The Challenges And Prospects Of The Future Of Integration In

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

THE

ROBERT GORDON UNIVERSITY ABERDEEN ABERDEEN BUSINESS SCHOOL DEPARTMENT OF LAW, ECONOMICS AND PUBLIC POLICY

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

2007

By Anthony Erihre Oneya 0514087 Dissertation Supervisor: Mr. Thorsten Lauterbach Submitted in partial completion of the degree of Postgraduate Masters Degree (MSc)

ABSTRACT.

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Word Count 22,297

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

One of the inspirations to write on the regional integration in Africa and the comparisons of the EU and AU came right after my visit in June 2007 to the European Commission in Brussels. I had seen the EU capital blossom with developmental structures; from affordable transport networks to fair trade in goods and services and the pride of its currency - The Euro. I wanted to do a research on the EU and review what led to its great development and look at what made the African regions pursuit for the same, falter for so long. A more descriptive and literature based analysis is used to scrutinize the relationship between the AU & EU. Researching articles for this paper have been quite challenging as papers, articles, books and journals have been easier and more efficient to find for the EU and major regional trade topics for the same than for the AU. As for the African Union, as the paper is read on, we find that although journals, articles, and books were researched and used, more of the information has been web based and so were its articles. The study shows that although, it is argued on what structure the AU is built upon, it has not shown a basis of significance of its structure and the region may well be intoned with other institutional structures of supra-nationality. The study will therefore recommend that on the whole, that the result for integration efforts in Africa has improved tremendously and records positive results for the future. But that future may be far and vague as argued.

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Acknowledgement

Anthony Erihre Oneya MSc International Trade 2006

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

I would first of all want to thank God for making my stay at the Robert Gordon’s University a Success. To my Parents, Siblings, Twin Sister, and my two Angels (Sandra and Lil’ Antonia) Thank you all for your prayers. To my Course mates and Friends My Supervisor, Mr Thorsten Lauterbach. You always made sure I put my best into this work and made sure I did not fall victim of a bad academic work. Thank you Sir for your support To all my Tutors: Liliana Hiris, (your classes and road trip inspired this work.) Mr. Paul Arnell, (you gave me a focus in life with your course), Angel, Collin Watson, Prof. Rebecca Wallace, and every other person that has taught me a line or two; Education, they say is the best gift anyone can offer a person. And to my cousin, Mr. Solomon Edojah, and Uncle Lucky (Bulwark Services), thank for all your support. You made all this possible. Thank you. And to everyone who supported me through my course here, thank you all.

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Abstract Acknowledgements Contents Anthony Erihre Oneya MSc International Trade 2006

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Table of Contents

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Acronyms and Abbreviations

VI

CHAPTER 1 – INTRODUCTION 1.1 Introduction 1.2 Statement of Problem 1.3 Objective of Study 1.4 Significance of Study 1.5 Plan and Scope of Study

CHAPTER 2 – BACKGROUND OF STUDY 2.0 Regional Integration: Antecedence 2.1 Introduction 2.1.0 African (Regional) Integration 2.1.1 European (Regional) Integration 2.1.2 Conceptual Issues 2.1.3 Review of Relevant Literature 2.2 African Integration? Is it Imperative? 2.2.1. The Drive behind its integration and its evolution so far. 2.3 The Limits to Free movements of Integration and Enforcement Rules in the AU (its challenges) 2.3.1 The African Union and Its Challenges.

CHAPTER 3 – COMPARATIVE ANALYSIS 3.0 Introduction 3.1 Comparison of the AU and EU 3.2 Africa’s phases of integration; towards the EU blue print.

CHAPTER 4 - REGIONAL INTEGRATION ARRANGEMENTS IT’S IMPACT ON THE AFRICAN REGION.

4.1 Regional Integration Arrangements; the Viner Literature Anthony Erihre Oneya MSc International Trade 2006

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4.0 Introduction

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

4.2 Early Studies of (EU) Regional Integration Arrangements 4.3 Regional Integration Arrangements and the African Union CHAPTER 5 – DISCUSSIONS 5.0 Introduction 5.1 Discussions CHAPTER 6 – SUMMARY, CONCLUSION AND RECOMMENDATIONS 6.1 Summary 6.2 Recommendations 6.3 Conclusion APPENDICES Appendix A Pictorial Representations of the AU and EU Regions. BIBLIOGRAPHY

List of Acronyms ACP - Africa-Caribbean-Pacific

AGOA – African Growth and Opportunity Act AMU - Arab Maghreb Union (UMA) Anthony Erihre Oneya MSc International Trade 2006

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ACJ - African Court of Justice

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

AU – African Union APEC - Asia Pacific Economic Co-operation ASEAN - Association of South East Asian Nations BOAD - West African Development Bank/Banque Ouest Africaine de Développement CAF - Central African Federation CAMU - Central African Monetary Union (UMAC) CEAC - Communauté Économique d’Afrique Centrale (Central African Economic Community) CEAO - Communauté Économique d’Afrique de l’Ouest (Economic Community of West Africa) CEFTA - Central European Free Trade Association CEMAC - Communauté Économique et Monétaire de l'Afrique Centrale CFSP - Common Foreign and Security Policy COMESA - Common Market for Eastern and Southern Africa COREPER - Committee of Permanent Representatives CPA – Cotonou Partnership Agreement EAC - East African community EBA – Everything But Arms ECOMOG - ECOWAS Monitoring Group (Military and Security Cooperation for West African States) ECOSOC - Economic and Social Committee ECOWAS -Economic Community of West African States (in French: CEDFAO) EEA- European Economic Area EU - European Union EC - Economic Community EEC - European Economic Community

EURATOM - European Atomic Energy Community EP - European Parliament Anthony Erihre Oneya MSc International Trade 2006

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EFTA - European Free Trade Association

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

EPA – Economic Partnership Agreements EMU – European Monetary Union FTAA - Free Trade Area of the Americas GSP - Generalized System of Preferences IGAD – The Intergovernmental Authority for Development JHA - Justice and Home Affairs MERCOSUR - Mercado Común del Sur, Argentina, Brazil, Paraguay, Uruguay NAFTA - North American Free Trade Area (Agreement) OAU – Organization of African Unity REC – Regional Economic Community SADC - Southern African Development Community SADCC - Southern African Development Coordination Conference SACU - Southern African Customs Union SAFTA - South American Free Trade Area TEU - Treaty of the European Union UEMOA - Union Economique et Monétaire Ouest Africaine UNCTAD – United Nations Council on Trade and Development WAEMU - West African Economic and Monetary Union

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WTO - World Trade Organization

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The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

CHAPTER ONE INTRODUCTION

1.1. Introduction

The efforts of attaining integration in Africa are not new and dates back to the panAfricanism movement; its growth towards the formations of different structure for economic progress. There are promising signs which indicate better prospects for the future; the harmonisation of investment laws and promotion of cross border investment, will serve as a plus to the economic integration process and the issues of free trade and investment promotion which becomes necessary for this process. African economies in general suffer from far too many structural realities to allow for free and fair regional markets and smooth integration. Many structures have been initiated to improve its trade and economic growth, but have faced stumbling challenges as it goes. Following the emergence and the success of the Euro, there has been a renewed and growing interest globally in fostering economic & monetary integration as a means of facilitating economic growth and development of an integrating entity1. Africa is faced with a multitude of problems that makes economic integration difficult; leaving the problem of how priority accorded to the implementation of integration programs. However, economic integration in Africa is of full developmental variant; which

1.2. Statement of Problem. 1 Jonanovic M. (1992), International Economic Integration. London, Kontledge.

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will allow the need for economic growth and participation in a global world economy.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Regional integration over time has become a valuable tool for the facilitation of global trade and the formation of regional markets has become a way of handling developmental goals. The AU has embraced this initiative but faces many challenges in achieving the envied success of the EU. The institution was established for the unification of the African region on a basis of true pan-Africanism and the elimination between member states, barriers and effects on exports and imports. Its goals go beyond the creation of a common market but to make integration an effective tool for the development of its nations. Africa finds herself confronted with developmental challenges and problems: wars2, poverty, corruption, mismanagement, etc. Clearly, its sub-regional blocs have done well for the process of integration at its level3. However, the question becomes “is the AU really structured for integration as the EU? And has it become more politically inclined than economically? Or is it prepared for the implementation of economic and monetary policies of integration as the EU? Or maybe nations of the region would rather be structured as regional blocs or better still, improve its trade development by signing deals with other regions of the world.4 Unless governments draw up a strategy, the drive towards growth of the union’s integration falters.

1.3. Objective of Study This paper has two objectives: first, compare regional integration in the AU and EU and their steps and focus towards a unified institution. Secondly, it highlights the most important issues that have affected the progress of regional integration in Africa in the past, and assess the implications and prospects for the future. The research also seeks to contribute to contemporary literatures from the academia and press on the prospects for a unified African region. 2 As opposed to the EU which in 50years has not recorded a single war as yet. 3 These blocs were set up at different regional sections for the development of the region. From the ECOWAS to the SADC, sub-regional blocs has help

fashioned monetary and single market policies to follow. 4 Many regions have shown interest in recent times to help improve trade in Africa. Regions like the EU and China. As seen in recent talks with China and African leaders. available from; http://news.bbc.co.uk.

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improved trade, goods and services and the free movement of persons around the region. It has structure a peace and security policy for the region and

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

1.4. Significance of Study There is an African proverb that says ‘when a Spider web unites, they can tie down a Lion’ and another; ‘it is more difficult to break a bundle of broomsticks than a single one’. Both proverbs go a long way to define the essence of Africa’s drive for integration and the values of “UNITY” and it is by this, nations have formed institutions to look at the welfare and progress of their people and economy. Like the EU, Africa too has built this same focus of looking after its own and improving its resources through integration of its nations and has become essential for the world economy. There have been so many talks and arguments about a United States of Africa and the regions drive for integration. Like every other study on Integration as it affects trade and economic growth of nations, this study will also analyse the same issue of integration in Africa and the AU in relation to the EU. The study will also review the argument that the AU is an adumbration of the EU and outlines why it hasn’t been able to reach the level of its mentor as yet. Following literatures and studies of regional economic integration, we highlight the main concepts of integration using the Viner’s model and outline challenges and failures of integration in Africa; but give insights on the probable causes and suggest solutions for the future.

1.5. Plan and Scope of Study The work that would be covered here will be based on the integration of the African region under the auspices of the African Union. The AU will be compared to the EU as the study will review the arguments of its actual

and a common market will be briefly discussed. With a study of six chapters, the plan of study shall be; Anthony Erihre Oneya MSc International Trade 2006

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structure and the components of Trade, customs union, free trade area, economic union

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Chapter One will introduce the basic outlines of the study. Chapter Two will give a Background study of the paper; Chapter Three to give a Comparative analysis of both regions Chapter Four and Five looks into impacts of REC’s on the regions, and relevant media and current discussions on Africa’s integration and views towards its achievements; Chapter Six will be the summary, recommendations and conclusions5 of study.

CHAPTER TWO BACKGROUND OF STUDY

5 Although the study recommends and concludes, it still leaves room for further research 6 Culled from: the Inter Press Service News Agency. Available from; IPS webpage http://ipsnews.net

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“It is no longer a debate about whether integration in Africa is desirable or not, but how far and fast we will achieve it”6 Mr. Tajudeen Abdul-Raheem Deputy Director of the United Nations Millennium Campaign

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

2.0 Regional Integration: Antecedence. 2.1 Introduction The none evolution of economic and regional integration has been described as the result of some functional logic and not that it has developed as a result of a natural economic laws propounded by the likes of Adam Smith and his concept of the ‘invisible hand’. Functional and economic determinism fail to explain both the setbacks to integration and its re-launches; clearly, economic integration still falters in its process supposedly following some scientific logic and possibly has been dependent upon some political and institutional dynamics. Even the EU as one of the most celebrated and successful regions on integration, has faced many bridges on its way to attain integration of every form. And the same may be said about one of the worlds developing regions – Africa. Here we briefly review the different historical stages the regions of Africa and Europe have been through on the way to attaining integration.

2.1.0 African (Regional) Integration The issue of regional integration in Africa has been a subject of debate for some time. Political leaders and progressive academics had over time provided various suggestions of how Africa should be unified. Unlike Europe, the struggle against slavery, colonialism and apartheid in Africa gave further impetus to the subject of regional integration. Africa’s obsession with regional integration can be traced to the pre-independence period, and as far back as the turn of the 20th century. The Southern African Customs Union (SACU), which was established in 1910, remains the oldest functioning manifestation of regional integration in the world. In Africa, one of the primary aims of regional integration was to promote development among African countries as well as help reduce indebtedness and dependence on

Pan-Africans like Presidents Nkwameh Nkrumah of Ghana and Julius Nyerere of Tanzania argued that the political and economic unity of African countries was the very essence of Anthony Erihre Oneya MSc International Trade 2006

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western countries.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

independence. The two leaders, who led their respective countries into independence and became their countries’ first post-colonial presidents, called for the formation of a supranational pan-African government as an expression of continental solidarity and policy coherence. These leaders identified the colonialists' strategy of divide and rule as a stumbling block to the unity and integration of the continent. The existence of 'unity blocks' such as the Casablanca Group and Monrovia Group in the 1950s demonstrated the tricky nature of attempting to develop a common political and development agenda in a deeply divided continent7. The concept of regional integration in Africa was at the early days championed by the Economic Commission for Africa (ECA) as its structure had proposed the division of Africa into regions for the purposes of economic development in the mid-1960s. The Economic Commission for Africa (ECA) initiative promoted the Lagos Plan launched in by the OAU as a special project towards African integration.

The creation of three regional

arrangements which were separate but convergent and over-arching, were setup aimed at developing integration in three sub-Saharan and sub-regions. Pre-dating the Lagos Plan, the West African region would be served by the Economic Community of West African States (ECOWAS).

Following that in 1981, a Preferential

Trade Area (PTA) was established to cover the countries of East and Southern Africa, which was eventually replaced in 1993 by the Common Market for Eastern and Southern Africa (COMESA). In Central Africa, the treaty of the Economic Community of Central African States (ECCAS) was approved in 1983 and if am right, still remains to be fully ratified. It’s been stated by the architects of this initiatives, that these arrangements were expected to lead to an all-African common market by the year 20258. The Abuja Treaty replaced the Lagos Plan in 1991, re-affirming the commitment of the O.A.U’s Heads of State to an integrated African economy.

