Could Airbus template revive Africa’s ‘stalled’ economic integration?

18th August 2014

By: Terence Creamer

Creamer Media Editor

  

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Mandela Institute for Development Studies founder and director Dr Nkosana Moyo has urged African governments and the private sector to embrace a different “architecture” for economic integration, arguing that the current all-inclusive model had all but “stalled”.

Speaking at the NEPAD Business Foundation’s (NBF’s) annual general meeting in Johannesburg on Monday, Moyo acknowledged that regional integration across 54 countries was “complicated”. He suggested, therefore, that it might be necessary for certain African countries to move ahead of others, rather than allowing the “slowest member to determine the speed” of integration.

“Those 54 countries are not going to be in phase with each other every step of the way – it’s not possible. So those countries that ‘get it’ need to be prepared to move on ahead of the laggards, while creating a framework that says: ‘When you are ready, you can join. But we are not going to wait for you’,” the Zimbabwean national and NBF patron argued.

This view received support from a number of the NBF’s board members, including Business Unity South Africa’s acting CEO Cas Coovadia, who said a paradigm shift was required, together with greater leadership from Africa’s two largest economies, Nigeria and South Africa.

Economic-integration proponents, Moyo added, would do well to extract lessons from aircraft manufacturer Airbus’ multi-territory production template, which distributed the benefits across countries and, in so doing, created an incentive in those markets to purchase its aircraft.

Similarly, large African countries, including South Africa, needed to move beyond viewing the rest of Africa merely as a market to be exploited. Instead, countries and companies should seek to build long-lasting partnerships based on shared benefits.

“Those with more capacity need to be prepare to lead from behind and to lead by giving away certain benefits in order to create the cohesion that is necessary,” Moyo said, highlighting the disproportionate responsibility on countries such as Nigeria and South Africa to drive integration.

New Partnership for Africa’s Development, or Nepad, pioneer and NBF board member Professor Wiseman Nkhulu embraced this position, suggesting that State-owned companies such as Transnet could play a key role in facilitating a multi-country sharing in the railways-engineering dividends. It could do so by supporting maintenance or subcomponent manufacturing outside of South Africa.

Likewise, nonexecutive Nedbank chairperson Dr Reuel Khoza, who is a former Eskom chairperson as well as a NBF board member, believed there was potential to offer practical impetus to economic integration through supporting the implementation of the Grand Inga hydropower scheme on the Congo river, in the Democratic Republic of Congo.

Moyo stressed that Airbus’ distributed-benefits model had been the outcome of a political, rather than an economic decision-making process and that similar political-economy considerations would have to drive future regional integration in Africa. By accepting this political dimension it would also be easier to build in the ‘self interest’ that was necessary for politicians and civil servants to embrace integration.

Classical economics might argue that “as long as the tide is rising, don’t worry too much about which boat you are sitting in”. But Moyo labelled that argument to be impractical for politicians, who would always want to know “right upfront, how the benefits flowing from such cooperation are going to be distributed” and how they could justify such participation to the electorate.

“The Airbus architecture tends to understand that each country would need to account to its citizens in terms of why it should be part of the club.”

Edited by Creamer Media Reporter

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