The New Times (Kigali)

21 January 2013

Rwanda: Regional Integration Still a Challenge

Photo: Lauren Everitt/AllAfrica
Kenyan currency.

opinion

A new report by African Development Bank has proposed the establishment of a single currency in the Common Market for East and Southern Africa (Comesa) member countries, a move that is seen as a stepping stone in cementing regional economic growth. Dr. Donald Kaberuka, the president of the African Development Bank (AfDB), says the monetary union would be essential for economic integration (The New Times).

Prof. Manasseh Nshuti, another economist, argues that though it is an important initiative, this is not the right time to propose it. He advises that there is a need to first concentrate on ensuring strong financial independence of member countries. "We are not yet ready for the Comesa currency. We haven't even achieved the EAC Monetary Union that we have always been singing about," he said.

Both gentlemen are right and as former Ministers of Finance must know what they are talking about. While many have expressed pessimism on the viability of a common currency for African economic blocks, Dr. Kaberuka sees it as critical and encourages African economic block to think earnestly about economic integration. Prof. Nshuti is as disappointed as most other East Africans are by the failure of the EAC to fully implement the agreements of the three protocols - customs union, common market and monetary union. Reacting to Dr. Kaberuka's point, Prof. Nshuti suggests that it is not the right time. Time passed us long time ago.

The business community, through the East African Business Council (EABC), has held numerous meetings, some of them with Heads of State, to try to get governments to respect the signed protocols but somehow, hurdles and roadblocks persist. Despite the agreement to remove all trade barriers, non tariff barriers - the least complicated, these are still very much in place and Rwandan businesses continue to face all sorts of inconveniences and financial losses. So, who is responsible for ensuring the success of these agreements? To whom should we attribute their failure? These are difficult and somewhat sensitive questions to answer but it is not for lack of technical expertise. The obstacle is lack of political will. Our leaders need to ascend above nationalistic sentiments and embrace full regional integration for unless this is done we risk being economically dominated and irrelevant.

Recently, an African leader lamented over the wide gap between the local price of unprocessed coffee and its price on the world market after processing. Fifty years after independence, we still provide the West with cheap raw materials and, in turn, import expensive processed goods. It is a shame.

The leader could not have expressed the situation better when he said - "Africa must stop donating to Europe." Sadly, this situation has been going on for decades and it is not about to change. There are external and unfortunately internal forces with vested selfish interests that will not allow it.

A handful of countries in Africa that are doing well economically, are able to feed themselves and a respectable level of political debate and democracy exists. In another 30 years, unless integration is achieved, the small, poor and powerless states will face extreme political and social hardships.

What is currently happening in Mali and the Central African Republic will be perpetuated elsewhere as has been happening for decades. Our coffee and other commodities will continue to be exploited by the West and now the East as long as we continue to act as individual countries. The Economic Partners Agreements (EPAs) have not succeeded because we have failed to negotiate with the EU as regional blocks. The power of unity can be seen in the European Union (EU) where stronger economies are bailing out weaker ones in order to maintain the union and the Euro.

Another seemingly insurmountable challenge to self economic determination is what has been discussed at length in the media recently - aid dependency. Development "Partners" - the external forces, have their own agenda that is not necessarily in Africa's interest. The underlying factor for our failure to achieve integration and economic emancipation, sadly, is the influence and control the external forces have over the internal forces. It will be extremely difficult to free ourselves from foreign aid unless we integrate and deal with the development "partners" as a larger entity, which will enable us to replace aid with trade as equal partners.

While Kaberuka's recommendation for economic integration is indeed desirable and crucial for the future of Africa, I am afraid it may require a reincarnation of visionaries like Kwame Nkrumah or Julius Nyerere to attain it.

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