Statement

By Joseph Atta-Mensah,
Senior Economic Affairs Officer, TRID, Economic Commission for Africa

Meeting to Evaluate Development Policy Management Forum (DPMF) Commissioned Research on “Deepening Political Integration of the EAC Countries”

Addis Ababa, Ethiopia
July 22, 2004

Your Excellency, Honourable Abdulrahman Kinana, Speaker of the EA Legislative Assembly,
Your excellency the representative of AU,
Honourable Professors,
The Secretariat of the EAC,
Distinguished guests,
Ladies and Gentlemen

Dr. Hakim Ben Hammouda, the director of TRID sends his deepest apologies for not being able to participate in this meeting. It is an honour and a privilege for me to represent Dr. Ben Hammouda and more importantly to be among you at this important gathering.

I have been asked to comment on ECA’s role in strengthening the political integration of the East African Community (EAC). If I could grave your indulgence, I would like to broaden my remarks to regional integration in Africa.

Regional integration is a plus for many countries. As you may recall, the Organization of African Unity (OAU) Charter and the Constitutive Act establishing the African Union define regional integration as one of the anchoring ideals of African unity. The Lagos Plan of Action and the Abuja Treaty, which establishes the African Economic Community, spell out the economic, political, and institutional mechanisms for attaining this goal.

The pursuance of regional integration would enable African countries to reap the benefits of economies of scale through the enlargement of markets. Regional integration has the potential of encouraging the development and the sharing of new technologies and products. Integration promotes efficiency, as domestic resources are used to enhance competition. Overall, an integrated African economy would result in marked improvements in well-being and a dramatic decline in poverty.

Africa is making some progress in its attempts to integrate. However, the results are mixed. Improvements have been made in the areas of trade, communications, macroeconomic polices, and transportation. The West African Economic and Monetary Union (UEMOA) and the Common Market for Eastern and Southern Africa (COMESA) have made significant progress in trade liberalization and facilitation. In the area of the movement of people, the Economic Community of West African States (ECOWAS) has made remarkable strides. The Southern African Development Community (SADC), and the East African Community (EAC) have progressed in the area of infrastructure. For peace and security, ECOWAS and SADC have to be commended for their gains.

Despite these modest gains, there remain substantial gaps between the goals and the achievements of most of the regional integration areas.  In the area of trade we observe that the move towards harmonized and integrated market is rather slow. Intra-community trade is very restricted. However, it must be noted that UEMOA, CEMAC, and the Southern African Customs Union have formed custom unions.

In the formation some RIAs, macroeconomic convergence criteria were established, with the aim of providing economic stability in the area. Disappointedly, these convergence targets have not been attained due to differences in economic and political governance and civil conflicts.

In the area of transportation sector, regional economic communities are embarking on methods to promote unrestricted facilitation, reduce cost and improve overall efficiency. For example, the Yamoussoukro Decision to gradually liberalize air transport in Africa. However, it still remains that transport costs in Africa are still far exorbitant. Also we find that throughout the continent, many road, air and rail networks are not connected.

Regional integration has brought marked improvements in the communication sector in some parts of the continent. This may be in part to the global revolution in the telecommunication technology and the growing commercialization and privatization of national services. While SADC, ECOWAS, COMESA, the Arab Maghreb Union, or UMA have increased connectivity, the Central African Economic and Monetary Community (CEMAC), the Economic Community of Central African States (ECCAS), the Economic Community of great Lakes Countries (CEPGL) are lagging far behind.

There are checked results to report in the areas of energy. With the aim of minimizing energy costs, RECs are exploiting economies of scale through larger supply systems and developing benign power sources. Some member States in ECOWAS, SADC and EAC have made appreciable progress.

Knowledge sharing on best practices among regional economic communities is a product of regional integration. For example the Southern African Centre serves SADC region for Cooperation in Agricultural Research and training in Southern Africa.

On free mobility of people, ECOWAS and the EAC have made significant progress. In an attempt to eradicate barriers to cross-border movements of people, ECOWAS has introduced the ECOWAS Passport. The EAC has also introduced a common passport valid within the community to facilitate cross-border movement of the nationals of its members.

On the production and use of public goods through the collective efforts and resource pooling, not much can be said.  However, ECOWAS and SADC have had success in the area of peace and security. Progress needs to be made in programmes for combating crimes, HIV/AIDS, technological backwardness and the harnessing of physical resources.

There are some challenges that regional integration faces. First, there is the need to rationalize the regional economic communities. A lot of countries belong to both regional communities and trading blocs. The presence of several    communities spread limited resources thin, impedes continental integration process, puts strain on a government’s ability to marshal the resources needed to cope with diverse agendas.

Second, protocols are needed to put treaties into effect so that full integration could come to fruition. The AU could be called upon to play a role in rationalizing the number of provisions of protocols across the regional economic communities, aligning them to continental objectives and securing the eventual convergence of sub-regional goals.

Third, inadequate financing is a barrier to African integration. Financial resources to support the regional economic communities come mainly from assessed contributions, but paid contributions have remained very low in relation to the budgeted needs and to the assessments. Concrete schemes should be designed to mobilize resources both internally and from external sources.

Fourth, the private sector has been excluded from the identification, formulation and implementation of integration policies and programmes. This needs to change as the private sector can serve as an important partner in the integration process by providing finance and human resources. The private sector could also play an important role in influencing policy makers to ratify and implement protocols, stabilize macroeconomic conditions, establish high institutional quality, and maintain an efficient and reliable bureaucracy and the rule of law.