This document discusses the African economic law system and institutions, comparing it to the global and EU systems. It outlines the different levels of economic integration, from preferential trade areas to monetary unions. It describes the key institutions in the African system, including the African Investment Bank, African Monetary Fund, and African Central Bank. It then compares the African system to the global and EU systems in terms of types of institutions, functions, and steps of integration.

1. The African Economic Law
System and Institutions

2. Outline
First, general insight to levels of
integration
Then,
Structure of the African System
Comparison with the Global System
Comparison with the EU System

3. General Insight to Levels of
Integration
• Multilateral
The WTO Framework
The IMF Framework
The World Bank Group Framework
• Trade Blocs and Regional Economic
Integration
• Trade bloc = intergovernmental agreement
where tariff and non-tariff barriers to trade
are reduced or eliminated among the
participating states

4. • The following are trade blocs:
1. Preferential trade areas
• A trade blocthat gives preferential access to certain
products from the participating countries by reducing
tariffsbut not by abolishing them completely.
2.Free trade areas(bilateraland multilateral)
• A trade blocwhose member countries have signed a free-
trade agreement, which eliminates tariffs, import quotas,
and preferences on most (if not all) goodsand services
traded between them.
3.Customs unions
• A trade blocwhich is composed of a free trade areawith a
common external tariff; participant countries set up
common external tradepolicy, but in some cases they may
use different import quotas.

5. 4.Common markets
 A common market is first stage towards a single market; it
may be limited initially to a free trade area with relatively
free movement of capital and of services, but not so
advanced in reduction of therest of the trade barriers.
 A single market is a type of trade blocwhich is composed
of a free trade area(for goods) with common policies on
product regulation, and freedom of movementof the factors
of production(capitaland labor) and of enterpriseand
services.
5.Economic unions
 A trade blocwhich is composed of a common marketwith a
customs union. Participant countries have both common
policies on product regulation, freedom of movementof
goods, servicesand the factors of production(capitaland
labor) and a common external tradepolicy. They often
share common currency.

6. …….
6.Monetary (currency) unions
• A trade bloc where two or more statesshare the
same currency, without necessarily having any
further integrationsuch as an Economic and
Monetary Union(which has, in addition, a customs
unionand a single market).
• Three types of currency unions:
• Informal-unilateral adoption of foreign currency
• Formal-adoption of foreign currencyby virtue of
bilateral or multilateral agreement with the issuing
authority, sometimes supplemented by issue of local
currency in currency pegregime
• Formal with common policy-establishment by multiple
countries of common monetary policyand issuing
authorityfor their common currency

7. …….
 The following are trade blocs: contd.
7.Customs and monetary unions
 A trade blocwhich is composed of a customs unionand a currency
union; participant countries have both common external tradepolicy
and single currency.
8.Economic and monetary unions
 A trade blocwhich is composed of an economic union(common
marketand customs union) with a monetary union.
9.Complete economic integration
 An intermediate step between economic and monetary union and a
complete economic integrationis the fiscal union.

8. General Structure of the African
System
 African Economic Community Treaty (03
June 1991)
 Articles 1(c), 2, 3, 4, 6, 7, 25 & 26; Chapters IV, V,
VII, XV, XIV, XX, XXI (art. 94)
 Constitutive Act of AU (11 July 2000)
 Articles 2, 3 (c, d, i, j, l), 4, 5, 13(1(a)), 14, 15, 19
 Protocol on Amendments to the
Constitutive Act of AU (03 Feb & 11 July
2003)
 Articles 3 (i) (p) & 4 (q)

9. The Financial Institutions in the
African System
• African Investment Bank
– Establishment Protocol (04 February 2009)
– African Investment Bank Statute (02 February 2010)
– Headquarters in Tripoli, Libya
• African Monetary Fund
• Article 19 of Constitutive Act of AU (11 July 2000)
• Memorandum of Understanding signed on 30 June 2008
between the AU Commission and the Cameroon
Government to set up a Technical Steering Committee for
hosting of the African Monetary Fund in Cameroon –
signed at the margins of the 11th Ordinary Session of the
African Union Summitof Heads of States and Government
in Egypt
• Headquarters in Yaoundé, Cameroon

10. ……..
• African Central Bank
– Article 6(f(III)) ofAfrican Economic Community Treaty
(03 June 1991)
– 1999 SirteDeclaration for speeding up of the
implementation process
– Headquarters in Abuja, Nigeria

11. Comparison with the Global &
EU Systems
• Compare by type of institution
• Compare by functions
• Compare by steps of integration

12. II. The African Continental and Regional
Agreements, Institutions and Proposals
Outline
 Present Situation and the Future Direction on
Africa’s Regional and Continental Economic
integration (Trade, Monetary, Investment,
Development)
 Merits and Drawbacks of the Continental
Economic integration Proposals

13. Present Situation and the
Future
• AU Commission Strategic Plan 2009-2012 (See
text)
• Focus on executive summary, introduction and strategic
pillars (pillar 2)
• AU Heads of State DECLARATION & AU Assembly
DECISION ON BOOSTINGINTRA-AFRICAN TRADE
AND FAST TRACKING THE CONTINENTAL FREE
TRADE AREA (January 2012) (See texts)
• i) Finalization of the East African Community (EAC) -the
Common Market for Eastern and Southern Africa
(COMESA) -Southern African Development Community
(SADC) Tripartite FTA initiative by 2014;
• ii) Completion of FTA(s) by Non-Tripartite RECs, through
parallel arrangement(s) similar to the EAC-COMESA-SADC
Tripartite Initiative or reflecting the preferences of their

