Africa’s attempts to integrate must adapt to and manage factors such as changing technology, migration from the countryside to cities and Africa’s large informal sector estimated by the African Development Bank (AfDB) to contribute about 55% of sub-Saharan Africa’s GDP. Nonetheless, most indicators point to a continent on the move. This transition will be facilitated by more open markets, improving infrastructure, access to technology and improved political stability.
The Economic Commission for Africa (ECA) became the champion of regional integration, already in the mid-1960s proposing the division of Africa into regions for the purposes of economic development. In April 2001, African Heads of State launched the African Union at Sirte to replace the OAU.
Greater African unity has long been a cherished but elusive goal. There is now a renewed impetus to establish closer economic and political ties among the continent’s numerous countries, based on a heightened appreciation of the need for regional integration and a clearer understanding of the reasons for past failures. This series of articles examines some of the central challenges facing the drive for integration, including enhanced trade among African countries, more roads and other infrastructure, reform of regional institutions, greater accountability and popular involvement, and closer coordination of efforts by the public and private sectors.
The idea of better integrating African countries and regions has long been promoted by political leaders in speeches, official conferences and formal treaties, although with only limited results on the ground.The advantages are numerous. Wider regional markets can open up more opportunities for African producers and consumers, beyond the sometimes small markets within their own borders. It can reduce the costs of developing essential infrastructure, including transport, communications, energy, water systems and scientific and technological research, which often lie beyond the means of individual countries. At the same time, integration facilitates large-scale investment by “reinforcing the attractiveness of our economies and reducing the risks.”The momentum for integration has come not only from the top. At many levels of society, people are actively seeking to forge more ties with each other. For some, such links already exist. For many others, they still lie in the future. Africans have also learned from the failures of past initiatives. As a result, many proponents of integration now pursue a less grandiose and more practical approach.
There is only low level connectivity between African economies although this is gradually improving. This is largely due to an incomplete legal architecture for regional integration, poor physical infrastructure and one-way trading relationships. Leading African exporters such as Angola, Algeria, Egypt, Libya, Morocco, Nigeria and South Africa have stronger economic links to the rest of the world than with regional neighbours. This represents lost economic opportunities. Integration and connectivity in other regions of the world have spurred growth in the free flow of goods, services, capital, and people. These regional economic activities and investment inter-linkages remain low in Africa.
Supply-side responses must be supported by a dynamic legal framework for regional integration, for both the continent and its constituent regional economic communities (RECs). Africa is not immune to the changing trends in the global economy. Production patterns are shifting as countries become less specialised and trade becomes more regional and based on intermediate products. Moreover Africa’s middle class, now estimated at more than 300 million people and growing at a rate of 3.2% per year since 1983, could provide a formidable source of consumer demand.
With the United States, Europe and Japan all struggling for growth, opportunities are emerging for Africa to grow on home markets and through its own consumer demand. One example is trade in personal and household goods, which experienced the fastest growth among global merchandise of 10% in 2012. Coupled with sustained economic growth, demographic changes are expected to also transform trade. While parts of the world worry about ageing, Africa has the world’s youngest population. Two thirds of its total population is aged under 25. With appropriate skills, infrastructure and the right business environment, Africa could boast a skilled labour force to establish itself as a centre for global manufacturing and services.
Africa must unite not simply to enhance the continent’s weight in global affairs, they say, but also to meet the very real needs of its people. It will free up the time of African businesspeople to do business here. It will lower costs. It will make the African consumer’s plight so much more hopeful. We must build for ourselves. The reasons for sluggish integration within Africa’s regions and highlights a need for greater political efforts and better infrastructure. It also argues that the continent’s growing middle class and its youthful population could become a key source of demand for African produced goods and services as the expansion of African retail and financial services demonstrates.
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