By Vladimir Antwi-Danso (PhD) Snr. Research FellowLegon Centre for International Affairs University of Ghana, Legon – Accra Ghana Tel: 233-21-50102 Cell:233-244-613282 firstname.lastname@example.org Vantwi-Danso@ug.edu.gh
The Economic Community of West African States (ECOWAS) Mauritania has rejoined the Community -2006 3
IntroductionECOWAS was conceived as a meanstoward economic integration anddevelopment intended to lead to theeventual establishment of aneconomic union in west Africa,ensuring economic stability andenhancing relations among memberstates
Introduction Cont’d The OAU (the precursor to the AU), on the other hand, had the following objectives:To rid the Continent of the remaining vestiges of colonialism and apartheid;To promote unity and solidarity among African statesTo coordinate and intensify cooperation for development;
OAU Objectives cont’dTo safeguard the sovereignty andterritorial integrity of Member States;andTo promote international cooperationwithin the framework of the UnitedNations.
Introduction (cont’d)The OAU, having fulfilled the basic aims ofits formation, was transformed into the AU,with a view, inter-alia, to accelerating theprocess of integration in the continent toenable it play a meaningful role in theglobal economy, while addressingmultifaceted social, economic, and politicalproblems, compounded as they are bycertain negative aspects of globalization.The basic platform for the realization ofthis noble goal was the 1991 Abuja Treaty–The AEC project.
AimOur basic aim this morning, would,therefore, be to highlight the basicchallenges confronting the twointegration projects of the AU andECOWAS as well as conjecture whatprospects there are, if any, forsurmounting those challenges.
ScopeIn realizing this aim, we shall go throughthe following scope:Historical Evolution of the AU andECOWASMain Hurdles of Integration in AfricaProspectsThe Way Forward
Historical Evolution (ECOWAS)Founded in May 1975Spearheaded and inspired into action bythe then Heads of State of Nigeria(Yakubu Gowon) and Togo (GnassingbeEyadema)Pre-colonial agitation and Nkrumah’sOAS, as well as President Tubman’seagerness contributed immensely towardsthe formation of ECOWAS
ECOWAS - Evolution Treaty Revised in July 1993 with a new aim“to reaffirm the establishment of the ECOWAS and decide that it shall ultimately be the sole economic community in the region for the purpose of economic integration and the realization of the objectives of the African Economic Community”
The AU - Evolution Pan Africanist Congress of 1945 The OAS Prelude to the OAU The Polarization of Integration The Role of the Cold WarThe Sitr DeclarationThe AU is bornThe NEPAD
The AU African countries resolved to move towards a more resolute union by establishing the African Union in 2001 to replace the OAU. Basically the AU was meant to: Accelerate the implementation of the Abuja Treaty Strengthen the RECS and Speed up the establishment of the continent’s institutions of the AEC.
The Nature of IntegrationThe various approachesThe political/security typeLoose Trade ConfederationThe Market ApproachThe Production Approach**The Institutional Approach**Infrastructural Approach**
What is Regionalism and/or regional Integration? Definition/Approaches Reciprocal Reduction of trade barriers Regional trading arrangements Regionalism or Regional integration may thus be defined as the “Commercial policy of discriminatively reducing or eliminating trade barriers only among the nations joining together” The degree, though, of economic integration varies.Basically therefore, integration is trade-induced
Degree (Types) of IntegrationFor the attainment of a full-fledgedintegration, a regional bloc may have togo through four main stages of economiccooperation.
A Free Trade Area (FTA), in whichmembers remove trade barriers amongthemselves, but keep their separatenational barriers against trade with theoutside world.e.g. European Free Trade Area formedin 1960.North American Free Trade Area(NAFTA), which was formally incepted in1994.
A Customs Union, in which againmembers remove all barriers totrade among themselves and adopta common set of external barriers.By so doing, the need for customsinspection at internal borders iseliminated. The European EconomicCommunity (EEC) from 1957 to1992 had included a customs unionalong with some other agreements.
A Common Market, where membersallow full freedom of factor flows(migration of labour or capital) amongthemselves in addition to having acustoms union. It should be noted that,despite its name, the EuropeanCommon Market (or EEC, then EC orEU) was not a common market upthrough the 1980s, because it still hadsubstantial barriers to the internationalmovement of labour and capital. The EUbecame a common market, and more, inreality at the end of 1992.