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7 Adedeji, A. (2002) ‘History and Prospects for Regional Integration in Africa’, paper presented on 5th March at the African Development Forum III, held in Addis Ababa, Ethiopia. 8 Ibid.,

Anthony Erihre Oneya MSc International Trade 2006

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

The OAU operated under two legal instruments, which was its Charter and the Treaty of Abuja. This was therefore known as the OAU/AEC until the AU supplanted it in July 2002 at the 38th summit of the Organisation of African Unity. In April 2001, African Heads of State launched the African Union at Sirte (Libya) to replace the Organisation of African Unity (OAU). The formation of the Organisation of African Unity (OAU) in 1963 was regarded as a key achievement and a stepping stone towards realising unity in Africa. From the very first post-colonial meetings, African leaders emphasised regional integration as one of the key elements of a post-independence strategy. The idea of regional integration was regarded as a means through which African countries would 'pool their economic sovereignty' in order to improve the living standards of their peoples and to extend the struggle for political decolonisation into one for economic decolonisation. The Lagos Plan of Action (LPA)9 in the 1980s also advocated regional integration as central to the socio-economic development of the continent. For instance, member states' views were that setting-up infrastructure such as transport and communication facilities would facilitate the promotion of intra-and extra-African trade. African countries recognised that regional cooperation in areas such as developing regional institutions, capital markets and research institutes, tackling common environmental issues, controlling infectious diseases as well as preventing, managing, and resolving conflict which is important for Africa's growth and development path. In an increasingly integrated world, there was also a gradual realisation among African states that subregional and regional groupings provide higher visibility to global investors, promote cross-border trade and investment, and reduce production and marketing costs. since the days of the Lagos Plan of Action (LPA) many groups of integration arrangement has taken its form and has give way to the formations of RTAs which has eventually become associated with the former CFA of the francophone regions. These groups consist of the West African Economic and Monetary Union (WAEMU) which was form

Monetary Union of Central Africa (CEMAC) which was to come under the proposed ECCAS 9 Lagos Plan of Action for the Economic Development of Africa (1980-2000). The OAU Document.

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under the auspices of the ECOWAS and another that follows is the Economic and

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

region. Then adding to that is the area of the COMESA forming the Southern African Customs Union (SACU) and its association to the monetary union (also known as the Common Monetary Area, CMA), a region of the Southern African Development Community (SADC) and the East African Community (EAC). The African Union (AU) and the European Union (EU) arrangements share some apparent similarities of the institutional set-up. Almost similar to the EU, the African Union adopted a Constitutive Act in Togo10, which entered to force in May 2001. This Act comprises of 33 articles11; Article 5 of the Act outlines the organs of the AU which comprise of; an assembly of heads of states of the member-countries, executive councils where ministers meet, a commission, a parliament, or an advisory council which unites various social groups. Of the two Unions, the African region is roughly doubly as big as Europe’s with 53 countries on the African side (all except Morocco) and 27 in the EU (2007). 850 million people live in the African Union, in the EU only 483 million. And when it comes to the area, the African Union is a pygmy of the EU (30 as opposed to 4 million square kilometres). The Constitutive Act envisages three financial institutions, an African Investment Bank, an African Monetary Fund, and an African Central Bank. Founding an investment bank or a monetary fund could be done on an intergovernmental basis; after all, an almost worldwide scale the International Monetary Fund and the World Bank are institutions of this kind. But a Central Bank would imply an African Monetary Union, the achievement of which is an explicit aim of the AU, to be realised by 2028. As a matter of speaking, it was then envisaged that the African Economic Community (AEC) shall according to its proposed plans, comprise not only of a common currency, but also a customs union and a common African market. These features would indeed produce a break-through to a heavy dose of supranationalism, given the point that a common central bank or common customs policy would imply that the African countries, probably like the EU, transfer substantial parts of their sovereignty to common African institutions. But apart from stating these aims, no progress has so far been recorded or achieved. Although, on a 11 Articles forming the African Union (Considering the principles and objectives stated in the Charter of the Organization of African Unity and the Treaty establishing the African Economic Community)

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10 Constitutive Act of the African Union, OAU Doc. CAB/LEG/23.15, entered into force May 26, 2001.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

smaller scale of Sub-Regional integration in Africa, such as the ECOWAS and COMESA, the institution of a common currency has taken its form, also initiated and put into effective use, the four freedoms of Regional Integration that so elaborates the very nature of the EU. One main question can be asked as to what the basis of integration without the free movements of goods, services and persons is? Given that this freedoms form the essential structure of integration whether regional or global. For the EU, these freedoms as they are referred to, is said to form a major part of the substantive law of the European Institution for it is sometimes summarized in a compact term as the free flow of economic factors which are in pursuit of greater prosperity of the states and its citizens. These freedoms earlier referred to, are categorised in four different basic economic factors. They given as the; The free movement of goods; The free movement of services The freedom of establishment and; The free movement of persons, and includes also the free movements of workers and of capital. It is expected that the virtuous dynamics of the vast market will be attained by these outlined freedoms. The law of the Single Market in the EU is said to play a key role there by removing the barriers that Members of the Union might otherwise impose on trade originating with and in other Member States. As one of the key mechanisms to solving Africa’s problems, The New Partnership for Africa’s Development (NEPAD) was formed. This is one of Africa’s most recent initiatives looking towards the development of regional integration in the region and it is seen as probably, the most anticipated and fundamental way of bringing to an end Africa's from the malaise of underdevelopment and entry into a world of globalization.

between Africa and the developed countries so as to improve the continent’s

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According to the NEPAD framework document; "its objective is to bridge existing gaps

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

international competitiveness and to enable her to participate in the globalization process."12 At various points as it concerns Africa’s growth and development, the NEPAD document touches on many of the aims and motivations for cooperation and integration in the African region. It’s been otherwise observed that those basic African developmental reforms are affected by the size in population and per capita income of many member states of the region. It’s advised for the African region to pool together its resources of essential regional developments for the regions integration. Decisions taken by African countries to form the African Union (AU) and its social and economic recovery plan, NEPAD, recognises that after many decades of economic and political planning, Africa has not made much progress in the implementation of earlier development plans after years of the inception of the AU and the years of the OAU. With the overthrow of apartheid in South Africa, there was increasing realisation that something needed to be done to inject new spirit into African development programmes. The use of phrases such as the "African Renaissance", the "African Century" and the "Africa's time has arrived" are just some of the innovative ways used in an attempt to change the black and no-good perceptions about Africa. Past and previous documents, research and studies have shown the AU as an institution, is more structured to the relations and workings of the United Nations as in cases where Heads of governments or delegations meet and discuss and have all declared their firm intention to respect Human Rights and wherefore, a Security Council which can legitimately impose sanctions, armed intervention included, against member states in case of grave violations of basic principles. In any case, principles are formulated in rather general terms, and probably like the EU, there is no political sphere where the member states explicitly have given up national sovereignty. In both cases, general assemblies and Security Council may pass resolutions, but they

in court. At these, Both the UN and the AU are seen to be useful intergovernmental fora. 12The Abuja Document 2005. available online from; http//www.nepad.org.

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cannot pass legislation which binds the member states, and which the citizens could use

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

But their efficiency and their ability to impose their principles may very well be restricted13.

2.1.1 European (Regional) Integration The most emulated economic integration in the world was started when six governments moved by a hope for enduring peace in a prosperous Europe, in 1957 signed the Treaty of Rome establishing the European Community. The EC thus began its life as an agreement among independent nation-states. Forty years later, the European Community14 has developed into something more than a pact among governments. Moravcsik 1993 and Keohane 198415; relates the EC level of governance to one which operates as an international regime in the functional, transaction-costs mode as it can be seen as a passive structure that enhances the interstate bargaining. The structure of the European community/European Union can be seen from the level of a straight pole of politics. On one end, it’s seen as a "supranational"16 politics, and the other an intergovernmental politics. Following the end of the Second World War, the reconstruction of Europe was encouraged by the European recovery programme 17. The Schuman plan18 became the basis for the ECSC, which was established in April 1951 through the ratification of the treaty of Paris by France, Germany, Italy and the Benelux countries (Belgium, the Netherlands and Luxembourg). The ECSC aimed to integrate the markets of these states for the industrial resources necessary for reconstruction of Europe, and the production of weapons of war. The ECSC during the economic boom of reconstruction led to the creation of the European Economic Community (EEC) through the ratification of the treaties of Rome in March 13 Dr. Wolfgang Zank; a Comparative European View on African Integration – Why it has been much more difficult in Africa than in Europe? 14 Recognising the distinctions between the European community and the European Union becomes necessary as the EC was one of the early stage of the European Integration

.

16 The term supranational politics is used to emphasize that the EC is an International organisation and that the EC politics is a form of international politics. 17 known as the Marshall plan funded by the US. 18 created by Jean Monnet, presented by French foreign minister Robert Schuman

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15 Sweet, Alec Stone & Sandholtz Wayne. "European integration and supranational governance" Journal of European Public Policy 4.3 (1997). 25 Sep. 2007

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

1957 and this establishment, was a most significant development in supranational integration as the EEC treaty followed the supranational model already established, albeit in a moderated form.19 One of the important articles of this treaty as it concerns the future policies of integration in the region was Article 235.20 The importance of this Article was that it facilitated EC action beyond the immediate and primary provisions of the treaty. One of the primary motivations of the expansion of the ECSC into the EEC came from France. Under the treaty of Rome, two new organisations were created to complement the ECSC; the EEC and EURATOM (the European Atomic Energy Community). In contrast to the restricted scope of the Treaty of Paris, the EEC Treaty envisioned a common market within Europe based on the free movement of goods, services, capital and labour. These goals were to be achieved through the elimination of trade barriers between the member states. Importantly, the creation of the EEC demonstrates a significant deepening of the Community and at the same time, the rapid deepening of the EEC also instigated responses from non- member states. The ECSC comprised five institutions: •

The executive, known as the high authority (equivalent to the European Commission of today);

•

The Council of Ministers, comprising representatives of the member governments;

•

The Consultative Committee, consisting of representatives of employers/industry, trade unions, and consumers concerned with the ECSC’s activities;

•

The Assembly, composed of a total of sixty-eight delegates from the six national parliaments;

•

The European Court of Justice (ECJ).

All of the above institutions were located in Luxembourg explaining till this day, the reasons why that region is dominated with more EU services.

20 This Article states: ‘if action by the community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community and this treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the Assembly, take the appropriate measures’.

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19 Dinan, D. (1994), Ever Closer Union: An Introduction to the European Community (Basingstoke: Macmillan)

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

The ECSC retained its separate existence until implementation of the Merger Treaty in 196721. Including the UK, seven countries that were not members of the EEC joined together to create the European Free Trade Association (EFTA) in January 1960. Unlike the EEC, EFTA allowed members to conduct external trade policies independently, and excluded agricultural goods from its customs union. The UK’s membership in the community ensured the dominance of the EEC and had triggered applications from other UK trade partners and thus forced for a policy reform in order to facilitate successful future enlargements. The enlargements of more Communities into the EEC took place in 1973 with the inclusion of Denmark, Ireland and the United Kingdom and in the early 1980s, Greece, Spain and Portugal joined up with the first direct elections to the European Parliament taken place in 1979. Successive enlargements had profound effects on the character of the EC and on the direction of further integration. With the signing of the Schengen Agreement In 1985, a common policy on border controls was agreed allowing for abolition of systematic border controls between the participating countries of the European states. This was referred to as the Schengen Visa. The common policy agreement ensured the harmonisation of external border controls, and cross-border police co-operation.22 With more confidence in the integration of the EU, the Treaty of the European Union, TEU (also known as the Maastricht Treaty) was ratified in the 1990s serving for a slow paced integration process. The ratification of the TEU; this treaty was ambitious and created a revised foundation as •

It reconfigured the treaty around three pillars: the Economic Community (EC), Common Foreign and Security Policy (CFSP), and Justice and Home Affairs (JHA). It established EU citizenship.

21 Pinder, John. 2001. The European Union: A Very Short Introduction. Oxford, U.K.: Oxford University Press

22 Church, C., and Phinnemore, D. (1994), European Union and European Community (Hemel Hempstead: Harvester Wheatsheaf).

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•

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

•

It provided the framework for the completion of the single market through a single currency.

•

It expanded the role of the EU into areas that had traditionally been the preserve of national governments, such as social and monetary policy.

•

It increased the use of QMV, and introduced a new legislative procedure (codecision) that granted more power to the European Parliament – EP.

This was however many of the provisions of the TEU was opposed by the member states of Demark and the UK as they had traditionally been reluctant to delegate any additional sovereignty to the EC. Having withdrawn from the Spaak Committee23, the UK reappraised its policy relations to the EC, leaving for a committee to be setup in the framework of the OEEC to examine the creation of a European free trade area and under its report, the EC6 had suspicion of the undermining of their ambitious plans for a common market and a supranational political system been supervised. An additional round of enlargements had taken place in the 1980’s and pushed the borders of the EEC further south and west. The doubling of memberships had several political and economic consequences: it increased the influence of the EEC, it was said to have complicated the Institutions decision making process and altered the internal economic balance of the EEC. Subsequent enlargements were recorded with the facilitation of the European Economic Area (EEA) in May 1992, resulting to the addition of more member states including Austria, Sweden and Finland. More modest reforms were initiated to the Union by the emergence of the Amsterdam and Nice treaties as they reconfigured the EU institutions and policies while it prepared for future widening of the Union.24 The principle of the (EMU), economic and monetary union was discussed at a 1969 summit of the EEC leaders in The Hague and an agreement was reached towards the

coordinating national economic policies. 23 The Spaak Committee was a committee of intergovernmental representatives setup and chaired by the Belgian Paul-Henri Spaak. 24 Nugent, N. (1992), ‘The Deeping and Widening of the European Community’, Journal of Common Market Studies, 30/3: 311-28

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controlling of fluctuations in the value of their currencies and to make efforts to the

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

This

was abandoned

after the

international

monetary

turbulence25, which was

exacerbated in 1973 by the Arab-Israeli war and the global energy crisis. In 1979, a new initiative was launched, known as the EMS - the European Monetary System. Towards the end of the 1980’s, there was a widespread belief that the EMS had been successful beyond all expectations. For it had not only been successful in its proximate objective,26 but also viewed as having provided a framework for counterinflationary policies in Europe, through which other countries had, in effect, been able to import into their own systems the counter-inflationary success and reputation. Using an Exchange Rate mechanism (ERM) based around an accounting tool known as the European currency unit, this tool was designed to create a zone of monetary stability within which governments took action to keep their currencies as stable as possible and the EMS helped stabilize exchange rates. In the move from the ERM to EMU, countries necessarily lost its ability to use the deutschmark as their counter-inflationary anchor and with Germany involvement, the dominant currency of the system recorded stability27. This led to the setting up of the European System of Central Banks (ESCB) and with the creation of the European Central Bank (ECB) and its policies28. The ESCB is given one principal goal of monetary policy which of price stability. Even after the signing of the Single European Act (SEA), progress on opening up borders became variable, and there was no common European policy on immigration, visas and asylum. And with the signing of the Schengen Agreement in 1985, by the Benelux states, all border restrictions were removed. Except the UK and Ireland, along with Iceland and Norway, who did not join the ‘Schengenland’, all EU member states agreed to the terms, allowing the signatories to implement controls at any time and not all have actually introduced a truly free passport free travel, but its signature marked a substantial step towards the final removal of border controls. 25 This was as the United States President Nixon’s decision to take off the US off the Gold standards and which signalled the end of Bretton Woods system. 26 -that of stabilizing nominal exchange rates between participating economies.

