra-regional trade compared to the rest of the world. (According to WTO figures quoted in the early 1990s, the proportion of intra-regional trade in Africa was only 8.4% in 1993 compared with 69.6% in Western Europe, 49.7% in Asia, 33% in North America and 19.4% in Latin America.) However, these figures severely underestimate the volume of actual trade because no proper account is taken of the size of informal trade. This would make African figures look a lot more like the rest of the world and if it is considered that there is evidence of the steady increase of intra-regional trade in recent years, then an entirely different picture becomes clear.
  • Many African states are suffering from severe macroeconomic strain, including foreign debt service burdens, lack of trade finance, a narrow tax base, overvalued currencies and customs duties as a disproportionate source of revenue. Protective import substitution strategies adopted by many states after independence also resulted in a number of restrictive trade regulations such as licensing, special taxes for foreign exchange, advance import deposits and so on. This means the economic frameworks in place are not conducive to the development of regional commitments
  • Economic costs of participation are often immediate while the benefits are usually long-term, uncertain and unevenly distributed among member states. This is exacerbated by the dominance of a few countries and large disparities in size among member states, which makes it difficult to address the equitable distribution of gains and losses from integration.
  • Regionalism has been driven from the top-down by the public sector, lacking support and involvement of the private sector and the general public. As a result cooperation has been seen as involving bloated and expensive bureaucracies, rather than opportunities for development and growth
  • Institutional weaknesses and the existence of too many regional organizations, a tendency towards bloated and top-heavy structures with too many political appointments, failures by member states to meet their financial obligations, poor preparation before meetings, and lack of follow-up by ministries on decisions taken at regional meetings by Heads of State
  • Multiple and overlapping memberships by states in regional communities, which is perceived as wasting effort and resources because multiple groups adds to the coordination work and complicates integration processes. (26 out of 53 African countries are members of two regional economic communities, 20 are members of three and one country (Democratic Republic of Congo) belongs to four. Only 6 countries maintain membership in just one regional economic community.) Calls for rationalization have resulted in clearer mandates and objectives for institutions serving these member states
  • Persistence of barriers to free flow of goods, services and people across borders
  • Insufficient capacity, technical support and resources to facilitate some integration instruments like trade liberalization, which can hamper implementation or lead to speculation and unclear vision, strategies, plans and activities, as well as lack of coherence and links among sectoral cooperation programmes
  • Divergent and unstable national macroeconomic policies which cannot be reconciled to effect integration
  • Insufficient or non-integrated transport networks

While these are reasons for not achieving integration, they have however not seemed to impact the delivery of food, medical supplies and even arms to destinations in even the remotest of regions on the continent. In fact, in 2010, 12 million people less went hungry in Africa than in 2009 according to the World Food Programme’s Yearly Review for 2010 even while the infrastructure is poor and it is claimed that there is no political will to effect regional integration. Yet that same political will is exercised effectively in the delivery of food and medical supplies to outlaying regions or achieving other initiatives.

Furthermore, intra-African trade is seen as a major component to achieve regional integration, yet it still only addresses the formal trade and not informal trade, which is the more traditional method of trade existing in Africa for centuries. There is a lot of focus on establishing policies to foster trade, and to develop communication and transportation linkages between countries in regional integration activities, partly because of exactly this culture of negotiation, oral tradition and Ubuntu present in Africa.

This work mainly at policy level has not directly impacted informal trade, however, which sustains an estimated 60 – 70 % of African families. (Chapter 5, “Assessing Regional Integration in Africa IV - Enhancing Intra-African Trade”) Informal trade takes place even across borders and across great distances, especially where homogenous ethnic groups span areas in more than one country, e.g. the Borana Oromo who extend across 500 km, from the Moyale border of Ethiopia and Kenya point to Isiolo, about 200 km from Nairobi. Other examples include the Somali ethnic groups living in Kenya, Ethiopian, Djibouti and Somali, the Afars, along the borders of Djibouti, Eritrea and Ethiopia, and the Tigrays and Kunamas on both Eritrean and Ethiopian borders.

Another example of informal trade and that has not been limited by any of these factors, is the development and growth of stokvels in South Africa, a traditionally African concept. Based on a study conducted by African Response in 2011, the estimated value of stokvels in South Africa is about R 44 billion held in more than 800 000 stokvels with as total of 11.4 million stokvel members. (http://www.bizcommunity.com/Article/196/19/67534.html)

Growth in intra-Africa trade in 2010 grew 10% more than trade with the rest of the world according to the ECA report (“Assessing Regional Integration in Africa IV - Enhancing Intra-African Trade”), this despite transport costs in Africa being among the highest in the world (as quoted from the African Development Bank Development and Research Brief of 2009 in a thematic paper presented at the 17th Africa Partnership Forum in Addis Ababa in 2011. (http://www.africapartnershipforum.org/dataoecd/17/11/48908487.pdf)

This is by no means an exhaustive list of examples of how Africans manage to trade regardless of circumstances at grassroots level or policy level and it proves the point that Africa has a longstanding tradition of trading, which is borne out by historic evidence dating back to Biblical times and supported by historical findings that trade caravans reached down the East coast of Africa as far as Great Zimbabwe, Mapungubwe and Mozambique with well known trade routes existing only a few centuries AD.

