Africa: Towards Economic Integration - AFRICAN PARLIAMENTARY NEWS



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Sunday, August 18, 2019

Africa: Towards Economic Integration

By Dr. Tapiwa Mashakada

Dr. Tapiwa Mashakada 
Dreaming is part of envisioning. Martin Luther King had a dream of an equal and non-racial American Society. So did our African Fathers whose dream was a united, strong and prosperous Africa. Some even like Gaddaffi even dreamt about a United States of Africa. Iam talking about Julius Mwalimu Nyerere, Kwame Nkrumah, Abdel Nasser and others. But before achieving their dreams, they sought to fight for the total decolonization of Africa. In 1963, the OAU was established in Addis Ababa. 1n 1964 the OAU set up a Liberation Committee which was based in Tanzania whose head was General Hashim Mbita. The OAU Liberation Committee mobilized material and military support for guerillas in Angola, Mozambique, Zimbabwe, Namibia and South Africa. The last country to be free was South Africa which got its independence in 1994. However, Saharawi still remains under the rule of Morocco despite its claim to be a sovereign state. One or two Indian Ocean islands are still under French colonialism.

Fast forward to 1981 when African countries then sought to transform the political economy of the continent and focus on economic development. The Lagos Plan of Action of 1981 set out the roadmap for Africa's Growth. However this was not fully consummated. 1n 1991 the Abuja Treaty establishing the African Economic Community was signed. The 1992 Sirte declation paved way for the establishment of the African Union. The  Agenda 2063 laid down the roadmap to Africa's socio-economic transformation. The main goal is to achieve a fully integrated Africa and an African Economic Community. The Agenda 2063 has 10 flagship projects which are transformation markers. These include but not limited to:

1. The Single African Air Transport Market which was signed in Kigali in March 2018; 2.The African Continental Free Trade Area ( AfCFTA) signed in Kigali in March 2018 and the Free Movement, Right of Establishment and Right of Residence Protocol again signed in  Kigali in 2018.

To date, 24 African Countries have ratified the AfCFTA (the threshold is 22) while the Free Movement Protocol has so far been ratified by 4 countries, namely, Rwanda, Mali, Niger and Cape Verde. The required threshold is 15. 

In July 2019, African Heads of State and Government launched the operationalization phase of the AfCFTA in Niamey. The President of Niger is the Champion of the AfCFTA. 

These 3 Procols are game changers. When all three are ratified and implemented Africa will become more integrated through the free movement of goods, services labour and Capital. The AfCFTA is structured into 5 components with annexures.
The first agreement covers free movement of goods. The first  component category also covers free movement of services. Negotiations on the 2 categories were completed.

On free movement of goods the agreement is that 90% of goods traded among African countries must have little or zero tariffs. Of course some countries have asked for more time to comply and the principle of variable geommetry gives some countries exemptions. Zimbabwe, for example has applied for compliance at 85%. 

The third negotiations will cover free movement of Capital (Investment) and the Fifth will cover Intellectual Property Rights and Competition. Arbitration is another category. 

The AFCFTA will create a Single market of 1.2 billion peoole for goods and services, underpinned by the youth demographic dividend. The single market is also predicated on Africa's combined GDP of USD 2.5 trillion. Through trade, the transfer of skills and technology will be achieved. The private sector will benefit from supply chain linkages and boost their exports. Consumers will benefit from competition that will bring with it low prices. Trade infrastructure and border management will be improved through the implementation of Trade Facilitation measures that include one-stop border posts. 

UNECA estimates that the AfCFTA will boost intra-African Trade from its current level of 14% to 52% by 2030. So clearly the AfCFTA will spur the re-industrialization of Africa.  