Woods system.

28 The ECB is independent of national government and of the Commission. It is at the center of the ESCB, a system comprised of central banks which themselves are required to be independent.

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27 The context of the EMS was aimed to achieving price and economic stability in the European region and restrained its pegging of its individual currencies to the Bretton

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Without doubt, the number of the EU has grown considerably since its foundation, and despite its own recorded and unrecorded problems, a number of countries are queuing up to join29. However, these countries already have most of the benefits of access to the EU’s market through their membership of the European Economic Area (EEA) as this aims to reduce frontier barriers and allow the free movement of services, capital, and workers. The size of the EFTA countries, has restricted the EU to bringing them into the single market of the EEA as there is notably little to gain. In present times, the issue of an eastward enlargement of the EU presents fundamental challenges for the institution. Considering that not only are there major disparities in economic performances but some existing policies, notably the CAP-Common Agricultural Policy30, will require a major surgery in order to be viable in a pan-European EU. It is however believed by many, both economist and researchers that the EU agenda is still a workload and that European integration has certainly reached the end of its history. Economic integration is heavily dependent on legislation and the EU law remains one of the major structure of the European integration as it has over its inception been responsible or rather have played responsive roles towards it progress of regional integration. Its been recorded that EU law remains the first probably the only example of a supranational legal framework and that the European Court of Justice is constituted somewhat by a new legal order of international law. The European Court of Justice has used its mandate as interpreter of the treaty to shape the basic principles of the treaty, and therefore the political structure of the EU. In so doing, the court has substantially furthered European integration. Although the ECJ is assisted by the Court of first Instance, the ECJ does not formulate policy, but in line with provisions in the treaties31 for referrals, the ECJ's judgement on

29 Switzerland and Norway have decided against joining the EU; Iceland, because of fear for its fishing interest, and Liechtenstein are unlikely to apply.

production subsidies, health regulations etc.

31 The two main treaties which form the basis of EU law, are the Treaty of the European Community (also know as the Treaty of Rome) 1957, and the Treaty of the European Union (or the Maastricht treaty) 1992.

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30 The CAP of the European Union is a remarkably complex assembly of instruments and regulations covering trade controls, price support measures, income transfers,

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

matters relating to the interpretation and application of EC law are cumulatively of great importance to the operations of the EU. The ECJ differs from the International Court of Justice (ICJ) and the European Court of Human Rights (ECHR). EU members must accept the final decisions and judgement of the ECJ. They are given examples of cases that have changed the EU and judgements that have affected almost all areas of EU policy. These cases can be seen as follows; Cases facilitating the common market: a most prominent example of the ECJ case law furthering EU integration is the Cassis de Dijon case.32 Cases on Environmental Policy: most recently, ECJ case law has expanded environmental legislation beyond what was originally envisaged by EU legislators.33 Since its establishment in 1974, the European commission has become a very powerful body. Comprised of the fifteen heads of government, the fifteen foreign ministers, the Commission president and vice-president, it has had a hand in all the major EU decisions. These Decisions range from the creation of the EMS, agreements on the single market, supervisions of the SEA and TEU negotiations and most importantly decisions on enlargements. These enlargements have spanned from treaties to historic events recording from the 1973 since the treaty of Rome was signed in 1957.

The EU

enlargement process is facilitated by a given criteria referred to as the Copenhagen criteria.34 This accession would be agreed by the EU as a pre-accession strategy and conditions which requires a country to have a stable democracy, respect for human rights and the rule of law; a functioning market economy and most importantly during a given transitional time frame arrangements, attain a good policy. The population of the EU, at over 375 million, is greater than that of either the other major economies; the USA (265 million) and Japan (125 million) and has recorded a tremendous economic market in the World market economy.

32 Case 120/78, Rewe Zental AG vs Bundesmonopolverwaltung fur Branntwein (a.k.a Germany) (1979)).

34 Copenhagen criteria, defined at the 1993 Copenhagen European Council.

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33 In case 302/86, Commission vs Denmark (1989)

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It has shown a major benefit of economic growth through regional integration arrangements and has lead to income convergence. The European Union common currency, the Euro (referred to as the Euro zone) has become one of the major contending monetary instruments of foreign exchange in the global market. The EU in its diverse structure has 23 official and working languages: Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Irish, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish. German and French remains the most widely spoken language as a mother tongue of about 81 million people. English remains by far the most spoken foreign language, while German and French follow. We can see from the brief Historical overviews of both Regional Institutions that a little or no differences can be drawn from them both. But it is however necessary to note that even though they seem to be little different, one has risen to great heights than the other. Dr. K. Wolfgang in his paper presentation 35, on the view of African integration, refers to the European Union and the African Union, as both substantially indifferent in institutional

structures

as

he

terms

one

as

intergovernmental

and

the

other,

supranational arrangements.

2.1.2 Conceptual issues: Regional integration has generally been regarded as having plenty of opportunities such as expansion of trade, pooling resources for investment, enlarging local markets and contributing to economic concept of industrialisation. Integration is believed to be encumbered by the existence of weak states and political opposition to the idea of sharing sovereignty.

virtually all integration institutions are intergovernmental. 35 A Comparative European View on African Integration: by Dr. Wolfgang Zank Center for Comparative Integration Studies (CCIS). Working Paper No. 4

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Integration arrangements are essentially not marked by strong supranational bodies and

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

The past and present supporters of regional integration do regard this arrangement as a potent strategy for accelerated economic growth, poverty reduction and lessening of conflicts. It must be stressed however, that regional integration in Africa is fundamental, but not exclusively, economic. While there was always hope that regional integration would increase the economic bargaining power of African countries, it was also regarded as a political project of growth in the region, aimed at increasing states political influence ensuring peace and stability in the region. Since World War II, many efforts towards regional integration around the world have been attained and pursued with the European Union (EU) as one of the successful examples. In recent years the push for integration has gained tremendous momentum and in the past decade many regional integration arrangements have taken to form or expanded. Most countries now belong to at least one regional integration arrangement and Africa’s regional integration has followed a similar pattern. Regional economic integration is already attracting a lot of attention in the developing world, and recorded attempts are currently under-way to either revamp dormant regional groupings, to re-create weak groupings or to build new ones altogether. Many countries that are members of the WTO, at present are concluding Regional Trade Agreement (RTAs) around the world. “In the period 1948-1994, General Agreement on Tariffs and Trade (GATT) contacting parties notified 108 RTAs relating to trade in goods, of which 38 were enforced in the five years ending in 1994”36. Major integration movements have been instituted in almost every region in the continent. Some of the examples of global and regional integration include the European Union (EU), Association of South East Asian Nations (ASEAN), the European Free Trade Association (EFTA), European Economic Area (EEA), Central European Free Trade Association (CEFTA), North American Free Trade Agreement (NAFTA), South American

operation (APEC) and MERCOSUR. 36 (Cf. The African Development Report 2000)

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Free Trade Area (SAFTA), Andean Common Market (ANCOM), Asia Pacific Economic Co-

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

There have been several regional experiments in the African region since its break from the colonial ages; these experiments, now termed as blocs are given as follows such as the East African community (EAC), the Central African Federation (CAF), and the Southern African Customs Union (SACU). More regional groupings emerged after independence, the most prominent being the Economic Community of West African States (ECOWAS) created in 1975, and the West African Economic Community (WAEC) first inception in 1966 and later became the West African Economic and Monetary Union (WAEMU) in 1994. Following in the South of Africa, is the Southern African Development Coordination Conference (SADCC) created in 1980 and replaced by the Southern African Development Community (SADC) in 1992, and in the East is the Common Market for Eastern and Southern African States (COMESA). Globally, economic integration has taken various levels and assumed many forms and can be summarised into: •

Free Trade Area: members remove tariff and other barriers to international trade

among themselves and may establish its own trade policies with non-member countries. •

Customs Union: Members adopt free trade area policy and may adopt common

trade policies towards non-members. •

Common Market: Members establish a customs union policy and eliminate

barriers that restrict movement of factors of production among themselves. •

Economic Union: Members develop a common market policy and fully integrate

their economies by co-ordinating their economic policies. •

Political Union: Members incorporate both political and economic integration; the

union effectively transforms itself into one country. In this present day, there is no country in Africa that isn’t a member of at least one regional economic group. As reflected in the number of regional agreements both in the continent and world- wide, therefore, the issue continues to occupy a center-stage in the

There have been many recorded reasons and suggestion as to the causes for the lack of progress in regional integration efforts in Africa. Super eminent of these reasons, is the Anthony Erihre Oneya MSc International Trade 2006

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economic agenda of countries.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

obvious never changing unwillingness of governments to: surrender sovereignty of macroeconomic policy making to a regional authority; to face potential consumption costs that may arise by importing from a high cost member country; to accept unequal distribution of gains and losses that may follow an integration agreement, and possibly discontinue existing economic ties with non-members. Adding their views to the list, Johnson and Lyakurwa states that the “lack of a strong and sustained political commitment and macroeconomic instability”37, and among others, has hindered the progress of economic integration in Africa. Although African integration remains fast paced and with little or no success, a major concern and question remains; with aids from international organisations even the EU, will the region be able to reach its goals of integration and the dream of pan-Africanism?

2.1.3 Review of Relevant Literature: ‘A cornerstone of development is a state with a sound constitution that balances the interest of all its citizens, and that which separates powers of the judiciary and legislature from the executive’38. Many of the world’s greatest economy and governments have been built on this principle. The European Union as a single entity has remained factored upon principle such as this. In present days, the African Union is beginning to take steps towards its building of the dream of a unified continent, also upon these same principles. But there is no doubt to the question of unification in the region as the prominent issue is how to attain it. Like the EU and other nations that has embraced the idea of regionalism through multilateralism, the African region has tried many initiatives towards economic growth and like many, has come to embrace the same idea of Integration in the region as a way forward. According to Bhagwati (1970)39, stating Viner

and Meade’s theories, reviewing the

37 (Johnson, 1995, p. 213). Lyakurwa et al (1997, p. 176) 38 Quote by Prime Minister Tony Blair on the build of development structures of a nation. Culled from the Report of the Commission for Africa 39 Bhagwati, J. N. (1970). Trade-diverting customs unions and welfare improvement: a clarification. [Cambridge: M.I.T.].

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concept of Regional Integration arrangements have been the subject of a fair economic

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

analysis, beginning with seminal contributions to the issue of a customs union and today, both theoretical and quantitative work on regional integration arrangements have been newly inspired by the ever current resurgence of regionalism and the issues it poses for both advanced countries and the less developed and developing countries, and especially for the international community which has become concerned for a continued progress in international development and the global trading system. According to Keet (2002)40 some of the strategic aims and objectives of African unity are well detailed in various policy documents and debates. These include: •

The significant need to remove the artificial lines drawn across the continent by

the colonial powers that randomly cut across societies, ethnic groups and even families, and indifferent not only to common linguistic and cultural spheres, but also natural ecological zones and ecosystems, and pre-existing economic and political systems and relations on the ground in Africa. •

The greater economic potential and political advantages in joint external trade

strategies and more effective collective engagements in multilateral trade negotiations (such as with the EU over the Cotonou agreement) will also reduce the possibilities for outside agencies to play African countries off against each other. Also of importance is the potential pro-activeness of the formation of a larger and more effective negotiating bloc, with the verge to enter into strategic and tactical union of agreements with similar regional blocs and countries elsewhere in global world. It’s been recorded that possibly more than any other region in the world, Africa has a strong case for pursuing regional integration. Studies have been conducted by the Economic Commission for Africa (ECA) and even the World Bank; and have found that Africa is still the most sub-divided continent in the world with at least 165 borders divided by 51 countries41. Research has also shown that the average African country has the same economy of a typical American town of 60,000 people.

substantially improved the economic performance of the smaller countries in the region; 40 Keet, D. (2002). The New Partnership for Africa's Development: "unity and integration within Africa"? or "integration of Africa into the global economy"? 41 UN Regional Commissions Development Update 17th issue-July 2004

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The creation and structure of the Europe Union shows that regional integration has

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

like Belgium. These small European economies today register much higher productivity rates, are highly competitive, and command a more effective market share than the whole of sub-Saharan Africa. Concerning the pace and speed to which regional integration has evolved in the African region, Mr. Amoako gives his views. Up to now, he states, “Africa has pursued regional integration in an "ad hoc, evolutionary manner" that has at times been "maddeningly slow. But now we are moving to a much faster timetable."

He adds that African

governments must pay close attention to the sequence and consequences of their actions. "The decisions on pace should be ambitious, but the pace should be doable42."

2.2 African Integration? Is it imperative? “Africans strive for unity. They want the removal of borders and the removal of customs and any restrictions. They want one identity and they want to move freely across the African continent. They want to be strong in the face of Europe, Asia and America” Colonel Muammar Gaddafi – President of Libya.

