The message surrounding the virtues of greater economic integration across Africa is not new. However, the conversation appears to be shifting from rhetoric to implementation – albeit at a pace that does not adequately reflect the urgency required.
African Development Bank (AfDB) president Donald Kaberuka did his best to articulate the need to pick up the pace at the recent Africa Economic Conference, in Johannesburg. He argued that Africa’s current growth “turning point” should not be construed as a sustainable development “tipping point”, adding that such a tipping point could only truly be brought about through a process of economic integration.
“If you look at where the global economy is going now, the export model is beginning to show its limitations. So, all countries are trying to develop their domestic markets,” he said, asserting that Africa’s “domestic market” was currently inhibited by the fact that it was broken into 54 individual countries.
Flanked by African Union chairperson Dr Nkosazana Dlamini-Zuma, Kaberuka likened the prevailing fragmentation to declaring South Africa’s nine provinces as separate countries and still expecting the same economic performance.
The debate was, thus, no longer about the need for regional integration, but how to accelerate implementation to bolster Africa’s resilience to external shocks and lay the basis for sustained growth. On average, African countries were currently growing at around 5.5%, but the AfDB believes a minimum growth rate of 7% over a sustained period is needed to create jobs and tackle chronic poverty.
For her part, Dlamini-Zuma urged the continent’s eight, often overlapping, regional economic communities (RECs) to “take the bull by the horns” and deal with the prevailing constraints to accelerated regional integration.
Kaberuka encouraged leaders to “rethink the zero-sum calculus” currently impeding regional-integration progress for fear that should one country benefit the other might lose out. “Evidence is ample that along the way it is a win-win for each and every one.”
However, United Nations Economic Commission for Africa deputy executive secretary Dr Abdalla Hamdok cautioned that, while regional integration is a key developmental tool, it would also be essential for countries to weigh both the benefits and costs so as to boost gains and minimise losses. “Strategies should include a transparent, equitable, rules-based system for sharing gains and resolving disputes,” Hamdok said.
Also speaking at the event, South Africa’s Finance Minister, Pravin Gordhan, stressed the need for early successes and tangible progress on both cross-border infrastructure projects and trade-facilitation initiatives, such as one-stop border posts.
“We need to show a half a dozen success stories over the coming five years,” Gordhan averred.
He also emphasised the need to improve project preparation, indicating that money could be secured for well-designed infrastructure projects. Part of that finance could be mobilised through creating the conditions necessary for African investors to repatriate the $500- billion in savings that was currently invested abroad.
Major strides could also be made simply through the implementation of the commitments that had already been made by African leaders. Kaberuka referred specifically to the Yamoussoukro Agreement, which was concluded in 1998 in a bid to deregulate the aviation sector. “That single act alone would most likely bring more investors into the sector, driving flying costs down, probably as much as 40%.”