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African Regional Integration

African Regional Integration. African Economic Development Renata Serra – April 9 th 2007. Why Integration in Africa?. Overcome economic fragmentation Smallness of borders, landlocked-ness Promote peace and security Common peace-keeping force Promote cooperation in regional issues

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African Regional Integration

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  1. African Regional Integration African Economic Development Renata Serra – April 9th 2007

  2. Why Integration in Africa? • Overcome economic fragmentation • Smallness of borders, landlocked-ness • Promote peace and security • Common peace-keeping force • Promote cooperation in regional issues • Migration, drought (e.g. Sahel), public health, and displaced populations • Search for ‘African’ solutions • Increase African political and strategic position internationally

  3. Progressively integrated entities + Common trade barriers with outside Free Trade Area Custom Union + free factor movement Common Market + common fiscal & monetary policies Economic Union

  4. The end dream An African Economic Community!! • Plan is to get there in steps: • Strengthening regional communities • Evolutions of free trade areas and customs unions • Consolidation of a common market covering the whole continent

  5. Questions for debate • Terminology: Trade diversion: • Diversion of trade away from former trade partners as a result of the creation of a free-trade agreements (which makes trade with less-efficient producers more advantageous) • Does it make sense to reinforce regionalism if the goal is an economic union? • Is there conflict between regionalism and multilateralism? • What is (or should be) the weight of economic versus political/strategic goals in regional unions? • What lessons do emerge from the comparison with the EU experience?

  6. Main African Economic Regions • UMA: the Arab Maghreb Union • ECOWAS: West Africa • WAEMU (or UEMOA) regroups 8 Franco-phone countries, which have the Franc CFA • ECCAS: Central Africa • CEMAC: Economic and Monetary Union of Central Africa, among CFA countries • COMESA: Eastern and Southern Africa • SACU and associated Common Monetary Area • SADC: Southern Africa Development Community • EAC: East Africa Community • Some of these have been more effective than others

  7. Note: Tanzania and Namibia have now left COMESA R. Sharer, “An Agenda for Trade, Investment, and Regional Integration” Finance and Development Dec 2001, [online at: http://www.imf.org/external/pubs/ft/fandd/2001/12/sharer.htm]

  8. Ex. SACU • The longest unbroken custom union (from 1889 until today) • Functioning and effective to some degree • However there are tensions and problems: • Political tensions between SA and BLNS states during apartheid • End of apartheid did not change the power balance by much: SA dominates • Difficult future given over-lapping claims of authority by SADC

  9. Constraints • What have been the main reasons for limited success of African regional unions? • Governments’ unwillingness to cede power • Power of custom departments • Fear of dominance by large country members • Poor physical and institutional infrastructures • Perception of low current economic benefits • Over-lapping membership and too many groups (see Southern Africa)!

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