Nigerian Institute of Social and Economic Research (NISER) (Ibadan)
1 March 2002
document
Background Information
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) no where 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. Regardless of this simultaneous development, this initiative took due cognisance of the success and problems of some efforts at regional/sub-regional socio-economic integration in some parts of Africa (e.g., East Africa) and other parts of the world (e.g., Europe and Latin America). 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 (to be discussed shortly) couched under cooperative approach to economic development, focussed on collective self-relance, 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/sub-regional 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 acknowledgement 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. Given this renewed interest;
1. the Cross-Border initiative covering the Eastern and Southern African countries, co-sponsored by the World Bank and the IMF among other agencies, is among the initiatives that have emerged to support the fledging efforts of African countries at regional integration;
2. the European Union (EU) has also made support for the regional integration efforts in the African, Caribbean and Pacific (ACP) states, a major objective in the current ACP/EU negotiation of a post-Lome IV Convention;
3. the EU has equally proposed to enter into free trade area agreements with the ACP regions and sub-regions by 2015.
Given this renewed initiative, it can be assumed that the renewed regional integrative arrangements would be able to address such African realities as the extreme bulkanisation of the continent, the high incidence of land-locked states, extensive common borders and under developed infrastructure which has long been a major canon of Pan-African thought and practice. Besides, in the context of the ongoing globalisation of the world economy, a more contemporary strand of thought on the rationale of regional integration in Africa has therefore emerged.
Economic Integration: Operational and Theoretical Conceptualisation
On a synoptic conception of several authors (Atsain, 1983; Robson, 1968; Nowzad, 1969), Economic Integration' connotes a process of economic development which involves the elimination of discriminatory barriers among economic units of national state. For easy operational community arrangements, such economic units are expected notably to be units within a regional/sub-regional setting e.g., African, European, West African, East African and Central African settings. Put simply, economic integration in an economic region involves pure economic and political unification, eco-political cooperation and free trade areas (Nwabuzor, 1982).
Theoretically, economic integration as an eco-political concept draws largely from international (trade) relations theory which is informed by the "Customs Union Theory", proposed by Viner (1950) and enlarged subsequently by Gehrels (1956/57) and Lipsey (1960). In this regard, economic integration culminating in the formation of economic community is practically a fusion of national market aimed at economic development via the elimination of discriminatory barriers and the incorporation of cooperative arrangements among economic units of a regional/sub-regional economic grouping.
To make for effective and successful fusion of member states, an integrative approach beginning with the formation of a Free Trade Area constitutes the take off point. The consolidation and subsequent elaboration of this cooperative eco-political unification results in the formation (in ascending order) Customs Union, Common Market, Economic Union and finally economic community respectively. It is important to recognise that each of the above ranking economic integrative arrangements constitutes an experiment which is representative of a differential level of eco-political and social commitment, consequent upon some socio-politically advantageous net assessment of the attendant losses in sovereignty over these important economic decisions.
Theoretically and empirically too, the main concern of the theory of economic integration is the gains from the changes from the isolationist approach in development efforts to the collective and cooperative regional arrangements (Robson, 1980: 145). The efficacy of this arrangement is couched under international (trade) relations theory as earlier noted. However, the relevant aspect of that theory which informs the establishment of African, European and American economic communities, also as earlier noted, is the "Customs Union Theory" which proposes trade creation among member - states based on comparative cost advantages (Viner 1950; Robson, 1980). Whereas, the Customs Union Theory seems to have underpinned the cooperative and collective economic arrangements among the nations within an eco-political region/sub-region in both the developed and developing nations alike, nonetheless, its adoption in different zones tends to focus on divergent goals. In Africa quite unlike Europe, the overriding necessity to accelerate, foster and encourage the socio-economic development of African countries was seen as major development priorities at independence (OAU, 1963, ECOWAS, 1975). This therefore explains the need for the promotion of harmonious economic development of the region and the subsequent call for effective regional/sub-regional economic cooperation via the elimination of all types of obstacles to the free movement of goods/services and factors of production. In this regard, African regional groupings are couched under the efficacy of the theory of Customs Union focussed on trade liberalisation and its attendant benefits and also collective self-reliance, within the scope of economic prosperity.
