“ Eastern Africa : Achieving MDGs, difficult but not impossible”

Commentary by Patrick Bugembe, Director, The ECA Subregional Office for Eastern Africa (SRO-EA).

Urgent need for Sustaining and Deepening economic growth

The last half decade has shown that a stable macroeconomic environment –reflected in low inflation, market-determined exchange rates, low fiscal deficits, and prudent monetary policy- is required to raise growth rates and reduce poverty.

During the last decade, the Eastern African sub-region continued to record negative trade balances. These are due, notably, to the quality and quantity of exported goods, the low productivity level in the export sectors and the unfavourable terms of trade.

The economy of the sub-region is more import-dependent than export-oriented. On a positive note, some countries have established vigorous policies towards diversification of their exports. The growth rate in Eastern Africa , estimated at 6.8 percent in 2007, is still below the one required to make significant inroads in reducing poverty. Most studies have shown that an average of Africa 's growth rate of at least 7 per cent is needed for that.

Promoting sustainable Peace and security for economic growth

The significance of political stability on economic performance cannot be overemphasized. Indeed, it has been observed that armed conflicts and political instability have impacted negatively on the economic performance of countries.

The war between Ethiopia and Eritrea , the Somali civil war, internal strives and cross border conflicts in Great Lakes countries ( Rwanda , Burundi , Uganda , D R Congo) have had adverse effects on stabilization and development efforts. In 2002, contested presidential elections in Madagascar led to the deterioration of macroeconomic aggregates, and economic growth declined from 6.7 per cent to -11.9 per cent between 2001 and 2002. In Kenya , uncertainties surrounding 2002 presidential elections, and political conflicts in connection with presidential elections in 2007 triggered a fall in import and credit demand as well as a decline in the development aid flows.

Countries in Eastern Africa should undertake necessary measures to ensure sustainable peace and security in the sub-region. The goal can be achieved through the promotion of joint management of common borders and enhancing regional cooperation. Regional Economic Communities will have a major role to play by setting up appropriate mechanisms for peace and security in the sub-region.

Accelerating regional integration process

Regional integration can play a major role in tackling issues such as harmonization of macroeconomic policies, trade liberalization, negotiation policies, improving economic governance, rehabilitating transport and ICT infrastructures, etc. The small size of most of economies in the sub-region and the fact that most countries are landlocked call for regional approaches to common problems: infrastructure in trade corridors, common institutional and legal frameworks (customs administration, competition policy, regulation of common property resources such as fisheries), and trans-border solutions to regional health issues (World Bank 2007). African leaders are more aware of the benefits of regional approaches, especially in matters related to trade and infrastructure.

The New Partnership for Africa 's Development (NEPAD) has adopted regional integration as one of its core objectives, and the African Union is leading efforts to rationalize regional economic communities. Most countries in this sub-region are party to multiple treaties or conventions addressing joint development agenda. But progress on most of them has been hampered by the technical complexity of multi-country projects and the time required for decisions by multiple governments.

Importance of policy harmonisation and collective action

These and related issues are the focus of the 12th Meeting of the Intergovernmental Committee of Experts (ICE) organised by the ECA Subregional Office for Eastern Africa ( SRO-EA ) from 24 to 25 March 2008 in Addis Ababa. The Committee is an organ of the ECA Conference of Ministers established to supervise the activities of subregional offices.

As ECA's prime focus is to support Africa to attain the Millennium Development Goals (MDGs) and other key development challenges within the agreed time-frame, the theme selected for the meeting is: “ Meeting Sub-Regional Challenges in the 21st Century: Regional Integration and Financing for Development towards the achievement of MDGs”. The major objective of the meeting is to define strategic modalities for accelerating the achievement of those objectives with particular focus on regional integration. The ICE meeting is organized at a time when ECA is celebrating its 50th anniversary. Also, it is an opportunity to start a new era for promoting regional integration in support of the African Union's vision and priorities.

RECs (COMESA, IOC, EAC, and IGAD), the building blocs of regional integration, Regional Groups (CEPGL and ICGLR) and other partners will attend as resource institutions and will make presentations at the meeting.

SRO-EA is one of the five subregions of the United Nations Economic Commission for Africa (ECA). It serves 13 countries including Burundi , Comoros , Democratic Republic of the Congo , Djibouti , Eritrea , Ethiopia , Kenya , Madagascar , Rwanda , Seychelles , Somalia , Tanzania and Uganda .

Almost all of the countries of the subregion show a low level of development and a high level of poverty. Although this sub-region has the biggest share of African population (30%), it represents only 10% of the GDP of the continent. Five out of 13 countries are landlocked, 5 have access to sea and 3 are islands in Indian Ocean . More that 50% of the populations in the sub-region live with less than one dollar per day and per person. The sub-region is considered as one of the poorest in Africa . Collective action and deeper regional integration is therefore critical.