What is the essence of integration? How has it built or improved the economies of nations, states or regions? This question undoubtedly has been answered with positivism over the years and may still hope to bring more positive results in the coming future. The European Union not only remains a definitive example of this great initiative, but also regions in North America and Asia even almost the global world economies are left with no choice but to embrace the concept of integration for a better economy and growing development. Africa, on the other hand has joined in and embraced this initiative. But of what benefit will this tool of development growth bring to the region?

42 Culled From Africa Recovery, Vol.15 #4, December 2001, page 12 (Interview with ECA Executive Secretary K.Y. Amoako)

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2.2.1. The drive behind its integration and evolution so far.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Even though the African region and particularly its Nations, have been members of the World Trade Organization (WTO) for many years, and the region still sees integration as the new and probably only tool for economic growth. Many protest groups have emerged to publicize the unfair advantage that the rich countries have over the poor ones in the WTO when it comes to setting trade regulations and rules. There has been great and collective momentum by Africans for a successful process of integration in the continent and their continual readiness to contribute greatly to energize further the different regional economic communities as a pillar to the building of a unified African – the African Union. The African region has fought to be heard by the global world in the last trade talks of the WTO and still strives towards its goals for a place in the trading world. Past and recent talks of the WTO are seen not to have been in favour of developing nations and regions (including Africa) and its fight against the concept of multilateralism continue to grow with time43. Regionalism has taken its form and has become a tool for the substitutive pact and direction for a better tomorrow for the African region from the economics of multilateralism. Africa like many regions has found its way through time and to a better initiative for economic growth with its acknowledgement of regional integration. It is not news that the push for free trade at the multilateral level continues to be a continues battle and more of a contentious issue, different regions and governments are seen to focus on alternative paths of achieving trade and liberalization with the hope of spurring a better level of production and export growth44. With its creation of the African Union, Africa has not been left behind the shutters of achieving global and liberal growth and this has led many countries in the region, to parley with other nations and regions, entering contractual preferential arrangements

43 DDA: “The Round for Africa” Statement to the Third African Union Conference of Ministers of Trade Cairo, 8 June 2005-more information from the WTO(www.wto.org/English/tratop_e/dda_e/dda_e.htm) and Europa(www.europa.eu/) web pages

44 Hazelwood, A. (1967) African Integration and Disintegration, Oxford University Press, Oxford.

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with them.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Researchers have followed the regions development, challenges and prospective future over the years and stated that regional integration may be Africa’s probable step towards economic growth and a place in a competitive global market. With many initiatives in place, the eradication of poverty and under development in the region is said to be sure or may even be a proven way forward. Africa’s embankment in the 1980’s for structural economic programs with the Bretton Woods institutions assistance has led the region to be characterized by low economic growth as a result of very low rates of domestic savings, lack of market openness and liberalization and endemic poverty and the region is said to have experienced declining shares in almost all sub-sectors of world trade. Observing analysts have stated that due to the present wave of globalization, countries in the region will have to integrate into the global markets and probably to integrate regionally as to facilitate a means of widening its integration into the global economy. It is therefore believed that a step like this would help the region first deal with its neighbours as partners to trade and development; it will also provide the countries with the adequate building steps for any negotiations at the WTO level.45 The African region has continued to take steps forward towards its regional integration process with the adoption of the NEPAD and developmental frameworks by the region which has attracted international agencies like the UN and other global bodies such as the G-8 industrial countries. The progress of regional integration in the region has been mixed across sectors of regional communities and it has continued to stride in areas of trade and internal trade, macroeconomic policy and convergence, communications and transport. Notably, many REC’s in the region have made identifiable progress in trade liberalization and facilitation. Progresses have been recorded in free movements of goods and services,

45 Alemayehu,G. and H, Kibret. (Jan 2002)

Regional Economic Integration in Africa: A Review of Problems and Prospects with a Case Study of COMESA. Oxford

University.

46 Obaseki, P. (2001) ‘Economic Development of West African States in the Context of Globalization’.

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infrastructure, and prominent to the ECOWAS, peace and security46.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

2.3 The Limits to Free movements of Integration and Enforcement Rules in the AU (its challenges) Africa undoubtedly faces many challenges today, and it must continue to struggle not to lose ground in the age of globalization. Since its independence from its colonial strong hold, the African region may have remained heavily dependent on foreign private investment and bilateral and multilateral assistance but its ever growing strength in diversity has and will continue to push for a better global economy. The region has faced so many levels of so called developmental goals towards economic self sufficiency and non reliance on western support. It has practiced many ideological forms of independent rule; from African capitalism to socialism, populism to AfroMarxism. But these ideologies have tended to mask huge economic weaknesses in the region. For over 50 years of independence from colonialism, there has been a great deal of change in Africa. African nations are represented in the international organizations and are beginning to develop increasingly effective regional and sub-regional political institutions. Here, we put light to the regions drive, challenges and evolution so far towards integration.

2.3.1 The African Union and Its Challenges. Africa's initial and early stages of frameworks for regional integration, such as the 1980 Lagos Plan of Action, undoubtedly, intended to emphasize a preponderant and prominent state role in the world economy. But evidently, but not naturally, it is clear that many African governments do lack the resources, whether financial or supportive and political credibility to effectively implement policies even within their own state borders. There have been claims that Africa within the challenge of globalisation faces some

development, the crisis of debt and trade issues, domestic and regional conflicts, and democracy and human rights. Anthony Erihre Oneya MSc International Trade 2006

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specific economic and politico challenges which includes; human security and

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

It was said that some were crippled by civil war or came into conflict with one or most of their immediate neighbours, disrupting progress toward necessary cooperation. Even though the African region strives to put a strong hold on economic unity among its regions and the world’s global economy, the region still records lack of improved intraAfrican integration on a more practical approach. Even at this stage of a possibly improved and fast paced integration, there are still problems relating to border free movements and a proper enforcement mechanism to integration. Despite its dismantling of tariffs, relative trade barriers, and commerce between African countries, integration is said not to have increased significantly. Some African countries still have a particular concern that lowering or eliminating tariffs on trade with their regional partners will deprive them of most of their important source of government and state revenue. However, many Africans still encounter constant problems in travelling or dealing with people in neighbouring African countries. Even the small-scale manufacturers are seen to have difficulty getting the necessary import or export licenses needed for trade. Here raises the question of an open market economy coming into play. Without any basic consensus to an open market economy, the integration among states in the region can or may not be possible. Consequently, many argue that a pan-African economy cannot work if a full open market and trade principles are not practised because essentially, many researchers have noticed that the African region may be inclined to the practise of different levels of government which could be seen to affect it democratic structure and any process of integration. However, many outside influences have stated concerns on these areas. For instance; the United States in particular has sought to help Africa integrate itself into the world economy. The African Growth and Opportunity Act47(AGOA), has been a significant step by both the

barriers for 33 African countries. To this effect, two-way trade increased 37 percent 47 The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000 as Title 1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.( www.agoa.gov)

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Clinton and Bush administrations. This act has encouraged exports and lowered trade

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

between 2004 and 2005 to a total of US$60 billion, and US imports from sub-Saharan Africa increased 44 percent, though it was largely due to oil imports.48 The levels of government authoritarianism in this region are seen to be practiced through the lines of both the capitalist and socialist lines of government. There is therefore no argument that African economic unification could either progress on capitalist lines, which is understood in the very wide frame of its definition or even along the lines of a socialist planned economy and not on both simultaneously. Evenly put to statement, the wide disparity of economic systems in Africa, ranging from models close to the market systems up to numerous examples of centrally-planned socialism, is said to create a new formidable obstacle to progress at African integration. On the issue of the movement of goods and services, Mr. Taingam Bekoutou, DirectorGeneral of Chad's Chamber of Commerce and Industry, once noted “that the domestic private sector has rarely been mentioned in African regional integration plans nor has it been consulted about the taxes imposed on African businesses”. Records have shown as related to border controls and business visas request in the region that African businessmen frequently need to wait 6-8 weeks to get visas to visit other African countries, while citizens of the UK or France can travel to many African countries and obtain a visa on arrival.49 This challenge may remain as tariff barriers still burden intra-African trade, but lowering or abolishing them is difficult because many governments as it has been observed do depend on the income from them. The region faces the problem of improvement of its trade internally as it must try to improve its basic infrastructures especially of transport in order to make goods cheaper to move. It’s been revealed for example; that today, Africa’s transport costs – local, national, or international – are today twice as high as those for a typical Asian country. As shipping a car from Japan to Abidjan costs US$1,500, whereas moving it from Abidjan to Addis

48 Our Common Interest-Report of the Commission for Africa (March 2005). www.commissionforafrica.org 49 Culled from; the UN-NADAF Final Review document. (Making African regional integration a reality) 50 Culled from; The Report of the Commission for Africa.

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Ababa costs US$5,000.50

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

With the increased placements of tariff barriers to trade among the country’s of the African region, the barriers are seen to hurt citizens of both the rich and poor nations. The intervals of these high points have however, been marked by serious back-tracking from the process of integration in the African region. In the case of trade liberalization and facilitation, the West African Economic and Monetary Union (WAEMU) and the Common Market for Eastern and Southern Africa (COMESA) have made some substantial progress with regards to the free movement of peoples, the Economic Community of West African States (ECOWAS) has made considerable strides with the issuance of an ECOWAS passport and even the encouragement of a monetary zone (cfa) for market exchange values in trade. The East African Community and the Southern Africa Development Community have progressed well in infrastructure development. In the area of peace and security, ECOWAS leads the rest of the regions. Other African regional economic communities have also attained the status of a customs union, as with the Southern African Customs Union. Like many regions in pursuance of regional growth in the global world economy, Africa faces it own challenges with its limits to the enforcements of its integration rules. One of the major challenges that the African Union faces however, as in other parts of the world, which has become a major stumbling block to its successful regional integration has been the great diversity of its countries sizes, its natural resources, levels of development and the regions connections to the global markets. In his presentation,51 Prof. Adedeji states that “excessively economist approach to integration was one of the reasons for Africa’s failure to integrate”. While African countries were attempting to achieve economic integration, he noted, some of them were at each others’ throat, a situation that was clearly averse to a meaningful integration. "How can you disagree politically and cooperate economically?" he further he states.

integration process, over concentration on the choice and structure of institutions instead 51 Adedeji, A. (2002) ‘History and Prospects for Regional Integration in Africa’, paper presented on 5 march at the African Development Forum III, held in Addis Ababa, Ethiopia.

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Absence of regional shared political vision, values and stability, lack of a people-centred

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

of focusing on the substantive issues, and proliferation of institutions with overlapping mandates and tasks.52 In order to shed some light on the formidable obstacles to African unification, we may start with a quote from a speech, which Julius Nyerere gave on 6 March, 1997 in Accra, on the occasion of the 40th anniversary of Ghana’s independence:53 “Prior to the independence of Tanganyika, I had been advocating that the East African countries should federate and then achieve independence as a single political unit. I had said publicly that I was willing to delay Tanganyika’s independence in order to enable all the three mainland countries to achieve their independence together as a single federated state. I made the suggestion because of my fear – proved correct by later events – that it would be very difficult to unite our countries if we let them achieve independence separately. Once you multiply national anthems, national flags and national passports, seats of the United Nations, and individuals entitled to a 21-gun salute, not to speak of a host of ministers, prime ministers and envoys, you would have a whole army of powerful people with vested interests in keeping Africa balkanised”. This problem highlighted by president Nyerere is not strange but a familiar one for students and researchers of European integration. To some extent, the challenges facing the African Union can be compared to superimposing an EU-style overlay on top of feudal Europe rather than the modern European nation-states. It has been seen over time, how instructive and increasingly difficult decision-making has become in the EU as it widens its membership. The challenge that the AU, then, faces is how to forge consensus or even a two-thirds majority on important progressive, developmental and substantive issues in the region. AU members have been said to withdraw from the Union because of frustration with inaction of decisions.

negatively. Many regional institutions have become dormant and weak for many reasons 52 Cf: African Development Forum III (ADFIII plenary session)5 March 2002 (Speeches and Presentations) 53 Nyerere, Julius, ’Without unity, there is no future for Africa’, New African, February 2006, pp. 20-23, esp. p. 22.

