Africa: The economics of African federation

A report "Reflections on Africa's historic and current initiatives for political and economic unity" by the Nigerian Institute of Social and Economic Research (NISER) in Ibadan attempted to analyse objectively the economic and socio political impact of African regional integration.

According to NISER: “The hopes for a New International Economic Order (NIEO) arising from various international socio-economic and political negotiations, particularly after world war II (1939-1945), became largely misplaced in the 1950s through the 1960s, inter alia, due to the lopsided socio-economic development pattern which accompanied such negotiations.

For example, the terms of trade worsened for the world’s primary products producers (mostly African countries), while it improved for the producers of manufactured goods (industrialised countries such as the United States of America and the European countries).

Against this background, the progress of such African primary producers, who incidentally adopted the ‘isolationist’ development approach to their respective national development programmes, as a whole, was (and is still) nowhere comparable to the progress made in the rest of the world; particularly in the industrial European countries - producers of manufactured goods.

The emerging undesirable trends of socio-economic and political developments at both the pre-and post-colonial periods in the countries of these African primary producers made it clear, especially within the first decade of these African countries independence that, the development gap between them and the industrialised countries would continuously widen over time in the absence of any determined effort, on their part, to reverse the dangerous development trend. In recognition of the weaknesses in the isolationist development approach to salvage these African countries from their deplorable development position, about the only realistic option open for adoption was to take appropriate concerted measures capable of strengthening these African countries individually and collectively in order to compete more effectively in the global economy (OAU, 1963).

This initiative came simultaneously with the emergence of well-integrated nations of regional sizes, notably, the United States of America (USA), the former Union of Soviet Socialist Republics (USSR) and China.

Probably, the consequential disparity observed between the respective eco-political powers of these large nations and regional groupings and those of the un-integrated ones combined, reinforced the African inspiration into initiating the practical move towards regional and sub-regional economic integration.

Coincidentally, there were instant experiments of this new vogue (economic integration) in Europe and Latin America, prompted largely by the great concern over economic subordination and the consequent socio-political insecurity of their respective regions when faced with the realities of the world giants at their door steps, especially in the 1940s through the 1950s.

Given the positive impacts of regional/sub-regional groupings on the Latin American and European economies, ‘economic integration’ constitutes a vogue as a concrete economic target

for facilitating the attainment of the objectives of “collective self-reliance and self-sustenance” under an economic regional framework. Thus, in Africa, the lessons of experience from these experimentations could hardly have escaped the socio-economic and political elites at independence.

Against this background, regional and sub-regional groupings couched under cooperative approach to economic development, focussed on collective self-reliance, started springing up in Africa as well as the developing continents of the world.

In spite of the numerous regional/sub-regional groupings which sprang up amidst abundant development potentials (human and material resources), the pace and pattern of socio-economic and political development in the African region, particularly since the early 1980s, became susceptible to the conclusion that the direction of economic development cannot possibly guarantee rapid, effective and desirable economic transformation (Edozien and Osagie, 1982: 97-118).

This has culminated in what many analysts on African economic development define as: African countries declining GDP, high stagflation pressures, food crisis and heavy burden of external debts (Phillips, 1989).

In recognition of the foregoing development problems in Africa, the existing regional/subregional groupings have for about two decades of policy reforms in the region, initiated the move to redress the indicators of economic decline. This has therefore created an inspiration for renewed interest in regional integration as a strategy for dealing with the deep-rooted structural problems in the African region.

Based on the “Washington Consensus” of trade liberalisation, stable macroeconomic policy, getting prices right, and minimal government interference within the globalising world, more emphasis tend to be place on the opening up of African economies to international competition to return African countries to a path of sustainable growth.

Incidentally, economic growth mostly in the 1990s weakened due to such exogenous developments as drought and floods in various parts of the continent, declining aid and weakening commodity prices. In this regard, current growth rates in African countries are not enough to arrest Africa’s long-standing economic decline or have much effect on widespread poverty (UNCTAD, 1998).

