PRESS CONFERENCE ON REGIONAL INTEGRATION IN AFRICA

PRESS CONFERENCE ON REGIONAL INTEGRATION IN AFRICA

A vision was needed of how to combine the pragmatism of regional integration with the complexity of the African continent, the Executive Secretary of the Economic Commission for Africa told correspondents today, upon the launch of the first-ever continent-wide assessment on such integration efforts.

The report, entitled “Assessing Regional Integration in Africa”, was characterized today in a Commission press release as a “ground-breaking” publication, which provides a comprehensive evaluation of Africa’s integration process, showing where efforts had succeeded or failed.  The assessment includes, for example, analysis of why intra-African trade remains low, and how the lack of macroeconomic policy convergence and insufficient infrastructures hamper integration. 

The Commission’s Executive Secretary, K.Y. Amoako, said that when the report had been commissioned, two years ago, its authors had been seized by the fact that for so many years African leaders had stressed the importance of regional integration and, as part of that, had established many institutions and regional economic communities.  Considerable efforts had gone into the integration agenda, now it was time to take stock.  In that context, the report was very important. 

The report analyzes efforts made by African countries to integrate their economies from the establishment of the African Economic Community in 1994 to the creation of the African Union in 2000.  It examines the wide array of institutions and protocols, that have been established and/or signed by African countries to foster regional integration.  It concludes that the results have, so far, not matched the efforts deployed. 

According to the report, intra-African trade, for example, remained weak and undiversified, hobbled by numerous supply-side bottlenecks.  Another key observation is that the amount of resources, both human and financial, applied to integration had not matched the ambitions of African political leaders.  The report makes several recommendations on accelerating the pace of integration, including searching alternative financing mechanisms, establishing sound monetary and financial frameworks, engaging the private sector, and addressing issues of regional and public goods. 

Mr.Amoako made the case for regional integration, which rested mainly on the idea that the many small African countries, especially in the context of the globalized world, needed integration, larger markets and economic scales to promote investment and competition.  Regional approaches were also important in other several key challenges to the continent, including the fight against the HIV/AIDS epidemic, and the need to cut transport costs, which was one of the largest impediments to Africa in the global economy.

The report highlighted the importance of expanding trade with Africa, whose nations accounted for only 10 per cent of overall global trade, he noted.  Another impediment was the reliance of many African countries on only a few prime commodities.  There were indeed several bottlenecks within Africa that needed to be removed if Africa trade was to be improved, including agreement on the removal of trade barriers, and so forth.

He commended the initiative to create an African monetary union with one currency, for which the report outlined some of the ways and means towards meeting that objective.  There were also the specific challenges facing the many landlocked countries, for which transportation links with the rest of Africa and the world must be enhanced.  One notable achievement in the area of transport documented in the report was the Yamoussoukro Declaration to gradually liberalize air transport in Africa, but the reality on the ground was that transport costs there were still among the world’s highest.  For example, to ship a car from Tokyo, Japan, to Abidjan, Côte d’Ivoire, costs $1,500, while shipping the same car from Addis Ababa, Ethiopia, to Abidjan costs up to $5,000.  Transport links were much improved in some regions, but that was still a major problem for Central Africa.

In terms of communication, he said that the use of the mobile telephone was growing fast in Africa, which had been helpful.  And, some regional economic communities were demonstrating more connectivity, such as the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS).  But, others were lagging behind, such as the Central African Economic and Monetary Community (CEMAC), the Economic Community of Central African States (ECCAS), the Economic Community of Great Lakes Countries (CEPGL), and it was still quite difficult to call across national borders in Africa.

He cited some successes in the field of energy, with many regional economic communities seeking to minimize energy costs by exploiting economies of scale through larger regional supply systems based on power pools and interconnected grids, and by developing environmentally-benign power sources.  Yet, while Africa was among the most concentrated source of hydropower, for example, that had not been fully exploited.  And, while the Southern Africa power pool had been a means of minimizing energy costs by exploiting large regional supply systems, that idea had not been picked up in West Africa, where a power plan was under negotiation.

Touching on several more areas where integration had been measured in the report, he noted the consequences of conflict.  In Central and West Africa, resources and attention had been diverted from the economic agenda, as so much was needed to build peace.  A study was under way in Côte d’Ivoire to assess the impact of that crisis on the West African economies as a whole.  Recalling the recent summit meeting of the African Union in Addis Ababa, he said the focus had been mainly on the Union’s work plan and strategy framework.  He very much supported the latter, as that had touched on many areas linked to integration.  Another welcome decision had been for the summit to meet twice yearly.

A correspondent asked if the difficulty in travelling from one African nation to another, which usually meant first via Geneva or Paris, as well as the problems with land lines, was due to the fact that the colonial structure was still in place.  He said there had always been limits of that nature and not much progress had been made in addressing them.  The agenda for changing those difficult air transport links, for example, had been spelled out in the report.

Another correspondent, noting the expressed view among some Africans that former colonial masters gave independence to African countries but were now coming in the back door under the privatization process, asked to what extent that had been a problem for African integration.

He said that privatization had only taken place in a few countries -- in the oil sector, for example.  Clearly, there was a need for the private sector to come in and privatization was one way to do that, but he had not seen that process across the board in Africa, yet.  Some lessons should be heeded, however, including the need for a working regulatory framework to ensure that the public monopoly was not replaced with a private one.  In Zambia, for example, when the mines were privatized, people felt the country was just giving away its national assets to external entities. 

It was not necessarily the sanctions themselves that had hampered integration in Africa, he replied to another question, but the root causes of the problems leading to the imposition of sanctions.  Those problems should be addressed.  The Sudan, which the correspondent had said might be facing sanctions, was a huge country with a great role in that part of the world.  Peace there would expand investments in the oil sector.  Zimbabwe had had a very strong economy and had been a powerhouse in the region, but that country was now in deficit, which was, indeed, hampering integration efforts.

Responding to a question about who would read or use that broad study, he agreed it was huge, owing to the fact that of a 20- to 30-year process had been analysed.  The key was how to follow it up.  It had already been decided that every year, or alternating years, one specific area of integration would be examined to allow for a focused dialogue with policy makers in that area.  The following year would “take a different bite,” he added.

To a criticism that the establishment of so many institutions had achieved no tangible results, he said he did not agree that those institutions had accomplished nothing and suggested that the correspondent read the report.  Areas had been identified where institutions had done very well in the areas of integration under study.  When it came to transportation, for example, many improvements had been made in the last two or three years in the context of collaboration on the Yamoussoukro Declaration.  So, there had been some progress, which should be recognized.  Still, the issue of insufficient resources, both financial and human, was preoccupying.

He added that the Commission had tried to be a voice for Africa on many issues.  In trade, it was doing a lot of work behind the scenes with Africa policy makers, providing advice on a range of issues, especially for the Doha round of talks.  It was also working on the Millennium Development Goals, by elaborating a major report every two years to see what the countries of the Organization for Economic Cooperation and Development (OECD) were doing to meet their obligations with regard to Africa, and what Africa was doing to meet its obligations.

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