However, integration will not be achieved without the free movement of people. The Protocol is gaining traction at a very painfully slow pace.The reason being security fears by African Countries. The most dominant argument is that free movement will allow criminals and terrorists to cross borders. Bigger economies like South Africa, Kenya, Nigeria and Egypt fear the influx of labour migrants and refugees. Human trafficking and smuggling is also feared. These fears must be addressed at a political level in order to promote safe, regular and orderly migration. Detractors of free movement miss the trees for the forest. Free movement does not entail illegal  border jumping. The movement of persons, workers, refugees, displaced persons, cross-border traders and business people will still happen in a regular and legal manner through border agencies. If Africa continues to restrict free movement within the African Continent (which constitutes 60%) youths will continue to die in the Mediterranean as they seek greener pastures in Europe and the Gulf Cooperation Countries (GCC). 

Already many African women are increasingly becoming victims of modern day slavery and sexual abuse as they are duped into crossing the Red Sea for greener pastures in countries like Saudi Arabia, Kuwait, Oman, Qatar, Jordan, UAE and Turkey.  About 300 000 Ugandan women are thought to be in Oman. Recently another African Head of State pledged 3000 workers to Qatar.  The only solution to stop the exploitation of African women by GCC countries is for African governments to enter into Bilateral Labour Agreements(LAs) with GCC countries. The LAs will address employment contracts, right of residence, right of establishment, social protection and portality of benefits, inter alia. 

The Single African Air Transport market will open African skies and allow Affrican air flights to reach all destinations thereby facilitating the movement of goods and people. Thanks to Ethiopian Airways which has become Africa's flag bearer as it now flies to all African countries. This is a big feat which must be lauded. 

Economic integration will, however, take place only when Regional Economic Communities (Recs) speed up regional integration. Recs are indeed the building blocks for integration. Th  AU officially  recognizes 8 Recs, namely:  CENSAD, UMA, ECCAS, ECOWAS, EAC, IGAD, SADC AND COMESA. These Recs are not mutually exclusive. There is a big problem over membership overlaps. The good news is that these Recs are making good progress in terms of regional integration. 

The EAC, is a six member Rec comprised of Tanzania, Kenya, Uganda, Rwanda, South Sudan and Burundi  probably one of the most advanced in terms of the facilitation of free movement of goods, services and people. The Treaty establishing the EAC has also been fortified by the Protocol establishing the  EAC Common Market which came hard on the heels of the EAC Free Trade Area and the EAC  Customs Union. EAC is now poised to establish a Monetary Union, hopefully not in the too distant future. The EAC has established 13 OSBPs (one stop border posts and 3 more are under construction. Thanks to the African Development and JiCA..The OSBP makes free movement of goods and persons quicker as clearance is done only once. Recently I witnessed operations at the OSBP between Kenya and Tanzania. At Namanga, the clearance of people only takes 2 minutes provided the documents are in order. The establishment of the EAC Court of Justice and the EAC Legislative Assembly is a further boon. Arusha is the seat of the EAC.

Comesa has also done very well. From a free trade area,  Customs Union to a Common market. Comesa is probably now the biggest Rec out of the 8. Comesa established the first OSBP in Africa at Chirundu, between Zimbabwe and Zambia in 2010. The Comesa headquarters is in Lusaka. 

Ecowas, which is based in Nigeria has made progress on free movement of goods and people. They have also gone past the free trade area, customs union and common market.

Igad is also making fantastic progress on migration governance. The headquarters of Igad is in Djibouti. Igad covers countries in the horn of Africa and some countries in East Africa.  

ECCAS covers Central  Africa and Uma covers North Africa ( Arab Maghreb Union).  The rules of origin always cause headaches when it comes to fixing a common external tariff in a Customs union. Be that as it may, schedules have been developed to resolve this trade quagmire.

Africa, congratulations are in order for establishing the largest free trade area on earth.

About the author: Dr. Tapiwa Mashakada is a Member of Zimbabwean Parliament and former Minister for Economic Planning and Investment Promotion. He is also a member of the Zimbabwean delegation to the Pan African Parliament (PAP) and former Chairperson of PAP’s Permanent Committee on Trade, Customs and Immigration Matters

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