Integration architecture

29th August 2014

By: Terence Creamer

Creamer Media Editor

  

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Could an Airbus-like template revive Africa’s stalled economic integration? Mandela Institute for Development Studies founder and director Dr Nkosana Moyo believes so, and recently urged African governments and the private sector to embrace a different “architecture” for economic integration.

Speaking at the Nepad Business Foundation’s (NBF’s) annual general meeting in Johannesburg, Moyo acknowledged that regional integration across 54 countries was “complicated”.

But economic-integration proponents, he said, would do well to extract lessons from aircraft manufacturer Airbus’ multiterritory production template, which distributed the benefits across countries and, in so doing, created an incentive in those markets to buy its aircraft.

Large African countries, Moyo said, 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 multicountry sharing in the railways-engineering dividends. It could do so by supporting maintenance or subcomponent manufacturing outside South Africa.

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.”

Moyo also suggested 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.

Edited by Terence Creamer
Creamer Media Editor

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