Full Economic Union (Community), inwhich member countries unify all theireconomic policies, including monetary,fiscal, and welfare. Policies toward tradeand factor migration are alsoharmonized. The EU has approachedfull unity, though governments keepmuch of their tax autonomy. Monetaryunion has been achieved, even thoughsome members (Great Britain forinstance) are still outside of the totalmonetary integration.
FEATURES OF BLOCType of Free Trade Common Free HarmonizationBloc among the External Movement of of all Economic members Tariffs Factors of Policies (fiscal, Production Monetary, etc,.)Free Trade + - - -Area (FTA) Customs + + - - Union Common + + + - MarketEconomic + + + + Union
Challenges to Integration inAfrica (AU and ECOWAS)
HURDLES OF INTEGRATION IN AFRICA Economic weakness and relative stagnancy of African economies and its negative impact on government policies The lack of full commitment in the sense of the failure to incorporate agreements reached by different integration schemes in national plans
ChallengesThe private sector which is the engineof economic growth, has not beenactively involved in the effort toadvance integration by the variousAfrican StatesInability of the members of economicblocs to create the facilities andmechanisms necessary to expedite themovement of goods and services
ChallengesProcedures governing freemovement of goods and servicesare lengthy and cumbersome andoften lead to delays andunnecessary bureaucratic workThe dis-equalizing effect ofintegration
ChallengesLack of intra-African trade. Africancountries produce the same things andtherefore compete with one another.Further, there is no adequate transportinfrastructure for intra-African trade.Even when tariffs have been reducedand intra-country transport links areopen, the costs of transport betweencountries forming a cooperation bloctend to be high.
The African Development Report 2003laments Africa’s abysmal performance inthe area of trade thus: “African regionalarrangements have not succeeded inappreciably expanding intra-African trade,increasing Africa’s trade or enhancing theregion’s overall economic growth…..Inter-regional trade has stagnated at around 10percent of Africa’s total trade”.
There are problems of operational andinstitutional nature, which make intra-Africancooperation difficult. These relate toinformation, banking, language, costs ofpromotion, prices of research, etc.To the above may be added the issue oftrade creation. Some countries put accent oncalculation of costs and benefits on short-termbasis. Yet, the effects of changes in relativeprices, brought about by eliminating tradebarriers among the participating countries, isrealized in the long-term as cooperationarrangements do not accrue benefitsimmediately to developing economies.
Another problem relates to the running and management of the secretariats of the economic blocs. Some of the problems are of administrative nature but are linked to policies pursued by governments. Such roadblocks, inter alia, include: - The limitations put by member states on chief executives’ independence to recruit staff and manage secretariats, and the tendency of some countries to force candidates on the secretariats and to listen to complaints from staff members who are their nationals about the management of the secretariats Short-termism
Other Challenges Relate to: The Difficulties in macro-economic policy harmonization Duplication/ The Spaghetti Bowl Elite non-complementarity Bad governance and the spectre of intra-state wars. The Challenge of globalization
The Banjul (2006) Accepted Groupings 33 Vlad 2011
InstabilityBad Governance has created conditions ofinstability in most parts of Africa. In fact,Africa is known to have produced most ofthe incompetent, rapacious, andgrotesquely predatory governments in theworld.Lack of prudence in economic governance,corruption, clientilism, exclusivism, andprofligacy have often led to impoverishmentof large sections of society in Africa, leadingoften to insurgency and civil unrests,including war. Instability is the worst enemy
ProspectsIncreasing Realization that Integration is asine-qua-non to developmentGlobal support to integrationThe EU Success storyThe Emergence of New African LeadersThe NEPADThe Activism of CSOs
The Way ForwardDiversification of ProductionIncreased Intra-African TradeIntensive overhaul of infrastructureIntensive cooperation in CommunityProjects (WAPP, WAGPP, etc.)Elite socializationRationalization of the RECsIntensive involvement of the socio-economic partners in development
The Way Forward (cont’d)Realization of the NEPAD idealsEstablishing the Institutional props tointegration and staffing them withtechnocrats, instead of politiciansRe-orienting Frontline Institutions (CEPS,Immigration etc)Increased Democracy and GoodGovernance and eliminating the specter ofwars.Complement the good works of the AfDBthrough prudence in economicgovernance
ConclusionThere is obviously only one conclusion!
“Africa is beyond bemoaning the past for its problems.The task of undoing the past is ours, with thesupport of those willing to join us in a continentalrenewal.We have a new generation of leaders who knowthat we must take responsibility for our owndestiny, that we will uplift ourselves only by ourown efforts with those who wish us well”. Nelson Mandela