Eco-Political Dimensions of Integration
Given the foregoing preambles, the history of political and economic integration in Africa dated the pre-colonial era. During this period, a number of kingdoms which extended over territories covering the present date independent African States were in existence. The culture of the people of these kingdoms were relatively well integrated to allow some limited trade and free movement of factors of production among themselves (Diejomaoh, 1983 and Lavergne, 1997). Nevertheless, the colonisation of the African States during the 19th century can be regarded as the background to current historic and economic integration efforts in Africa. That is, the colonial governments in West, Central, East, and Southern Africa attempted regional integration through free trade, common currencies and services. For instance, in West African British colonies, there was free movement of factors of production among member states (Nigeria, Gold Coast now Ghana, Gambia and Seirra Leone). Also, in West African French colonies, the countries were geographically contiguous and were administered as a Federation with common currency.
In the same vein, the Belgian colonies in Central African States introduced some measure of economic integration which included free movement of factors of production. In East Africa, the British colonies introduced the same currency and common services in the British East African colonies. Similarly, a custom union was established between the Union of South Africa, and the British protectorates of Botswana, Swaziland and Lesotho. Moreover, the British colonies in Zambia, Zimbabwe and Malawi attempted bringing about considerable economic integration among those countries. The Portuguese colonies of Mozambique, Angola, Guinea-Bissau and Cape Verde were integrated into the Portuguese economy. In the same fashion, the North African French colonies attempted regional integration of Tunisa, Libya, Algeria and Morocco during the colonial times.
However, the attainment of independence by many of the African States during the 1950s and early 1960s, downsized the efforts of the colonial governments in bringing about economic integration in Africa perhaps, due to the difficulty of surrendering the respective countries' sovereignty. In actual fact, one of the reasons for the collapse of economic integration in Africa after political independence was that the colonial governments did not have any meaningful programme of development for countries that were economically integrated under their rule. Moreover, studies by Diejomaoh, (1983) and Lavergne, (1997) have shown that the development that was achieved in some few centres such as Dakar, Abidjan, Brazzaville in the case of the French, Nairobi and its environs, and Rhodesia in the case of the British were to benefit the colonial administrations.
In spite of the above shortcomings, a number of the independent African countries, benefiting from the colonial heritage, tried to come together and form a truly economic co-operation and integration among themselves. For instance, in West Africa, the newly independent French speaking countries, using the previous colonial administrations structure, formed the West African Customs Union (UDAC) which eventually transformed into West African Economic Community (CEAO) in 1970 in order to make it equitable. In the same vein, the four French speaking independent states in central Africa, using the common-services and arrangement structure of the previous colonies of Chad, Central African Republic, Gabon and Congo, formed a Custom Union in 1959. In 1964, Cameroon joined the group to form African Economic and Custom (UDEAC) Union. Despite the initial misunderstanding within the group, UDEAC is regarded as one of the longest surviving Customs Union in Africa. Modifying the integrative arrangements under colonial rule, the Treaty for East African Co-operation (EAC) was developed in 1967 by the independent states of Kenya, Tanzania and Uganda. The Treaty was expected to provide a transfer tax to indigent states among the group on one hand, while the East African Development Bank was to ensure a balanced development among the states on the other hand. Nevertheless, attempts by the United Nations (UN) Economic Commission for Africa to expand the scope of the EAC to embrace the independent states of Zambia, Burundi and Rwanda in the 1960s failed. In Southern Africa, there was little prospect for economic integration during the 1960s due to the armed struggle for independence in Mozambique, Angola, and Zimbabwe. Also, in both West African States (Cote D'Ivoire, Guinea, Liberia and Sierra-Leone ) and North African States (Egypt and Sudan), efforts at forming economic integration during the 1960s did not succeed due to political disagreements between independent states forming the blocks. From the foregoing, it can be seen that in spite of the high spirits of many of the Independent African States to form economic integration groupings in the 1960s, their efforts did not receive 100 per cent success. This was largely due to the unsettled political and economic climates of many Independent African States during the period. Also, the import substitution, trade and exchange control and inward looking policy adopted by many of the Independent African States during the 1960s were constraints to regional integration. Moreover, the political instability in the form of military coups and civil wars in many of these independent colonies created constraints which obstructed the effectiveness of economic groupings for economic integration in Africa
However, regional co-operative efforts are now gaining a new impetus in Africa. The first formal moves toward regional integration in Africa was articulated in the establishment of the United Nations Economic Commission for Africa (ECA) in 1956, the African Development Bank (ADB) in 1963 and the Organisation of African Unity (OAU) in 1963. The emergence of these important institutions coupled with the recent world democratisation, liberialisation and globlisation have informed African States of the importance of regional integration towards achieving political and economic stability as well as rapid industrial development of their states. In addition, Africans today are well aware of the challenges facing them and have started tackling them in terms of regional cooperation. For instance, the armed conflicts in some of the African societies are being attended to through regional and sub-regional co-operative organisations such as ECOMOG, Inter-Governmental Authority on Development (IGAD), etc. Also, the issue of democratisation of African states have taken the root. 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.