14. …….
iii) Consolidation of the Tripartite and other regional FTAsinto a
Continental Free Trade Area (CFTA) initiative between 2015
and 2016;
iv) Establishment of the Continental Free Trade Area (CFTA) by
2017 with the option to review the target date according to
progress made.
AU Proposed Action Plan 2012 –Endorsed by
AU Assembly DECISION (indicated above) (See
text of the Plan)
AU Action Plan for Accelerated Industrial
Development of Africa -Dec 2011 (See text)

15. III. The Issue of ‘Globalization or
Regional Economic Integration?’
 Outline
The Issue
Africa’s Position on the Issue

16. The Globalization Issue
• Globalization describes the interplay across
cultures of macro-social forces, including religion,
culture, politics and economics. Advances in
transportationand
telecommunicationsinfrastructure, including the
Internet, are major factors in globalization.
• The term globalization has been in increasing
use since the mid 1980sand especially since the
mid 1990salthough some scholars trace its
history long before the European age of
discoveryand voyages to the New World. Some
even trace the origins to the third millennium
BCE

17. • In 2000, the IMF identified four basic aspects of
globalization:
– trade and transactions,
– capital and investment movements,
– migration and movement of people, and
– the dissemination of knowledge.
• Other matters are also linked to globalization:
– Environmental challenges such as climate change,
cross-boundary water and air pollution, and over-
fishing of the ocean.

18. The Globalization Issue
• Five dimensions:
1.Economic Dimension
– The intensification and stretching of economic
interrelations around the globe
– Such things as the emergence of a new global economic
order, theinternationalization of trade and finance, the
changing power oftransnational corporations, and the
enhanced role of international economic institutions
2.Political Dimension
– The intensification and expansion of political
interrelations around the globe
– Includes the modern-nation state system and its
changing place in today’s

19. 3.Cultural Dimension
– The intensification and expansion of cultural flows across
the globe
– Culture, in the discussion on globalization, refer to “the
symbolic construction, articulation, and dissemination of
meaning”
– Discussions include the development of a global culture,
or lackthereof, the role of the media in shaping identities
and desires, and the globalization of languages
4.Ecological Dimension
• The global environmental issues: population growth,
access to food, the gap between rich and poor, the gap
between global North and global South, worldwide
reduction in biodiversity, human-induced climate change,
and global environmental degradation

20. 5.Ideological Dimension
 A range of norms, claims, beliefs, and
narratives
 Three main types of globalism:
 Market globalism-‘globalization’with free-market norms and
neoliberalmeanings
 Justice globalism-egalitarian ideals of global solidarity and
distributive justice
 Jihadistglobalism-struggle against market-and justice
globalismthrough mobilization of the global Muslim
community of believers (umma) in defense of Islamic values
and beliefs that are thought to be under severe attack by the
forces of secularism and consumerism

21. • Hence, the following aspects:
– Global business organization
• International trade
• Tax havens
• International tourism
– Economic globalization
• Capital flight
• Inequality
• Austerity
• Measurement

22. • Socio-cultural globalization
• Culture
• Politics
• Internet
• Population growth
• Health
• Sports
• Global natural environment
• Global workforce
• International migration
• Women and Globalization

23. Support
• Corporate businesses see globalization as a
positive force in the world
• Economic liberals argue that higher degrees of
political and economic freedom in the form of
free trade produce higher levels of overall
material wealth (and these include global
democracy and global civics)
• Many economists also cite statistics that seem to
support positive impact of globalization on
countries that have attempted to globalize

24. Criticism
• Critiques point out multitude of fatal
consequences–social disintegration, a
breakdown of democracy, more rapid and
extensive deterioration of the environment,
spread of new diseases, increasing poverty and
alienation, and so on
• Criticisms have arisen from church groups,
national liberation factions, peasant unionists,
intellectuals, artists, protectionists, anarchists,
supporters of re-localization (e.g., consumption
of nearby production) and others
• Some, being reformist in nature, argue for a more
moderate form of capitalism

25. • Others, being revolutionary, argue for power shift
from private to public control
• Others, being reactionary, argue for power shift
from public to private control
• Some see globalization as the promotion of
corporatist interests; also claim that the increasing
autonomy and strength of corporate entities
shapes the political policy of countries; also
advocate that global institutions and policies
should address the moral claims of poor and
working classes as well as environmental concerns
• Fair trade theorists claim that unrestricted free
trade benefitsthose with more financial leverage
(i.e. the rich) at the expense of the poor

26. • Some also argue that while it is true that free
trade encouragesglobalization among countries,
• Some countries try to protect their domestic
suppliers through subsidies and thereby harm other
countries by lowering prices
• Globalization serves as means for creating economic
opportunities for the rich by outsourcing
manufacturing and service jobs from high cost
locations to poor countries
• Globalization serves as means to weaken labor
unions
• Globalization serves as means to exploit child labor:
trafficking, bondage, farm work, forced labor,
prostitution, pornography, etc.

27. Africa’s Position
• Discuss based on
– AU Ministers of Trade Kigali Declaration on
WTO Issues -2010

28. …….
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