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In common thinking, any withdrawal of membership from the AU will likely be viewed

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

but in the case of Africa, due to several regional pacts which have been dominated by hegemonic local authority, there has been reluctance by smaller states to cede their sovereignty to any multinational grouping. Obstacles to regional integration in Africa over time have been well recorded. As previously stated, among them is the issue of trust among members. According to (L. Winters ;) “One very important lesson that the AU will have to draw from the EU's experience is that integration requires mutual trust and confidence between partners as well as a perception that their interests in various issues are compatible”. 54 Further adding, the lack of commitment to regionalism in Africa is seen to have manifested in member countries developing strategies, plans and priorities quite independently. An example of this ‘phenomenon’ is the EU/SA Free Trade Agreement (FTA). The South African region signed an agreement knowing that it would have a devastating impact on both the members of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC) and by acting independent of other regional countries, South Africa was trying to maximise benefits for itself at the expense of its regional members. The persistence of colonial legacy however, has also prevented Africa from the creation of a strong position on regional cooperation and particularly the combination of some factors such as local nationalism, ethnic conflicts and language barrier, have contributed to the difficulty of integration. For example, in the West African region, the inability of the Anglophone and Francophone countries to break their colonial heritages and form effective and substantive economic groupings which will cut across their regions, have become one of the key obstacles to successful integration in the African region. In his presentation at the ADF III meetings 55, ECA Executive Secretary, Mr. K. Y. Amoako, analyzes the conquest and challenges of African regionalisation stating that “Africa's

54 Winters, L. A. 1996. "Regionalism versus Multilateralism", paper prepared for a CEPR conference on Regional Integration, La Coruna, Spain, 26-27 April

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55 Accelerating the Pace of Regional Integration in Africa . The Challenges Ahead (by K. Y. Amoako, Executive Secretary of ECA 4 March 2002)

Anthony Erihre Oneya MSc International Trade 2006

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current system is too complex, too duplicative, and requires too much political energy and money for what is being produced”. Referring to the ARIA report, he recommends, the system should be rationalized. He further states; “We can all recognize that efforts to rationalize the current plethora of integration institutions will not succeed, unless there is solid political backing”. Within Africa, a range of sub-regional organisations has developed in response to different and specific challenges. These organisations or blocs as they are commonly known, include the SADC, ECOWAS, EAC, IGAD, AMU etc. In addition, international organisations, especially the United Nations, have taken on larger and more complex mandates as it relates to the developments of these institutions or organisations. Essentially, one of the major challenges facing the AU will be how now in present times of multilateralism, to relate to these other organisations and given that the future relationship between the regions and the AU has not been completely sorted out as yet. Human resource requirements and infrastructure factors for the AU remains a problem as one of its challenges is the expert task of actually designing the institutions and the management system required to maintain its structure. The provisions envisaged for seeking technical assistance in building the necessary institutions, remains an issue. Recommendations have however been made that necessary structures be put in place to build systems and staffs in local and national governments, and also in pan-African and regional organisations particularly, the African Union and its NEPAD programme. Concerning infrastructure, the presence of customs barriers provide disincentives for the development of regional infrastructure and physical infrastructure. The building of a regional organisation is largely seen as a complex task even in a region where many see it as a potential for great reforms and possible economic growth. The African region has had its defining moments and there may be relatively few

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expertises drawn from its new reforms of integration even when it is guided by a blue

Anthony Erihre Oneya MSc International Trade 2006

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print of the EU or even a proper outline of integration principles 56. However, there is the experience both within Africa at sub-regional level and outside Africa that maybe utilised. At this level, many have argued that the concept of sub-regional integration may be a better form of growth and development as it relates to regional integration of the African region. Adding to its challenges, it’s been said that the AU lacks major skills required for managing the institution and essential training programmes to ensure a proper running and maintenance of structural reforms of its units and the challenge of basic and essential manpower to manage its institutional goals. As earlier stated above, one primary challenge for the region is the issue of intra-African trade barriers and this continues to hinder regional integration processes on the African continent and the lack of free movement of people and goods in various regions is said to continually slow down integration. And one major problem of the region is its lack of improvement in the level of economic integration within its continents regional economic communities. However recent developments have shown that the AU commission is dedicated to taking measures that will lead to expeditious elimination of inter-REC and intra-REC trade barriers with the improvements and effective participation of the regional economic communities of the African region57. A democratic requirement remains an essential structure to the building and maintenance of regional integration for any nation, state or region. This remains a problem for the African region for as long as the conditions of reaching a democratic structure for any state of the region becomes a problem, and conditions of widespread harsh deviations from democratic standards in many countries are not altered substantially, any attempt to construct an African Union along the lines of the EU, becomes excluded58.

56 European Union probably remains the best example of regional agreement that has achieved the same ideals that African integration aspires to.

blocs, some regions may need to be permitted to experiment with its own institutional design.

58 Keller, Edmond J. Harvard international Review. Summer 2007, Vol. 29 Issue 2, p46-51, 6p

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57 Noting however, that if the AU Constitutive Act of the Abuja Treaty remains the guiding light for African integration with the regional economic communities as building

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

One major challenge that will not be over looked in this paper is that of domestic and regional conflict in the African region. We have to face the fact that one major difficulty of achieving a proper and improved level of integration and sustainable economic development is undoubtedly compounded by the presence of persistent conflict in the African region. The African region in the past and present decade has witnessed increasing incidents of intense conflicts in the continent. With the African union and the United Nations along with other aid agencies spending time trying to find ways of maintaining peace in the region. At the last AU summit in Ghana, many including Africa’s Bishop Desmond Tutu, have expressed their opinions on the suspension of the talks for a united region and pay more attention to the uprising conflicts in the regions of the continent.59

CHAPTER THREE

3.0 Introduction 59 Archbishop Tutu’s Letter to the African Union Summit holding in Addis Ababa 29 to 30 January 2007

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COMPARATIVE ANALYSIS

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Comparing both regions has only become necessary because there have been arguments that the African Union has been structured along the line with the European Union. But these arguments continue to get challenged as the African region continues to strive towards development through integration. Many claim that some countries of the region has done well in its different capacity of its nation’s economy through the joining of different regional blocs in the region and others claim that a unified state might be the only way out of managing the region’s economy accordingly and particularly the ability of African countries to gather as to what economist would refer to as the fundamentals of economy.

3.1 Comparison of the AU and EU It is clear that the African union is seen to have ambitions of its own. With a Pan-African outlook and proposals for a United States of Africa, and the pursuance to be a great regional integration bloc among the greatest of economies, has the AU really taken to the direction of one of the world’s largest regional blocs? Or does it like the OAU, its predecessor, still show some initiative of common interest among member states with a better economy in the African regions? This chapter will however compare the EU and the AU but will hope to argue that even though both institutions may have been built on a similar background, the AU may yet still pursue its goals resembling one of integrations greatest initiative but attain many different forms of an International institutional body. Further on, although both may be seen as similar on the comparative basis, this paper will still argue that both institutions may differ a long way on. The tables below give an economic comparison of the EU and AU and the annual growth rate of both institutions. These reports shown in the tables were as to the relative basis of the Commission for Africa Report and the G8 and Millennium Review Summits and the 2005 UN Millennium Development Goals (MDGs)60 towards a partnership for economic in

60 The Eight Millennium Development Goals of the UN for Africa.

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the

region Page75

development

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

(Note: Table 2 Annual Average Growth Rates for the AU and EU areas)61 The AU is at least seen as an institutional set up and probably strikes a remarkable resemblance to that of the European Union (EU). Many observers have, otherwise, compared the AU to the EU as it is believed that the architects of the AU relied on the EU template for its creation. The architects and fathers of the African Union, no doubt sought a blueprint inspired by the strongest and most effective model of regional unification that exist. – The European Union. According to Dr. Babarinde;62 in his presentation at the Plenary Session of the ECSAWorld Conference, on the future and workings of the African Union, he states that; “The

very high population growth rate in Africa and doubling every 30 years.

62 Analyzing the Proposed African Economic Community: Lessons from the Experience of the European Union. by Olufemi A. Babarinde

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61 World Bank, World Development Indicators. Although GDP growth within the AU area has been greater than that of the EU area, a good deal of this is explained by the

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

AU will have to chart its own course, travel at its own pace, find its own rhythm, and write its own history”. The African Union (AU), although, still in a formative state, has already officially designated for itself, am emblem, a flag, a central bank and a unified continental military force. The AU with its African Central Bank plans towards the creation of a single African single currency. International Organisations, such as the United Nations has over the years, supported the African union as a major solution for the wars, poverty, famine, and disease which have affected the continent for decades. The African Union is seen essentially as intergovernmental in character and the European Union, as supranational in arrangement and probably on its way to becoming a Federation. The

EU’s

resulting

and

continuum

measures

towards

the

movement

from

intergovernmental to supranational governance may be traced to its starting point of the Treaty of Rome in Article 23663 as it permits the EC to establish supranational governance to achieve the general objectives of the Community. On the scale of intergovernmental versus supranational, when measured, against the structure of the African Union, its numerous Regional Economic Communities at the subcontinental level, fall into the category of intergovernmentalism as all member countries of the AU have retained their full legal sovereignty as compared to the EU. There is no instance where the African states have explicitly transferred national sovereignty to an AU level. The parliament of the AU is seen as purely advisory and has no competences to make laws for the continent. Nor can the commission make any decisions which bind the member states. All 53 members of the AU have adhered to the development strategy of the New Partnership for Africa’s Development (NEPAD) which officially became recognised as an AU initiative. The African Peer Review Mechanism

63 The Government of any Member State or the Commission may submit to the Council proposals for the amendment of this Treaty. If the Council, after consulting the Assembly [European Parliament] and, where appropriate, the Commission, delivers an opinion in favour of calling a conference of

accord the amendments to be made to this Treaty. The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutional requirements. available online from; (http://europa.eu/scadplus/treaties/eec_en.htm)

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representatives of the Governments of the Member States, the conference shall be convened by the President of the Council for the purpose of determining by common

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

(APRM), being a part of NEPAD, will make the governance of African countries subject to official scrutiny or perhaps the most innovative part of the African reform initiatives. In the future, the reviews of the African Peer Review Mechanism may well produce real political results, given the point that public criticism coming from Africans might have an impact on public opinion. But also they have no legally-binding character. Besides, although NEPAD and APRM were declared to be AU initiatives, participation is voluntary and a row of member states have opted out. There are perhaps some elements of the AU construction which might have some supranational potential. An example is Article 4(h) of the Constitutive Act which proclaims a right of the African Union to intervene in cases of war crimes, genocide and crimes against humanity64; as this remains an important political declaration of the Union. Another element of potential supranationalism may be seen in Article 23(2) which states that member states who fail to comply with AU decisions “may be subjected to other sanctions, such as the denial of transport and communication links with other Member States, and other measures of a political and economic nature to be determined by the Assembly”65. An example is seen when Mauritania’s membership of the AU became suspended after a military coup, which violated the principle that changes of government have to happen in a constitutional way. But also this sanction mechanism does not create rights for the citizens. It is more of a political declaration whereby African leaders can declare that their actions against other African countries can be seen as legitimate. However, the Constitutive Act66 of the Union is more ambiguous about the Assembly, of the heads of states and its governments other than a legislative process of the Union and its Assembly. For the EU, the general course of European integration which sets the broad objective of EU law is largely dictated by decisions made in the European Council as its law is in turn

64 Article 4(h) of the AU Constitutive Act. (The right of the Union to intervene in a Member State pursuant to a decision of the Assembly in respect of grave circumstances,

65 Article 23(2) of the Constitutive Act of the African Union

66 In this instance, it is instructive to note that many of the articles of the Constitutive Act were transferred from the 1991 Abuja Treaty that launched the AEC.

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namely war crimes, genocide and crimes against humanity)

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

a product of the Commission, the Parliament and its Council of Ministers. The first two bodies are supranational in nature. Indeed the European Integration has in all ways improved and affected the decision making and workings of its parliaments; unlike the African integration where the decisions are only relative to the guidelines of the constitutive act of the African union. The Constitutive Act of the AU, however, may outline its laws to constitute the basis of its integration among member states but how effective can these laws improve the informative, authoritative and regulatory activity levels of its legislations among member states will in time, become an issue for an improved mechanism towards proper integration if to be compared to the EU. The AU’s “Assembly of Heads of State and Government” is at any rate, comparable to the EU’s European Council, while the “Executive Council” of the AU is in correspondence in certain respect to the Council of Ministers, especially the General Affairs Council. Same also in similarity is of the Committee of Permanent Representatives (COREPER) in the AU which is the Permanent Representatives Committee, and that for the Economic and Social Committee (ECOSOC) in the AU is ECOSOCC. Other institutions of the AU and EU that share analogy are the Commission, the Court of Justice, and the Parliament. The AU’s Specialized Technical Committees might only be somewhat similar to the EU’s COREPER I. Although the AU has for itself, a pan-African Parliament and the African Court of Justice (ACJ), these structures lack power and still have not become effective structures of the institution. On this issue, having had the opportunity to have observed a sitting at the EU parliament in Brussels, undoubtedly the decisions and effectiveness of the EU’s policies and successive growth lies essentially with the effective decisions of its parliament. Indeed, European Integration has always improved and affected by the decision makings of the parliament unlike the African integration where decisions are only relative to the

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guidelines set by the Constitutive Act of the African Union.

Anthony Erihre Oneya MSc International Trade 2006

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Basically, most have argued that the African Union replicates many characteristics of the United Nations; as it’s decision making systems and nature of its votes are seemingly alike and may not actually be termed as an institution following the EU blue-print. In both cases, like the UN, the Heads of Governments or Delegations meet up to discuss on issues and deliberations are reached with decisions taken; at least immediately without any legislative precedence and as any International organisation would, they all have declared their firm intention to respect Human Rights. The Security Council can legitimately impose sanctions and include armed interventions, against member states in case of grave violations of basic principles. But principles are formulated in rather general terms, and there is no political sphere where the member states explicitly have given up national sovereignty. In both cases the General Assemblies and Security Council’s may pass resolutions, but cannot pass legislation which binds the member states, and effective use for its citizen in courts. At these, it’s seen that both the UN and the AU are useful intergovernmental fora. But their efficiency and their ability to impose their principles may very well be restricted. Probably following the blue-print of the EU, it’s be observed that the AU and the EU may have been inspired by almost the same goals given an example that both Unions hope to use regional integration to promote peace, stimulate economic growth, achieve solidarity for their peoples, and strengthen their international profile and statue. On the issue of wars in both continents, the EU in particular was necessitated, in the hopes that rapprochement between France and Germany would help to preserve tranquillity in Europe, following which economic integration would be possible. And as for the AU, Africa has had its share of violent civil and inter-state wars even though she still faces her different wars and upraising till this day. The EU has used the concept of regional integration to preserve peace using it as an increasingly interdependent economic structure; the AU also needs regional integration as a vehicle for promoting pan-African peace, in order to enhance the prospects for

Somewhat like the European Union and the concept of the Euro, the Constitutive Act of the AU envisages three financial institutions, an African Investment Bank, an African Anthony Erihre Oneya MSc International Trade 2006

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positive economic results.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Monetary Fund, and an African Central Bank. And the founding an investment bank or a monetary fund is seen to be done on an intergovernmental basis and given that the creation of a Central Bank would imply an African Monetary Union, the achievement of which is an explicit aim of the AU, to be realised by 2028. The envisaged African Economic Community it’s been said shall comprise not only of a common currency, but also a customs union and a common African market. These features however, would indeed produce a break-through to a heavy dose of supranationalism, given the point that a common central bank or common customs policy would imply that the African countries transfer substantial parts of their sovereignty to common African institutions. But these remain farfetched as yet but a hope for the future if the African region. In comparison, the European Union contains both intergovernmental and supranational characteristics and since its signing of the Treaty of Maastricht in 1993, the European Union has consisted of a supranational “pillar” one which contains the fields were integration has gone furthest, and the intergovernmental pillars, dealing with foreign and home affairs given way to governments of member states to retain its sovereignty. Given, the EU's institutional arrangements, there is no doubt that the AU has learnt and has some important lessons still to learn. Even the initiative of the African Peer Review Mechanism in the AU is designed along the lines of Growth and Stability Pact within the EU. Both institutions are designed to ensure accountability, good governance and ethical administration. They are however, designed to provide strategic direction and coordination of tactical processes. Essentially, a high level of institutional capacity and investment of human resources in research, negotiation and monitoring has been important to the success of the EU. However, given the current resource and capacity challenges facing the AU, it remains to be seen whether institutions modelled along the lines of the EU will be appropriate for Africa's specific conditions.

it will be difficult for a continent like Africa, more less, the AU to seek to emulate the EU's institutional model without seeking to make drastic amendments to itself. Anthony Erihre Oneya MSc International Trade 2006

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The building of the EU is quite expensive and demands as such and it is clearly seen that

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

The AU will have to consider prioritising what is workable under its current conditions of under-development, unfair terms of trade, poverty, diseases, wars and instability67. Comparing further, unlike the African Union which counted its 53 members from its inception, or (the OAU of 1963) which organised all independent African states at that time, in the EU, there were only six countries68 to start the process of European integration in 1951, when establishing the European Coal and Steel Community. Thereby, on a very limited field, the states transferred sovereignty to a supranational body. Enlarging this scheme to a European Economic Community in 1957, there were still only these six countries participating. Successive rounds of enlargement have increased the number of members to more than 27 by now, and there are more to come. The issue of monetary policy has become a supranational arrangement in the growing developments of regional integration, in the form of the EMU and against many dire warnings, the arrangements of the EMU have proven stable and brought monetary stability, the abolition of exchange-rate volatility and, perhaps most importantly, very low long-term interest rates. Although, on a sub-regional level, these monetary policies such as the WAEMU and the SADC, have become of great essence to the free movement of goods and services and trade, as had been earlier stated, and Africa looks towards the same (single unified)monetary initiative hopefully in the near future. Notably, Languages and Mother tongues has always been a barrier to communication for integration. In the European Union, these barrier seem be overcome as many its nations, are mainly French German and Dutch and French undoubtedly has become the essential language in the EU. In Africa, however, the issue is different as major communications are directed by the Constitutive Act and languages in the AU are in English, French and Portuguese69.

