12 Sep 2007: ISS Today: Regional Economic Communities - Building Blocks or Stumbling Stones?

12 September 2007: Regional Economic Communities - Building Blocks or Stumbling Stones?

 

Since the early 1960s, when most African countries emerged from under colonial rule, there have been regular calls from organisations such as the United Nation Economic Commission for Africa (UNECA) and the Organisation for African Unity (OAU) for African nations to integrate their economies into sub-regional markets.  Such integration, it was argued, would strengthen the capacity of member states to compete in the global market, as well as providing a platform for an African-wide economic union. Advocates of this view have long argued that the economic integration of the continent is an essential ingredient for Africa’s development and also for the vision of a United Africa. This vision of the critical role that economic integration could play in the future of the continent subsequently led to the signing of the Treaty Establishing the African Economic Community (AEC) in 1991 in Abuja Nigeria, (better known as the Abuja Treaty).

 

The objectives of the AEC include the promotion of economic, social and cultural development, as well as the creation of frameworks for the development and mobilisation of human resources. Among the other objectives included in the Treaty is the establishment of close and peaceful relations between member states.

 

The Abuja Treaty divided the continent into 5 regions: North, East, South, West and Central. It furthermore provided for the AEC to be set up through a gradual process marked by coordination, harmonisation and the progressive integration of existing and future Regional Economic Communities (RECs).  RECs are regarded as the building blocks of the AEC.  At the signing of the Treaty in 1991, it was stated that the implementation process will be completed in 6 stages over a period of 34 years, concluding in 2028.  The stages are as follows:

 

STAGE 1: Strengthening existing RECs and creating new ones where needed (5 years);

 

STAGE 2: Stabilisation of tariffs and other barriers to regional trade and the strengthening of sectoral integration, particularly in the field of trade, agriculture, finance, transport and communication, industry and energy; as well the as coordination and harmonisation of the activities of the RECs (8 years);

 

STAGE 3: Establishment of a free trade area and a Customs Union at the level of each REC (10 years);

 

STAGE 4: Coordination and harmonisation of tariff and non-tariff systems among RECs, with a view to establishing a Continental Customs Union (2 years);

 

STAGE 5: Establishment of an African Common Market and the adoption of common policies (4 years);

 

STAGE 6: Integration of all sectors, establishment of an African Central Bank and a single African currency, setting up of an African Economic and Monetary Union, and creating and electing the first Pan-African Parliament (5 years).

 

These clearly-defined stages of implementation and the definite timeframes connected to each stage created a sense of vision and direction. With the signing of the Abuja Treaty, it seemed as if Africa was finally making a strategically planned move towards regional integration. The RECs were seen as the mechanisms through which Africa would move closer to an Economic Unity.

 

However today, sixteen years since the signing of the Abuja Treaty, there are 14 RECs on the continent, each with its own mandate, vision and mission.  Although initially intended to be the foundation on which to build the AEC, the mushrooming of RECs has led to an incoherent, disorganised and complex web of regional and national trade agreements and commitments. The ad hoc establishment of new RECs raises the question of whether African countries are still working towards an African Economic Community at all.

 

RECs provide member states with the opportunity to establish Economic Partnership Agreements (EPAs) with developed countries and institutions like the European Union.  This creates a fertile environment in which members of the specific REC can join forces with other countries in the region to negotiate better deals and tariffs for the import and export of their products.  Although the initial reason for the creation of RECs was to enhance cooperation and trade among African countries in order to move towards African Economic Unity, a large number of countries have instead used RECs primarily as a means by which to improve their national economic conditions. The advantages of belonging to a REC motivated countries to join more than one REC, resulting in the overlapping of membership.

 

Currently 27 of Africa’s 53 countries belong to two regional groupings, 18 countries belong to three, and one country belongs to no less than four RECs. Only seven African countries hold membership of only one REC. The trend towards multiple memberships in RECs tends to dissipate the collective vision of African economic unity and leads to other problems regarding harmonisation. Multiple memberships stretch the limited resources that are available for regional integration, confuse integration goals, and lead to counterproductive competition between countries and institutions.  Countries belonging to more than one REC also find it difficult to honour their contributions and obligations in the various RECs.

 

The ad hoc establishment of new RECs and overlapping membership has unquestionably resulted in some short term economic gains for some countries, but has at the same time undermined the goal of creating the AEC as stipulated in the Abuja Treaty.  In order for the RECs to fulfil the role that they are supposed to play, more guidance and leadership is needed from both the African Union and member states. Action needs to be taken to prohibit the establishments of even more RECs on the continent, while the negative effect that multiple membership has on continental goals should be addressed as a matter of urgency.

 

If Africa wants to evolve into a united economic power, a common vision is needed. Action should be taken at both national and continental level in order to fulfil the goals of the Abuja Treaty. If the vision of a United Africa does not take precedence over national and regional interests, Africa will remain fragmented.  As the Japanese proverb puts it: “Vision without action is a daydream, and action without vision is a nightmare.”

 

Gerhard Hugo, Junior Researcher, Regional Projects ISS Tshwane (Pretoria)