Africans also have a unique homegrown resilience and innovative spirit, as is borne out by products such as the groundnut sheller that was developed in Mali years ago, made of concrete, wood and scrap metal and only costing the equivalent of US$ 10. Or the Kenya Top bar hive, which is a lot more cost effective and productive solution to keeping bees than the European Langstroth hive.

Regional integration should form part of a greater strategy and has to date distinctly lacked the involvement of informal trading and the methods and structures associated with it, as well as not recognizing the truly African strengths locked up in oral tradition and Ubuntu. The REC’s are seen as building blocks to achieve the AEC and in similar fashion, informal trade and Ubuntu structures can be seen as a lower level of building block through which REC’s can become the much stronger corner stones to build the AEC.

If even through inadequate financial resources, war and conflict, HIV/AIDS, macro-economic instability and poor governance, informal trade still manages to sustain the greater part of African families then surely there is merit in investigating the role informal trade can play in building the AEC from the bottom up. There are mechanisms and structures already in place which support informal trade and which cannot be materially affected by of the factors that seem to constrain the achievement of regional integration at a much more macro level. Just like Africa has traditionally been poor in providing statistics relating to population and health demographics for example, so too the information pertaining to these mechanisms and structures supporting informal trade is not readily visible.

The brief summary provided at the beginning of this article showed that Africa has had many attempts at integration and that there are many reasons that can be found to explain this. Most of this is however, based on a more Western approach to addressing regional integration and not from a perspective involving Ubuntu. The point has also been made that in spite of the same reasons given for regional integration to be hampered, informal trade is still taking place and on a much larger scale than is reflected by any official statistics.

It is therefore strongly suggested that foresight research and related work be done to identify how the strengths inherent in the well established informal trade network and the values in Ubuntu can be harnessed and duplicated on a larger scale to achieve regional integration.

“Africans have a thing called UBUNTU; it is about the essence of being human it is part of the gift that Africa is going to give to the world. It embraces hospitality, caring about others, being willing to go the extra mile for the sake of another. We believe that a person is a person through other persons; that humanity is caught up and bound in yours. When I dehumanize you, I inexorably dehumanize myself. The solitary human being is a contradiction in terms, and therefore you seek to work for the common good because your humanity comes into its own community, in belonging” – Bishop Desmond Tutu

An approach to regional integration involving principles of Ubuntu and that builds on the market principles inherent in the informal trade network, could for instance firstly address integration on a micro level, e.g. establish local, community-based trade based on consensus and achieving the greater good for that community. At this level, informal trade is not hampered by rules and regulations and investigative work into this aspect should aim to highlight how the regulatory framework could be adapted to still maintain order but at the same time become an enabling framework for trade and other economic activities rather than a constricting mechanism. Trade at this level is also subject to the authority or political power of the local leader, whoever that may be.

Informal trade rests on supply and demand, as well as the resources available in the immediate environment of those involved in trading, negotiation and the feeling of common good amongst others. The innovative spirit comes to the fore when circumstances prevent this natural flow of goods, because much like a river flows to the sea and when blocked finds another route, so does informal trade always find another way of providing a product for which there is a demand. The alternatives always present themselves, which points to the fact that they already exist but that they are not recognized until the right time. For example if goods need to be delivered, the community helps each other if the standard mode of transport being a truck has broken down and will transport the goods in separate vehicles or find a replacement.

This same principle could be replicated to a national level where the greater good of the country is the focus and the role of every community is established and in place because Ubuntu says you are what you are because of what the group is. Utilizing the networks that are now already in place at community level, goods can be transported in smaller ‘packets’ but at a much higher rate, which will stimulate local economic activity dramatically and provide the basis for expanding infrastructure which in turn will then enable local activity to develop into larger scale enterprises that could begin to function at national level.

This however, can only be achieved applying a bottom up approach, while at the same time providing the high level top-down support to ensure the delivery of goods all along the value chain. For this the regulatory framework at national level is of course important and if it is restrictive or non-existent, such economic activity would not come to fruition. It will also only be effective if Africans let their true nature as reflected through Ubuntu, govern such interactions.

Now this might sound as if it is no different from what is already being addressed, but there is a small difference that will make the big impact that everyone is looking for, namely the focus should be on the greater good instead of on power or wealth creation as it most often is the case.

Bernd Oellermann
Guest Editor

 


Bernd Oellermann, Program Manager: SA Node of the Millennium Project

Read more about the author and his view on being a futurist.

 

 

 

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