Africa's Economic Integration: The Issue of Social Diversity
As noted in the foregoing, economic integration is couched under the Customs Union Theory. This therefore explains the need to promote and reinforce all factors which could encourage harmonious socio-economic development of all states within a community aspiring to be integrated socio-economically. In light of this, the general conclusion which could be inferred from an examination of this theory in practice, is that economic integration may not be advantageous in developing regions/ sub-regions which do not have the preconditions of the theoretical requirements. According to Haas (1958) quoted in Nye (1963):
"it is dangerous to claim validity for the 'European theory' in societies which do not reproduce the physical conditions, ideologies, class structure, group relations and practical traditions and institutions of contemporary Western Europe."
Assessing this view in later years, Edozien and Osagie (1982) in conformity with the proposition of Singer (1967), specify the preconditions for economic integration which deal specifically with those required for the African union. In fact, the preconditions emerged from a comparative analysis of the differences between the relatively successful Central American Common Markets and those of the less successful East African Economic Communities. 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, endownment, 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.
Incidentally, the role of social/cultural/physical/religious diversity in the effectiveness of economic integration could be perceived from two different dimensions. Firstly, under a positive situation where the diversity creates a situation of a healthy rivalry among the member states. This would culminate in a realistic application of the theory of comparative advantage for the derivation of the benefits of trade creation. Secondly, under a negative situation, peculiar with African countries, the situation of diversity breeds the emergence of hatred, fear of domination and difficulty in surrendering the assumed hard won political sovereignty under an eco-political union.
For example, Nigeria (in terms of size, endowment, population etc), has the potential to completely dominate the West African Community. Besides, the relatively advanced levels of industrialization in Nigeria, Ghana and Cote d' Ivoire point to the existence of vested interests and the tendency for new sub-regional industries to gravitate towards them. In fact, Nigeria is large enough to contemplate an independent inward-looking policy of industrialization as a viable alternative to regional/sub-regional development. Congo, Kenya, and South Africa have equally similar potentials which could frustrate attempts at economic integration among African countries.
In practical terms, some socio-political and socio-religious diversities have culminated in Africa's social trauma within its economic integration arrangements, usually seen and largely exhibited in sharpening the social divisions among the various social and religious groups in and across state boundaries. Such social divisions relate to:
1. the widening distributional religious and cultural inequalities resulting in inter tribal, and communal clashes- Nigeria and Cameroon on Bakasi area.
2. ethno-religious primordality e.g. the issue of Muslims versus Christians in the concern for the implementation of the Sharia Muslim laws. This is not a Nigerian issue alone as it has caused some misgivings in several countries, tearing the union apart.
3. cultural degradation among existing tribes e.g. Hausa-Fulani-Yoruba differences in Nigeria. Similar examples exist in most of these African Countries which frustrate economic integration efforts.
Other political-cum-social diversity which have similar negative impacts range from the different colonial backgrounds (e.g. the Franco phone versus the Anglo phone zones in West Africa and Central/East Africa); diffential languages (e.g. French versus English) to indigenous ethnic differences .Onimode (1988) sees this trauma as correspondingly culminating in the disturbances of Africa's eco-political contour, with wide spread and growing repression, militating against economic integration of the African region. Onimode (1988) further rightly extends this submission to show that the social diversity emanating from these divisions but culminating in serious social crises have resulted in:
1. massive refugee problems e.g. the Sierra Leonean-cum-Liberian crisis
2. coups and counter-coups (e.g. Nigeria, Cote d' Ivoire and Togo), militating against democracy that reinforces economic integration
3. apartheid oppression and external subversion
All of these constitute some factors which frustrate historical economic integration efforts in Africa.
