Africa’s integration:A bottom up approach (1) 

Cristina Duarte - Minister of FinanceVisiting Ghana, Africa’s heartland when it comes to African unity and integration, how can one not be tempted to share his or her views about such lofty ideals, especially as 2015 unfolds/ while the goals remain elusive?

I believe it is high time to revisit the project/ whose/credibility/ was provided/ by its chief intellectual architect, no other than Kwame Nkrumah, the first President of this West African country renowned for its deep African roots in history.African integration, indeed, needs/ a big push to get out of its current deadlock.

Rethinking them may there-fore be the right starting point to move them forward in earnest!

As Minister of Finance and Planning of Cape-Verde, I am visiting Ghana in the company of our Deputy Prime Minister and Minister of Health, Cristina Fontes Lima, who, along with other devoted policy-makers and leaders, has been instrumental in/ transforming for better, in a broad-based and shared approach, the fate of our small island nation, located off the West African coast.

The importance of regional integration has been debated and settled. In fact, we have been fighting for the idea of integration for the most part of the last five decades and have, arguably, made some successes towards its attainment. Yet, it is clear that a lot remains to be done.

We all know that regional integration is linked to economies of scale, bigger markets, and lower transaction costs. For many of our small countries on the continent, integration is a crucial ingredient for higher level of competitiveness.

Everyone also agrees on the fact that the world economy has become more global and increasingly more competitive.

Regional integration has therefore become a necessary condition for Africa to optimise its growth potential and to be able to compete and play a leading role in the global marketplace. Individually, most of our countries are simply too small.

If we all know and agree on these basic arguments, why then does regional integration face so many hurdles on the continent?

In other words, why have we been so slow in integrating our economies despite the large number of regional integration groupings existing in Africa?

The count now is about 14 trading blocks, which have been established to pursue regional integration.

The reality is that intra Africa trade is growing but it remains at only about 10% of total trade. For Western Europe and North America, comparable figures are 60% and 40%, respectively.

The intra Africa trade is telling and although many can argue about the perennial problems of data and how it does not take into account informal trade.

The fact is with or without the informal cross border trade our continent can be significantly better integrated on all fronts. The question we should be asking is why intra-Africa trade is so low compared to other regions.

The experts have advanced many explanations. Among them, one can argue that Africa is the only continent in which we produce what we do not consume and we consume what we do not produce.  Another explanation lies in the poor state of Africa’s infrastructure.

The inadequate trade finance mechanisms have also been blamed. Last but not the least, the excessive number and overlapping regional blocs have also been identified as part of the challenge.

This is especially when one considers the fact that many of the regional organizations are weak and hindered by the lack of resources.

For many, African governments are simply reluctant to empower the regional integration institutions as a result of fear of losing their sovereignty or power to make policies.

In my view, as Africans, it is time we challenge ourselves as to why we are not doing what we know must be done. Why do we have lofty goals if we are not ready to do what is necessary?

It is therefore crucial that we begin to seek new solutions. Importantly, we need to begin to engage the society. Regional integration is about the coming together of nations with the idea of achieving more than the sum of the parts.

In many ways, what we have so far is integration by protocols signed by states and which many do not adhere. This is the top down approach. We have failed to some extent to act where integration will take place: people to people, business to business. We will need a bottom up approach.

One exciting possibility that have come in recent years is the new vision for Economic Community of West African States (ECOWAS), which envisages a community of peoples and not simply of states. We have to begin to see regional integration not only through the prism of accords and treaties.

Time has come when we should now engage also the non-state actors, the people and businesses that in many ways are on the front-line of regional integration in Africa.

We should promote cross border investments by African companies and investors and ensure that the rules are favorable. Linked to this is the need for African nations to seek to mobilize investments from other countries within the continent.

Imagine the impact that mobile phone companies are having integrating African countries with one network in some of our regions. What will happen if, rather than look to Europe, America or Asia for investors, we look to Africa?

Examples are emerging. One simply has to look at the rate which Nigerian Banks and the South African firms are expanding throughout the continent.

The challenge before us as policy makers is how can we engage with these businesses and empower them and others to do more? Can we shift the regional integration dynamics along these lines or at least put equal emphasis on these?

Institutions like the African Development Bank (AfDB) can help through special windows to promote and fund projects that will facilitate regional integration, especially with respect to infrastructure and cross border investments.

The regional blocks and some of the regional instruments such as the Development Bank of Southern Africa (DBSA), Banque de Développement des Etats de l’AfriqueCentrale (BDEAC) and their other counterparts on the continent can refocus their efforts and recapitalize to fund regional integration projects not simply from States but also the private sector in areas of infrastructure, intra Africa trade and exports.

We also know that nothing will happen if we do not get the support that can be derived from real political will. But political will does not come from thin air. We the people through our civil society organizations have to foster action and put the necessary pressure as more and more of our countries adopt the democratic principles of governance.

We also know that no progress will be made if we do not address the infrastructure deficit and make it easier to get from one country to another on the continent. We must seek ways to get people and goods to move across the continent with ease in terms of time and cost.

To that end, we need to foster multi modal transportation solutions in road, railways, air and maritime transportation. We must deal with the energy/power issues as well as the roads and water. We must utilize the experience of the mobile telephone in Africa in getting right the other infrastructure.

We have to create the enabling environment and regulatory framework and also empower the private sector to partner with governments to transcend the infrastructure deficit on the continent.

This leads me to institutions because without the institutional infrastructure we will be handicapped. Institutional infrastructure is, indeed, a critical binding constraint that we must have the courage to address on the continent. It matters! We need to significantly strengthen our institutions – both regional and national in order to bring about regional integration.

Today, many of our nations are simply not cohesive whether economically, socially or politically. The disparities within and between our nations are in some cases glaring. What we find is that many of our nations are moving at quite different velocities.

Yes, we cannot all be at the same level. But we must all be working towards the same goals. It is therefore crucial that we also deal with the “national” level if we are to achieve our agenda for the “regional” level. This is fundamental for regional integration and it is in the process of building the national that we can also harmonize and put in place rules that promote a regional integration that is a win-win for all.

The reality is that we have no option but to embrace regional integration. A small country like mine, Cape Verde, simply has no chance going it alone. Many of our countries face the same reality. We must integrate to optimize Africa’s growth potential and for Africa to play a lead role in the global marketplace as envisioned by our early pan-Africanists leaders.

By Cristina Duarte

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