67 Dr. Wolfgang Zank: A Comparative European View on African Integration – Why it has been much more difficult in Africa than in Europe, 28 pp, 2007.

68 Belgium, France, (West-) Germany, Italy, Luxemburg, and the Netherlands.

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69 Article 25 of the Constitutive Act under languages states “The working languages of the Union and all its institutions shall be, if possible, African languages, Arabic, English, French and Portuguese”.

Anthony Erihre Oneya MSc International Trade 2006

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

But still, nations in the AU still remain diverse and with many languages. Especially, in the West African region as she somehow seems to have an advantage over other regional zones which must manage the integration process with a great number of languages. For example, in the Nigerian Country of West Africa, they are over 250 languages. As for the European Union, it officially recognizes 21 languages which are used at its high-level meetings of Ministers, Heads of Government, in all sessions of Parliament and, which all official texts are translated. Even though European staff members work every day mainly in English and French, European multilingualism generates huge costs and makes procedures cumbersome. However, this comparison may not be sufficient, still, the 21 European languages are mother tongues for all the citizens of the union and any citizen or representative of the people has the right to express or communicate with the European institutions in their mother tongue. In West Africa, English, French and Portuguese are used as mother tongues only by its elites and the regional level fully reflects the national practices in which the colonial language is considered, de facto or de jure, as an official language. Nevertheless, all West African countries in the African region have adopted policies and attitudes that are favourable to national languages. Irrespective of whether they are adopted or not by the law, these languages are very frequently used, at least orally, in courts, political bodies and governments. In other words, rightly put by an anonymous, ‘national construction is not to the detriment of local specificities’. Taking into account African languages in the integration process is not a problem at the institutional level; evidently keeping to the current three official languages is preferred. On the other hand, the issue needs to be considered from a more concrete and operational angle.

aspects of public life. It is only by doing this that we will make our Regional Economic Communities real instruments of African integration, and the African Union a reality Anthony Erihre Oneya MSc International Trade 2006

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“It is high time for our continent to make African languages the working languages in all

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

experienced by the people, who will be rehabilitated and re-established in their identity and in the historical and cultural continuity of their areas. Consequently, common crossborder languages will strengthen exchange relations between the populations, beyond political borders, which should be considered, as we have always said, not as points of rupture but rather as suture points and lines of the African socio-cultural fabric, ripped and torn only 116 years ago, the suture lines of these border countries and villages of our continent in quest of unity.”70 This exhortation by President Konaré of Mali, Chairperson of the Commission of the African Union, reminds us that trans-national ethno linguistic areas are tangible realities which could fearlessly support the African regional integration process. There is a strong common awareness that the EU member countries are interdependent, and that on many fields only common solution are possible. This is not the case to the same effect in Africa. As regards to the EU, a heavy and constantly increasing dose of supranationalism have also been witnessed in fields where the member states are still sovereign and be observed with a growing coherence. Cooperation within the EU is thereby much more compact, much denser and much more obliging than among the members of the African Union. In fact, the African Union is said to be more akin to the United Nations than to the EU and some believe the institution, while on paper resembling the EU, is politically more sympathetic to the ASEAN model which is based on governments whose immediate priority is to preserve their national sovereignty, not to pool it. It is no wonder that in recent times, the Chinese have found trade discussions more relaxing in the African region. It may be ascertained that the differences between AU and EU are no coincidence given that efforts at integration have faced substantial obstacles in the different regions. In the case of Africa, these obstacles have been much more difficult to surmount than in

African unification are currently better than ever before. 70 Alfa Oumar Konare, Former President of the Republic of Mali.

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Europe and it is optimistic to say therefore that the conditions for further progress at

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Clearly, there is a strong common awareness that the EU member countries are interdependent, and that on many fields only common solution are possible; and this however, is not the case to the same effect in Africa. The Abuja Treaty which formed the African Economic Community was the major step and new chapter towards African Integration. Over time, The AEC has strengthened through the tides and today forms the economic wing of the African Union and relies on the pillars that symbolize the following regional economic communities (RECs): •

Economic Community of West African States (ECOWAS);

•

The Common Market of East and Southern Africa (COMESA)

•

The Communauté economque des Etat de L’Afrique Centale (CEEAC);

•

The Arab Maghreb Union (AMU);

•

The Intergovernmental Authority for Development (IGAD);

•

The Southern Africa Development Community (SADC);

•

The Communauté des Etats Sahelo-Sahariens (CEN-SAD) ; and

•

The East African Community (EAC).

3.2 Africa’s phases of integration; towards the EU blue print. Many have stated their cautiousness about the creation of an AU government; others believe it is the key to helping Africa to its problems of poverty and under-development. And also, there have been arguments to if the formations of different regional blocs in the region should remain and be the only force that drives African integration towards an improved economy and may be the most realistic way to foster African unity. But other still find faults to this, as even with the regional economic communities in place for regions like Western Africa, there still remain a lot of obstacles among states in the region. There has been also a series of major arguments that the process and nature of regional

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integration in the African Union may not have actually been inclined to the blue print of the European Union. Anthony Erihre Oneya MSc International Trade 2006

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

But for the essence of further arguments to the basic principles of the challenges and prospects of the future of integration in the African region, we outline the many phase’s of integration in the region as a probable inclination to the EU’s blue-print. In recent AU meetings, there has been a call for the full and immediate unification of the African region and a possible formation of a ‘United States of Africa’ by many, including presidents and economic reformists of the region. In his words, at the last AU summit in Ghana, AU commission chairman, Alpha Oumar Konare states that “Africa needs to take the bull by the horns and move towards a new country-Africa”.71 It has been said that, like Dr. Kwame Nkrumah, Colonel Muammar Gaddafi of Libya is one that champions the idea of a unified Africa through integration and has had a long enthusiastic proponent of the idea. Although, the basis of the comparison above may have been necessary, understanding that the initiative for an African Union might have been inspired by the blue print of the EU according to integration analysts, yet Africa faces so many obstacles towards integration and this has led to the creation and formation of many structural initiatives to remain in line with the blue print of the EU. Africa undoubtedly has moved from one phase to the other to ensure a successful blue print for a proper integration in the region and its integration has changed over the years from the AEC and the OAU to what is now the latest of the Pan-African dream of unity which is seen as the most successful of them yet - The African Union. A typical comparison, we have seen above given every possible avenue to believe that the AU is definitely, in lame mans term, a photocopy of the EU. But this institution of economic integration continues to face different drawbacks in restructuring of policies, initiatives, institutions and possible referendums. Adding to the new prospect of African integration in the AU and integrating organisations in the region, under the Constitutive Act, the African Heads of State and Government of

Programme. 71 The Annual Summit of the AU in Ghana (July 2007).

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the AU adopted the New Economic Partnership for Africa’s Development (NEPAD)

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

For Africa, this initiative, is said to bring a renewed investment to the region and end the continent’s marginalization and reintegrate Africa into the globalize world (Schmidt, 2003). The NEPAD is an African Union Programme designed by Africans for Africans and intended to provide Africa with the opportunity to extricate itself once and for all, from the scourge of underdevelopment. This African Union programme, is the outcome of the merger between the OMEGA Plan (initiated by Senegal) and the Millennium Partnership for the African Recovery Programme (MAP), initiated by South Africa and is based on three fundamental pillars: - The region as the application implementation space, - The private sector (African and international), and - Private and public good governance. NEPAD can be interpreted as a comprehensive program addressing most of the impediments to Africa’s development and one of the groundbreaking initiatives of the NEPAD is the African Peer Review Mechanism (APRM)72. The APRM aims at fostering the adoption of policies, standards, and practices that lead to high economic growth, sustainable development, and accelerated sub-regional and continental economic integration through sharing of experiences and reinforcement of successful and best practices, including identifying deficiencies and assessing the needs of capacity building. The concept of a peer review has a long history and is practiced by other international organizations, for example, the OECD (see Pagani, 2002)73. One aspect of the EU model that has however, not been followed in Africa, is the centrality of elections and democratic referenda to approve countries’ accession to the Union and its key components. Though similar in comparisons, there still remains little important difference between the

72 The African Peer Review Mechanism (APRM) is an instrument voluntarily acceded to by Member States of the African Union as an African self-monitoring mechanism. (Cf:www.nepad.org)

73 See his comments on The African Peer Review Mechanism (APRM) Occasional Paper No 64 - November 2002

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EU and the AU as related to above; In the AU every country on the African continent is

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welcome to join, although many its countries are in a dilemma between democracy and autocratic rule, regardless of its constitutional characteristics and has the advantage that an impressive number of 53 states may enter the list. But this constitutes also a substantial weakness because there is no consensus as to its basic constitutional principles. In all cases in which European countries joined the EU and its precursors, or adopted the single currency, the issue was either a major theme of a democratic multi-party election, or a referendum, or both. The weakness of this democratic component in the AU process is an important issue may warrant attention. Comparing both regions has become very interesting and educational as learning the basic strengths of the institutions have proved necessary but it is good to look at one essential part of these comparisons which is funding. Funding of these institutions is necessary as to maintain its planned goals and development policies. In Africa, the Commission of the African Union highlighted the fact that the Organization of African Unity (OAU) largely depended on statutory contributions of the Member States for financing its activities which, for the most part, were administrative functions. However, the creation of the African Union increased its operational requirements, making it imperative to identify that other additional financial resources were needed not only to operate the various organs of the Union, but also to implement its continental programmes and section of projects as contained in its strategic plan for 2004-2007 of the Union. Several financing sources had since been proposed including those by propositions of import levies, as well as a tax on insurance; the proposal on the Pan-African Resource Solidarity by the African Organization of Civil Societies, and other financing sources like the popular mobilization of financial resources and mobilization of resources through the

The establishment of a trust fund financed by the private sector and financing by the African Investment Bank is soon to be created and put consideration. Anthony Erihre Oneya MSc International Trade 2006

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private sector.

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Given that the idea of a value added tax was not considered by African integration experts initially, due to non-harmonization of tax legislations in Africa. Therefore, it is seen that Africa (the AU) may be far from been compared to the growing nature of the EU when it comes to the basis of institutional funding. The EU has developed over the years and has grown from funding itself to the providing of funds for various EU programs and policies, including those that relate to African development and Trade Integration.74 A given example of this is the ACP-EU Cooperation also known as the Cotonou agreement. Although the basis of this chapter is to compare the institutions of the AU and EU, it is however necessary to briefly review the ACP-EU cooperation because it is in my opinion that the future of the African integration may depend or be affected by this partnership 75. This partnership has helped somewhat shape trade developments in Africa. In figure 2 below, we see the effects of these agreements with these States and

74 Council of the European Union, the EU and Africa: Towards a Strategic Partnership, Brussels, 19 December 2005, 15961/05 (Presse 367). 75 In 2001, the EU markets were opened completely for imports for Balkan States and Forty Nine Least Developed Countries.

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preferential access to EU markets.

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The Cotonou Agreement76 is seen as a global and exemplary Agreement, which introduces radical changes and ambitious objectives while preserving the 'acquis'77 of 25 years of ACP-EU cooperation. The agreement is based on five interdependent pillars with the underlying objective of the fight against poverty: an enhanced political dimension, increased participation, and a more strategic approach to cooperation focusing on poverty reduction, new economic and trade partnerships and improved financial cooperation78. Cotonou laid the basis for new, reciprocal, and WTO-consistent trading agreements between the European Union and six groupings of ACP states by 2008, the date of expiration of the waiver. The EPAs would replace the Lomé system of unilateral trade preferences with more comprehensive, modern, free trade agreements that would be legal under Article XXIV of the General Agreement on Tariffs and Trade (GATT). While being beneficiaries of the Cotonou agreements, ACP countries are also eligible for GSP (Generalized System of Preferences)79 preferences; under which industrialized countries would grant autonomous trade preferences to all developing countries and waiver to allow such preferences as granted in 1971 by the GATT. 80 And also is the Everything But Arms preference (EBA).81 The comparisons can go on and on and still it would be observed that although, the African region is still termed as underdeveloped or even, a developing nation, it has come a long way in its drive to achieving economic growth through regional integration of its nations and the relationship with the global economies of the world. We should, however, not lose sight that African economic integration is still at its beginnings. “With the exception of the most southern part of Africa, where the regional exchange of goods and services increased quite substantially over the 1990s, economic 76 Salama, C., & Dearden, S. (2000). The Cotonou Agreement. European Development Policy Study Group discussion papers, no. 20.