Integrative Blocks in Africa vis-a-vis Others (Current Initiatives)
As earlier indicated, African societies have recently increased their efforts at regional economic co-operative groupings. Of recent, in addition to the Cross-Border Initiative, many Independent African States have embarked on a number of bilateral and regional trade arrangements (RTAs) with the European Union (EU); Organisation for Economic Co-operation and Development (OECD); Africa, Caribbean and the Pacific (ACP); World Trade Organisation (WTO) etc. In Eastern and Southern Africa, there is the Preferential Trade Area (PTA) which transformed into the Common Market for Eastern and Southern Africa (COMESA) in 1994 with 20 countries as members. Apart from belonging to COMESA, most of the Eastern and Southern African countries also belong to other regional groupings such as Southern African Development Community (SADC), Indian Ocean Commission (IOC), Cross-Border Initiative (CBI), and EAC. The objective of COMESA is to attain completely free trade by year 2000, followed by a custom union in 2004 in compliance with the WTO agreements. The SADC is a sub-regional organisation of economic co-operation expected to intervene in diverse areas such as water issues, migration, drug and weapon smuggling. The grouping is also expected to enter into dialogue with other multinational groupings for the purpose of promoting trade and economic cooperation. Apart from COMESA, SADC and EAC, there is the IGAD formed in 1986 by Kenya and Uganda. IGAD as an organisation of co-operation for the countries in the Horn of Africa and is primarily responsible for combating drought and crop failures. Currently, the co-operative efforts have been broadened to include conflict prevention and management. In West Africa, there are several co-operative organisations such as the Economic Community for West African States (ECOWAS), West African Economic and Monetary Union (WAEMU), ECOMOG, UEMOA, UDEAC, etc. The ECOWAS was launched in 1975 and is currently, the largest regional grouping with about 16 member nations. Its objective is to create a joint market within the framework of a custom union. Nevertheless, its activities have been hampered with internal political instabilities in many of the member states, regional conflicts, and economic distortions. The ECOMOG is a monitoring group within the ECOWAS mainly responsible for conflict resolution and management. ECOMOG has intervened militarily and with some success in the armed conflicts in Liberia and Sierra Leone. The UEMOA and UDEAC are purely economic co-operative groupings in the French speaking West African States primarily responsible for establishing a customs union over a period of 12 years beginning from 1974.
Conclusions
It is apparent from the foregoing discussions that a lot of efforts have been put into sub-regional and regional economic grouping in Africa without much to show for them due to some problems. Such problems of African political and economic integration can be grouped into two broad areas which are political-cum- social diversity and economic problems. Political - cum- social diversity range from the different colonial backgrounds, different official languages to indigenous ethnic differences. These problems create constraints in human and political communication and thus frustrate positive actions (Diejomaoh, 1983). In addition, these problems have resulted into armed conflicts over the years with severe impact not only on the socio-economic development but on the population in several African countries. Moreover, the social diversity has made it difficult for many of the African countries to surrender their hard won sovereignty to regional integration. Further, the differences in colonial backgrounds and official languages have further polarised the African countries into different sub-regional political and economic groupings such as the CEAO, EAC, ECOWAS, IGAD, COMESA, SADC, UEMOA, ect., rather than having a single regional grouping like the EU. In addition to political problems, many African countries are bedeviled with a number of economic problems. These economic problems range from inadequate finance, similarity in production structures, high poverty rates, and corruption. The high spirits expressed towards regional integration by many African Governments have been constrained by inadequate finance. Thus, many sub-regional political and economic groupings in Africa are currently under-financed. Also, all but few African countries like South Africa, Kenya, Nigeria and Egypt have similar production structures and these have greatly constrained regional integration in Africa. For instance, the removal of tariff barriers have no effects on bilateral and multilateral trade among the African countries. In addition, the reliance on primary product exports by many African countries without concerted efforts at industrialisation are constraints on rapid development in many African States. Moreover, demographic growth is rapid and with greater impacts on poverty in many African nations. Further, official corruption is widespread and with negative effects on democratisation of many African States.
Of recent, 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. In spite of the above mentioned constraints in regional integration, 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 co-operative 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.
ADF3
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