With marginal results of integrative arrangements in Africa, thus far, the “Washington Consensus” acknowledges that:

(1) policy must reflect the fact that with economic liberalisation, markets may not emerge on their own, and may be sub-optimal if they do;

(2) policy must recognise and address directly structural constraints and institutional limitations if incentives are to be translated into a vigorous supply response through new investment for the expansion and rationalisation of production;

(3) in addition to the traditional challenges, governments now must cope with unprecedented acceleration of technological change and the consequences of globalisation as the new global economy does not benefit all countries equally.

On the basis of the foregoing acknowledgment has been the renewed interest in regional economic integration in Africa as a means of overcoming the constraints in individual countries related to their small size, market limitations and other structural problems.

The NISER report recognizes the changing political and social landscape in Africa. In the 1990s many African countries successfully pursued political and social reforms that resulted in a much transformed political and social landscape. Entrenched democratic and personal freedoms and a socially conscious pursuit of transparency. Most of these initiatives were homegrown mass movements. A new wave of liberation.

NISER reports that: In actual fact, the notion of good governance has assumed a central position in the discussions of Africa’s democratisation process.

Although, corruption and nepotism have played a destructive role in many of the African societies in the past, these issues are currently being attended to by many of the African Governments.

Moreover, policy stability and harmonisation that can lead to rapid development are now being taken into consideration.

In short many African societies have now realised that apart from economic gains from democratisation alongside liberalisation and globalisation, there are increasing political gains that can be achieved toward regional integration in terms of political stability of member states.

Also, regional integration has been seen by many Independent African States as impetus to possible solution to the continent’s deep and prolonged economic and social crisis.

Anaysis of preconditions

The NISER report analyses the prevailing conditions in Africa which may be beneficial to the integration efforst that African countries are currently pursuing.

Major among such preconditions are that:

1. The union must be made up of countries of equal socio-economic importance/status to avoid the fear of possible dominance - in religion, wealth, endowment, size, population etc.

2. The size of each of the members of the union must not be so large as to permit any one of them independently to contemplate an essentially national policy of industrialization as an alternative to regional coordination.

A critical examination of these preconditions shows that they are indeed appropriate and desirable for the African region often defined as a region aspiring for collective socio-economic development in diversity-social, cultural, physical and religious matters.

Conclusion

Recently, regional unity is seen in Africa as a possible solution to the continent’s deep and prolonged economic and social crisis. Also, it is seen as a means of breaking the confines of the nation-state as well as removing the multiple socio-economic barriers and thus, opening the African economies to external competition through trade and exchange competition.

A new Africa is beginning to take shape. Many of the Independent African States have been democratised. Also, a number of them have liberalised their economies. In addition, regional integration as well as globalisation are becoming fast recognised and accepted in many African countries. In actual fact, African societies are becoming more open due to the positive effects of democratisation, economic reforms and globalisation.

Given the fact that the long run prospects for rapid development of African nations lie in their success in achieving political and economic unity among and between themselves, the important question is how African countries can successfully achieve regional unity?

That is, what are the challenges facing the African societies in their attempt at regional integration?

The first assignment for the African nations is to sustain the current impacts of democracy. That is, democratisation - cum- liberalisation on the internal front in terms of continued struggle for individual democratic freedoms and rights should be vigorously pursued.

In addition to this, African nations should form themselves into a single regional trade and exchange co-operation to deal with other multilateral trading blocks such as EU, WTO, etc., rather than the current polarised regional organisations.

In actual fact, forming themselves into a single trading block will enable them not only to speak with one voice but also make them to negotiate with other multilateral trading blocks with unified terms of reference.

Moreover, problems of financing several (polarised) regional trade and economic cooperative groupings such as SADC, COMESA, SACU, EAC, IOC, ECOWAS, WAEMU, UEMOA, IGAD CEAO, etc., will be solved through the formation of a single regional trade and economic cooperation.

Further, forming themselves into one regional block will further reduce armed conflicts in several African countries.

In conclusion, regional integration will be the focus of the world economy for a long time to come. Against this background, Africa’s future initiatives should be developed to further consolidate the gains that have been achieved.

* Kisira Kokelo is a Pan-Africanist blogger from Kenya who is currently residing in the British Virgin Islands. His blog, African Federation Now, features postings on Pan-Africanism and Continental Unity.