77 The entire body of European laws is known as the acquis communautaire.

For enlargement negotiations, the acquis have been divided into 31 chapters, each of which

must be 'closed' by candidates.

78 Price Waterhouse Coopers. 2005. "Sustainability Impact Assessment of the EU-ACP Economic Partnership Agreements." 80 The GSP preference scheme provides nonreciprocal preferences with lower tariffs or completely duty-free access for imports from 178 developing countries and territories into the EU markets.

81 For a detailed discussion on the impact of EU preferences for LDCs under Everything But Arms, see Brenton (2003)and the Europa website.

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79 The GSP became a recommendation of the UNCTAD in 1968.

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integration has remained low in Sub-Saharan Africa.”82 As in the Middle East and North Africa, the general openness to trade is high, but they trade little among each other. On the issue of EPAs, According to the provisions of the Cotonou Partnership Agreement (CPA), the EPA is expected to contribute to the deepening of the regional economic integration process in Africa and by that same process, also contribute to poverty reduction in Africa. Yet even with the expected elimination of customs tariffs on imports from the EU to African countries within the RECs with which they would establish free trade areas (FTAs), cheaper and ‘subsidized’ European imports would surge into their economies, which may also result in increased competition with local manufacturers and their industries. From the early years of African integration, market access programs have been on the table and can be traced back to the Yaoundé Conventions in the sixties83, which was maintained under the Lomé Conventions throughout the seventies, up to the nineties. Yet, African countries have not been able to benefit from their special and preferential access to the European markets.84 These impacts of EPAs may have been accessed and examined by a sample number of impact studies conducted for the African countries. To cite an example, the ECOWAS case impact studies that have been undertaken for Ghana and Nigeria indicate that the immediate impact of the EPA would result to revenue losses due to the decrease of import duties on more competitive European products85. On this basis anticipated results therefore to the overall process of regional economic integration process within the Regional Economic Communities (RECs) on the continent, becomes critical.

82 European Central Bank, ‘Economic Integration in Selected Regions outside the European Union’, ECB Monthly Bulletin, October 2004, pp. 67-84, esp. p. 71. 83 In 1963 and 1969 18 African States and their six European counterparts signed the First and Second Yaoundé Conventions, supported by resources from the 2nd and

84 Brenton, P. (2003) ‘Integrating the Least Developed Countries into the world trading system: the current impact of EU preferences under Everything But Arms’, World Bank Policy Research Working Paper 3018, World Bank, Washington D.C.

85 McQueen, M. 1999. The Impact Studies on the Effects of REPAs between the ACP and the EU. (ECDPM Discussion Paper 3). Maastricht: ECDPM.

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3rd EDF respectively. The agreements were geared mainly towards financial, technical and trade cooperation, primarily in the sectors of economic and social infrastructure.

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Though still argued by so many as a means to pool the African region more deeply into poverty and underdevelopment, experts still believe it will build the regions drive towards global integration. Experts also believe that the future success and prospects of the region as it concerns EPA’s maybe found within the context of Article 6 of the Abuja Treaty of 1991 establishing the African Economic Community. It is said that these agreements seek to create over a period 34 years since its entry into force, Africa’s own continental Free Trade Area/Customs Union, African Common Market and the African Monetary Union and

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the African Economic Community (AEC).

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CHAPTER FOUR

REGIONAL INTEGRATION ARRANGEMENTS IT’S IMPACT ON THE AFRICAN REGION.

4.0 Introduction Past and present studies have shown the efforts Africa has made towards its pursuance of regional integration arrangements and have also shown the many promises such arrangements hold for individual countries and its continent as a whole. These arrangements will however not be pursued if they had no recorded realistic achievements and show how their success could lay in the economic analysis of it costs and benefits. So it at this, the chapter looks to review one of the literatures of economics on regional integration. - The Viner Model. This model has been used to analyse the implementations and effects of regional integration arrangements over time and its singular phenomenon of the formation of a customs union. As we go on further, we see the impacts and need of this arrangement in the African region and regional integration effects.

4.1 Regional Integration Arrangements; the Viner Literature The literature on customs unions is a strange phenomenon which unites free-traders and protectionists in the field of commercial policy, and its strangeness suggest that there is something peculiar in the apparent economics of customs unions. The customs union

properly disentangled. Viner (1950, p.41) Anthony Erihre Oneya MSc International Trade 2006

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problem is entangled in the whole free-trade-protection issue, and it has never yet been

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Regionalism in the world today and its economy has been seen to involve not only small blocs of regions in countries but also large blocs of countries that count potentially for an appreciable share of the global world trade. The Jacob Viner model is used here primarily because of its historical basis of one the first models that challenged and argued the concept and rationale of early times on the relationship of a customs union and a free trade area. The structure and rationale of the customs union lies behind the WTO guidelines and that mainly of the GATT/WTO Article XXIV86, permitting its formation and a free trade area as the special exceptions to the rules against international discrimination. Since the mid-1970s theoreticians have had a sceptical opinion about the economic value of trade and customs union formation. It was considered to be the second best policy among others. With the development of the theory of intra-industry trade in the mid-1970s, new light was shed on the usefulness of regional trade arrangements and liberalization. Even more optimism about the role of economic integration has brought many theoreticians to try and to investigate the effects of elimination of non-tariffs barriers instead of a customs duties and its still however, an open question whether integration arrangements are essential for economic growth. Until Viner (1950) published its pioneering work in 1950 87, economic integration was a separate subject in economic theory. However, the concept been suggested more than 40 years by Viner (Trade Diversion and Creation)88 have been accepted by every aspect of International trade theory and as a matter of fact, even by political economists. 86 Conforming to provisions of Article XXIV, which remained essentially unchanged between the inception of GATT in 1947 and 1994, when the Uruguay Round Agreement (URA) was signed. The URA merely clarified, but did not change, the provisions of Article XXIV. Paragraphs 4 to 10 of Article XXIV of GATT (as clarified in the Understanding on the Interpretation of Article XXIV of GATT 1994) provide for the formation and operation of customs unions and free trade areas covering trade in goods. Basically, two criteria were laid down in Article XXIV for a CU or FTA to be waived from MFN obligations: first, “substantially all trade” among members of a CU or FTA must be free, and second, post-union (or post-FTA) barriers on trade with non-members must not on the whole be more restrictive than those that members had prior to their forming a CU or FTA.

87 Viner, J. (1950), The Customs Union Issue (Carnegie Endowment for International Peace), 41-55.

88

Trade creation (TC) is the replacement of expensive domestic production by cheaper imports from a partner, and Trade diversion (TD) is the replacement of cheaper

to economic integration with the evolving concept of trade creation and diversion as the build point towards regional economic integration of any country.

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initial imports from the outside world by more expensive imports from a partner. This approach to regional integration has led to identifying the basis of trade as it relates

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That a customs union can lead to an institution of domestic high cost has not come to surprise anyone in present times seeing its effects in many sub-regional blocs and regional formations; especially in the EU. Evidently, what is already less obvious is that in many cases, the regional liberalisation of trade can lead to a substitution of low-cost imports (originating initially from nonmember or partner country) by imports originating in the preferred country. Viner however, stressed the discriminating aspect of regional integration showing the same token that preferential concessions made on customs duties would impose real cost on donors.89 His analysis were clear cut and assumptions, quite simplistic and he shows clearly in his assumptions that in any given situation of trade among countries or regions, there will always be either trade creation and diversion, but not both at the same time. Focusing on its ever positive effect, (Lipsey 1957) and others, asserted that some trade diverting customs union would be beneficial to its members and this was in contradiction in Viner’s conclusions in his literature on regional arrangements; as it is obvious that the consumer surplus effect can compensate in excess the negative trade diversion effect on any production side, provided the decrease in local prices is sufficiently large. Also made was the point that consumer benefits occurred in both cases and might even outweigh the losses in the case of trade diversion. Essentially many others such as (Cooper and Massell 1965)90 had a different view point to Viner’s approach on integration91. They both stated that Viner’s theory is a sheer extension of free trade theories, since trade creation effect is not more than what the integrative process contributes in terms of dismantling of protections in future partner countries and therefore, can only be considered as a step in the right direction for regional integration for any nation92.

89 Lipsey, R. (1957). The theory of customs union: trade diversion and welfare economica. Vol. 24 pp. 40-6 90 Cooper, C.A., and Massell, B.F. (1965), ‘A New look at Customs Union theory’, Economic Journal, 75: 742-7

92 Note that The basis for integration in any case, will include the benefits from trade creation, economic trade diversion, greater economies of scale which is based on profitable competition, increased investment, free movement of resources, comprehensive cooperation, peace and security, and improved bargaining power.

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91 Viner always maintained his view that trade creation was always beneficial and trade diversion could be detrimental.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

Understanding the effects of economic integration on trade, we see factors where FTA or CU can result in a lower level of external tariffs or other restriction compared with situations under regional integration arrangements, can result to external trade creation and also result to a faster economic growth in regions due to integration of members importing more from the rest of the world. However, the economic welfare of non-member countries is unaffected by the formation of a regional integration arrangement, within the stylized Vinerian framework, and the change in world economic welfare is identical to the aggregate change in welfare of countries in the preferential trading arrangement.

4.2 Early Studies of (EU) Regional Integration Arrangements The EU remains the most successful example of regional integration arrangements and also has one of the earliest empirical approaches to assessing the impacts of regional integration arrangements with intra-regional trade patterns that led to the wake of forming a regional trading bloc. Article 2 of the Treaty establishing the EEC93, although since its developments in the 1957, has made some adjustments and incorporation (with the Maastricht Treaty), pronounces the basic structure of the future of integration in the European region. This act also led to the growth of intra-industry trade in the wake of the EC's formation and expansion. The study of Regional integration arrangements is said to have had focus in the early years, on the impacts on the European community, its trade and manufactured goods and services as recorded after the Treaty of Rome. Essentially, allowing for the concept of a flexible and open integration of the region94. A major justification for the establishment of the EU arises from the expansion of opportunities to exploit competitive advantages that result from the removal of barriers

93 The Amsterdam Treaty, Article 2, Part One, Principles, p.39 94 Ali M. El-Agraa. The European Union: Economics and Policies. 5th edition. Cambridge.

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to trade and undoubtedly, its establishments have led to substantial trade creation.

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However, there are other less beneficial effects associated with its policies95 which have led to a process of trade diversion. As it’s already known, the EC was established as a customs union and an FTA and is recorded as the first to have recorded a movement towards free trade and also put into form the Vinerian theory of regional integration arrangements and its costs and benefits. Illustrating the effects on a market for importable of a country becoming a member of a CU or FTA, we may consult the Kindleberger (1973) diagram intended to define the effects of trade creation and diversion96.

4.3 Regional Integration Arrangements and the African Union Efforts towards regional integration around the world, since World War II has been a recorded success especially in the EU and many arrangements have been formed or

95 The EU Commercial Policy is said to have led to high-cost sources of supply which has supplanted lower-cost sources many times since it was established. 96 Kindleberger, C.P. (1973), International Economics, 5th edition.

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expanded. There has been 194 agreements notified to the GATT and the WTO since

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1999, 87 (45%) and up to 1990,97 leaving most of the world’s nations to belong at least to one regional integration arrangements and one followed by that line is the African region. Africa has had numerous schemes of economic integration, with particularly all the African countries belonging to more than one scheme (as shown in the chart below) and may possibly record one the oldest schemes of integration arrangements in the world: the Southern African Customs Union (SACU in 1910). One of the expected outcomes of deeper integration in Africa is the strengthening of intra-African trade and despite the trade liberation schemes of the RECs, intra-African trade is still very low, accounting for about 10 per cent of the value of total exports.

Note: Africa has 14 RECs of varying design, scope, and objectives. Six of them dominate the integration landscape. The figures in the chart represents the number of members. Many levels of integration have been seen in the region since the 1960 and 1970’s though slow, in the 1980’s, the 1990’s recorded great revitalization of integration efforts with the establishment of the African Economic Community. The EU has shown that regional integration arrangements can lead to income convergence but the East African Community has shown that regional integration arrangements can lead to income divergence, with comparative advantages and Page75

agglomeration effects in the region.

97 (World bank 2000b) Report.

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Basically, this has created the argument that income divergence is more likely in regional integration arrangements among developing nations and convergence is more likely in arrangements between industrial and developing countries. Due to weak production structures and constrains by a variety of inadequacies, most African countries are small with low incomes and its domestic markets get affected by these factors which affects its size limits98. African countries can benefit from regional integration if they design integration arrangements suited to their needs and capabilities. Integration will help overcome Africans problems by overcoming constraints arising from small domestic markets which will allow the region reap the benefits of scale economics, and more domestic and foreign investments. These benefits will raise productivity and diversify exports. Integrated nations in the region can create common results and solutions using comparative

advantages

of

their

resources

for

efficient

outcomes

of

these

arrangements99. Regional integration arrangements can help make deeper reforms for the region and provide a framework for coordinating policies and regulations to help ensure compliance and provide mechanism of collective restraints. It’s been suggested that if Africa maintains the idea of the formation of regional integration arrangements it should decide what countries should be members and what policies should be adopted and if it can be consistent with it joining members.100 Integration however, is seen as just one tool for the advance of African countries. As effective integration is required as a part of any overall development strategy and should implement developmental programs for which they were best designed for.

Africa’s Regional and Sub-regional Economic Communities (source: adapted

98 ECA report: Accessing Regional Integration in Africa – www.unesa.org/aria 99 Market forces dictate production based on comparative advantage, which increases the marginal welfare of people in a common market. 100 Ibid.,p51

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from the World Bank).

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DISCUSSIONS

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CHAPTER FIVE

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

5.0 Introduction In the course of carrying out the research of this paper, the use of discussions instead of a methodology became necessary. We have already reviewed in earlier chapters the concept and theories of regional integration arrangements and its effects on a country’s economy. Been that this paper has become more literature based; the use of discussions has become more essential than that of a methodology. Note that the use of current media articles and viewpoints became necessary, as the issue of African integration has become a debate for argument and economic research and since no questioner was drawn up or interviews conducted for the purpose of this research.

5.1 Discussions I have had quite a good number of discussions with people on the issue of Africa’s future and her drive towards achieving its dream of a ‘United States of Africa’. During a class trip to Brussels, I asked a member of staff at the EU parliament what she thought about the whole idea; and she was quite optimistic and believed the region had a good chance of achieving its goals. Most (African) Students of International Trade were not very optimistic about the idea and thought the region had a long way ahead. Also that it was better off with its regional blocs than a single entity. But since no method of a quantitative or qualitative nature of a questionnaire was used here, the paper will outline different articles past and present on the views of Citizens, Governments and International institutions on the issue. After his swearing into a democratic government, Nigeria’s President; Umaru Yar’Adua, affirmed his country’s support to the ultimate goal of the AU being “a full and political integration leading to the United states of Africa”. However, he states on, “Africa should

on strengthen and consolidation of internal governance”101. 101 The Peoples Daily Online – ( www.english.people.com.cn)

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take a gradual approach to achieving its integration because of the critical need to focus

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Integration in Africa is not an event but a process and the process is already here. Our integration is an ongoing process at different levels – regionally and continentally102. The virtues of regional economic integration in Africa can reduce the cost of developing essential infrastructure and facilitate large scale investments by “reinforcing the attractiveness of our economies and reduce any risks103”. A Single African currency will one day become a reality; although it may seem crazy at the moment. – Senegal Artist, Mansour Ciss104. Africa should build on its existing sub-regional and bilateral arrangements in order to broaden and deepen its regional economic integration and the creation of a single regional market can increase its economic efficiency105. In the decades after independence the obstacles to progress at African integration have been formidable, not the least due to the diversity on basic constitutional principles and socio-economic characteristics. But there is reason for optimism because Africa seems to be much more homogeneous in these respects106. Regional economic integration is a fundamental part of national development strategies because it smoothes the path to a gradual and harmonious integration into the world economy. The EU has the experience of its own integration, which is the world's most evolved form of a closer Union between sovereign its states. The EC’s support for the African Union and for NEPAD must be based on the aims set by Africans themselves. The international community widely welcomed the NEPAD initiative based on the principle that Africa should assume ownership of its development strategies. Of these strategies, regional integration is the centrepiece of the NEPAD action plan, with emphasis being put on strengthening regional economic integration areas, improving the macroeconomic environment, stepping up integration, and developing regional trade.

102 Press comments made by South African Foreign Minster Dr Nkosazana Dlamini Zuma and Minister of Foreign Affairs, Co-operation and African Integration of Niger. 18 April 2007. culled from – www.dfa.gov.za/doc/speeches

103 President Abdelaziz Bouteflika of Algeria on Making African Integration a Reality.

104 Cf. from Africa Recovery, Vol.16 #2-3 (September 2002), page 10 105 Culled from; a report on the need for African integration in the Statesman Newspaper Ghana. - (www.thestatesmanonline.com).

106 Culled from: the CCIS Research Series Working Paper No. 4 by

Dr. Wolfgang Zank

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From Africa Recovery, Vol.16 #2-3 (September 2002), page 10 (http://www.un.org/ecosocdev/geninfo/afrec/)

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The strengthening of regional economic communities is a necessary stage in the creation of the African single market107. Many have given their opinion of the success of the AU and some have recommended that it will only succeed if truly structured in the image of the EU in both concept and practice. Comments have been reviewed in the media and academic presentations on its success. We review some of these comments from a BBC talk point forum; Comments: If the political ideology of the African Union is well articulated and well implemented, then the AU ideology can help to heal the tribal, ethnic, religious and colonial divisions (francophone and Anglo-phone) that have prevented Africa from achieving unity. Nsambila Cecilio Mbolela, Zambian108 Turning Africa around will take many decades but the continent has great potential. It will need to develop her economies more, stop corruption, clamp down on wars and undemocratic states, and develop the transport infrastructure. An African Parliament, Court of Justice and Central Bank seem sensible but must be set up properly. They must try to avoid the excessive bureaucracy that has occurred with the European Union. The Peace and Security Council I expect will have a very important role to play. However there must be representation for the indigenous peoples and languages and regions of Africa somewhere in the organisation. The African Union is the first good sign of hope for the continent in generations but it has a very huge task ahead which will take many decades. I wish it well and hope it succeeds. Alex Naughton, UK109 The AU is an unworkable monstrosity created to keep despots in power for longer than they merit. It is a union of presidents who will come to the rescue of their peers even when the electorate no longer wants them - the Gaddafi’s, Mugabe’s, Moi’s, Oma Bongos.

Pascal Cotonou, 7-9 October 2002 (www.ec.europa.eu/)

108 From the BBC Talking point forum and comments. Available online at; http://news.bbc.co.uk/1/hi/talking_point/debates/african/2116564.stm 109 Ibid.,

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107 Speeches and articles by Pascal Lamy on First forum of African parliamentarians in the framework of the New Partnership for Africa's Development, NEPAD Forum,

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Unless there is a clear ‘Charter’ to promote good governance, individual freedoms within member states which can be enforced, Africa can kiss progress and prosperity goodbye for keeps. Muzambiringa, Zimbabwe110 Those who think that the AU can easily emulate the EU are grossly mistaken. Unfortunately many AU leaders cannot let multi-party democracies exist, and they also squander our resources and hide them in EU countries. The differences are sharp enough and too difficult to emulate. Chidi Nwamadi, Nigeria111 Personally I believe that this newly born union should focus on economic developments rather than intervene in the affairs of member states, and borrowing western style of justice and democracy. The AU can't be like EU where their member countries are culturally and ethnically united but nevertheless AU should try to be like ASEAN (Association of South East Asian Nations) where there are different cultures and beliefs yet have common interest. Abdullah Hussein, Kuala-Lumpur, Malaysia112 The creation of the AU is at best symbolic and at worst substantial. However, the idea of African Union has been planted, and it is something that all Africans need to embrace. For sure, our current leaders are too despotic and corrupt to govern their countries and unite Africa but future leaders can build on the idea and change the destiny of our continent. George Mutua, Kenya113 According to the ARIA report, one of the challenges to integration in Africa is inadequate financing and this seriously creates a barrier to integration in the region. It further highlights the financial resources to support the regional economic communities come mainly from assessed contributions, but external assistance has been the prime source

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110 Ibid., 111 Ibid., 112 Ibid., 113 Ibid.,

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of financing the operations of the regions REC’s114 which in turn may affect the actual workings of the African Union. However, we have seen from the various discussions which have shown different views, most optimistic, and some negative, about Africa’s drive towards integration but still the primary question remains, is a unified Africa the way forward? The question may probably be answered in months or years even; to come but this research does not intend to reach any conclusion and like many, leave open doors for further opinions and research with an optimistic view of Africa’s drive towards integration and a place in the global market.

CHAPTER SIX

114 It’s been observed that REC’s do go a long way to support the actualisation of integration.

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SUMMARY, CONCLUSION AND RECOMMENDATIONS

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

6.1 Summary The idea of regional integration and the building of the initiative were relatively simple. The founding states of the EU had stable democracies (at least quite stable after the war) unlike the African region where till this day even with the formation of different economic and peace strategies in place, many problems upshot after many others tend to have been resolved. Many countries in the region have been in a gray zone between democracy and autocratic rule probably leaving the idea of a United State of Africa, a mere illusion, or its great and challenging walk to reality? Although it seems that the global community has not yet come to accept the presence of the AU, the country continues to tackle issues that has stigmatised it in the past; allowing for a full welcome to the global economies. On the issue of a creation of a common market, it’s a basic principle that its creation can be fulfilled with the agreement on the idea of a well maintained market economy and with borders open for market & economic transactions. A few years ago, as a young scholar, I was very optimistic of a true West African integration and in my final year paper, I shared that optimism with the world around me and this is the same optimism which has led the leaders of West Africa to achieve that dream. The creation of Africa’s common market will undoubtedly, lead to a better economic community of its REC’s and with the consensus to an open market economy, the integration of these markets forces can occur in the region.

6.2 Recommendations Africa’s nations of the AU seem to be far too divergent and need to embrace a well planned initiative for growth of the continent. Good governance is said to be much more than sound policies and the African

whether by a unified continent, or a state regional bloc.

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governments have no choice but to put its economic growth for the region into effect

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I read somewhere once that to ‘Globalise, Africa must Regionalise’. The concept of globalisation places huge challenges on the economic prospects of the region, which becomes on major issue of achieving a clear cut dream of regionalisation. Tackling

its

challenges

to

development,

the

region

needs

to

welcome

both

multilateralism and regionalism to promote proper enlargement of its markets and the exploit its economies of scale. Safeguarded by the WTO process, it can benefit from unfair protectionist measures and the region has to ensure that it conforms to the WTO requirements under Article XXIV of the GATT for the regional integration arrangements. Quoting the former OAU Secretary General115, “Regional approach must therefore replace national approach in planning economic and industrial policies as well as the designing of development projects and the pointer for African initiatives intended for development of our continent”. Undoubtedly, the African region needs to braze itself and work towards achieving its goals to economic growth and development if it wants to accomplish its long term goals, Africa’s leaders with major world players should begin to develop effective partnership strategies and policies for addressing the problems that affect integration in the region. The signing of a joint AU – EU strategic partnership will help the African Institution build up and forge a new and strong partnership that will help renew the relationship with the regions and provide new identities and help capitalize on the lessons of the past and provide a effective strategic framework for long-term integration and cooperation. The creation of initiatives and policies towards achieving its goal is but one step forward but the education of its citizens is another. As during the Shuman years, he didn’t just initiate the idea of integration for Europe, he made sure the initiative was taught, explained and understood by its citizens. Africa leaders and the AU should follow in this step if integration is to be achieved in the continent.

115 Statement by H.E. Amara Essy, OAU Secretary General, at the Third African Development Forum (ADF III), Addis Ababa, 4th March 2002.

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6.3 Conclusion

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

I have had the opportunity to see and have learnt of the outcome of a well structured and planned integration of a region as in the case of the EU and as an African, I look forward to a time where I can travel and trade among regions in Africa, with a single passport and trade with a single currency without borders or restrictions. It has been said that one man’s food is another’s poison. Regional integration has worked for the EU and does not really mean it has to work for Africa. Undoubtedly, the African region has recorded substantive results with it regional blocs and REC’s and with successive partnership agreements with other regional blocs of the world. Unfortunately, many African nations still remain tied to its colonial countries and would prefer to remain that way and not letting themselves be singled out from their major aids received from their outside influences. Recent reports have shown that even the aid received by the African region from International Organisations, are used to finance the wars in its different regions. Although some term this as speculation, we have seen the results from wars and battles in most African states. Other news reports and research has shown that the cost of conflict is equal to the amount of money received in aid by the affected region. It further shows that armed conflict in Africa, over a 15-year period was nearly $300bn (£146bn) on the cost to the continent's development116. Although it is possible in maybe many years from now, to achieve its dream of a panAfrican state, Africa needs to take the process of Integration seriously and in a gradual process. We saw the EU celebrate 50 years of achieving integration in 2006, so will Africa hope to celebrate its success in years to come? However, with the current problems and

116 Report by the BBC. Available online from; http://news.bbc.co.uk/1/hi/world/africa/7038348.stm

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challenges facing the region, 50 years may be a long shot but achievable no doubt.

The Challenges and Prospects of the future of Integration in the African Union (Comparisons with the EU)

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Web Documents and Hyperlinks: BBC News report on Africa: available from; http://news.bbc.co.uk/1/hi/world/africa/7038348.stm BBC Talking Point on the creation of the African Union: available from; http://news.bbc.co.uk/1/hi/talking_point/debates/african/2116564.stm Constitutive Act of the African Union: available from http://www.africa-union.org/root/au/AboutAu/Constitutive_Act_en.htm Economic Committee of Africa report: Accessing Regional Integration in Africa. Available at: www.unesa.org/aria The

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www.nepad.org

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Press and Articles: BBC

NEWS/AFRICA:

Available

at;

http://news.bbc.co.uk/go/pr/fr/-/2/hi/africa/6260274.stm BBC

NEWS

Article.

China

to

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its

aid

to

Africa.

Available

at;

http://news.bbc.co.uk/1/hi/world/asia-pacific/6115870.stm. Press comments made by South African Foreign Minster Dr Nkosazana Dlamini Zuma and Minister of Foreign Affairs, Co-operation and African Integration of Niger. 18 April 2007 Available from; http://www.dfa.gov.za/docs/speeches/2007/dzum0418a.htm Speeches and articles by Pascal Lamy. First forum of African parliamentarians in the framework of the New Partnership for Africa's Development NEPAD Forum, Pascal

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Further Reading: Assessing Regional Integration in Africa II (ARIA Report II); Rationalizing Regional Economic Communities. The report can be found and downloaded from; http://www.uneca.org/aria2/ Debrun, X., P. Masson and C. Pattillo (2002), “Monetary Unions in West Africa: Who Might Gain, Who Might Lose and Why?”, IMF Working Paper 02/226, International Monetary Fund, Washington. - West African Currency Unions: Rationale and Sustainability. CESifo Economic Studies, Vol. 49, 3/2003, 381– 413. IMF, Research Department, Washington D.C Economic Partnership Agreements between the EU and groups of ACP countries: Will they promote development? By Karel van Hoestenberghe and Hein Page75

Roelfsema.

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Hoekman,

Bernard,

and

Maurice

Schiff.

2002.

“Benefiting

from

Regional

Integration.” In Development, Trade and the WTO: A Handbook, ed. Bernard Hoekman, Aaditya Mattoo, and Philip English. Washington, DC: World Bank. UNU-CRIS Occasional Papers (0-2006/27) Available from: the United Nations University, Comparative Regional Integration Studies. (www.unu.edu)online learning Report drawn up on behalf of the Committee on Economic and Monetary Affairs on the EMS By Mr. J. Purvis.

European Parliament Working Documents (1981-82) Document 1-

179/81 THE EU AND AFRICA: TOWARDS A STRATEGIC PARTNERSHIP The House of Lords, European Union Committee. 34th Report of Session, 2005-06 (Vol.1). Available

online;

http://www.parliament.uk/parliamentary_committees/lords_eu_select_committee.cfm United Nations Economic Commission for Africa. 2004. Accessing regional Integration in Africa. Addis Ababa: Economic Commission for Africa.

Appendix A

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Pictorial Representations of the AU and EU Regions.

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Regions of the European Union Integration

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Regions of the African Union (Integration)

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Countries of the African Union Integration

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