Status of Africa integration according to the 11th edition of the Assessing Regional Integration in Africa (ARIA XI) report

The United Nations Economic Commission for Africa (UNECA), in collaboration with the African Union Commission (AUC) and the African Development Bank (AfDB), has released the 11th edition of its flagship biennial publication "Assessing Regional Integration in Africa" (ARIA XI). This report serves as a critical resource for evaluating Africa's progress in regional integration and provides evidence-based policy guidance for decision-makers across the continent.

ARIA XI's primary focus is to analyze Africa's advancement towards achieving the African Economic Community (AEC), the ambitious long-term objective of creating a single continental market with a common currency and full economic and political integration, as stipulated by the 1991 Abuja Treaty. The previous edition (X), released in 2021, focused on Africa's services trade liberalization and integration within the context of the African Continental Free Trade Area (AfCFTA). The delay in the publication of the XI edition (due for 2023), was necessitated by a comprehensive review and revision of the methodology used to construct the African Regional Integration Index (ARII). This revision was prompted by criticisms from Regional Economic Communities (RECs) and Member States, which highlighted the ARII's primary reliance on comparative analysis and its insufficient coverage of various integration dimensions. In response to this feedback, the AUC initiated an inclusive study in October 2016, leading to the development of the African Multidimensional Regional Integration Index (AMRII) in 2020. The AMRII incorporates a more elaborate methodology, featuring 8 dimensions and 33 indicators, along with the introduction of thresholds for these indicators. It also proposes additional indicators to monitor RECs and countries regarding their implementation delays of decisions and adherence to Agenda 2063 and the Abuja Treaty. Despite the development of the AMRII, ARIA XI continues to utilize the ARII methodology to calculate integration levels among RECs. This methodology assesses five key dimensions of integration: 1) Trade Integration; 2) Productive Integration (value chains); 3) Infrastructure Integration; 4) Financial and Macroeconomic Integration; 5) Free Movement of People.

The ARII indicators employed in the report are a mix of quantitative data (e.g., trade flows, electricity grid connections) and qualitative assessments (e.g., visa openness, policy alignment).

The ARIA XI key findings indicate a nuanced picture of Africa's regional integration efforts:

a) Slow but measurable progress towards AEC: Africa is making gradual but discernible progress towards the AEC, particularly in establishing Free Trade Areas (FTAs) and Customs Unions at the REC level, though implementation remains uneven.

b) AfCFTA as a catalyst, but deeper integration needed: The AfCFTA represents a significant advancement towards the efforts of economic integration in Africa. However, the report stresses the necessity of pursuing deeper integration efforts beyond tariffs, particularly in critical areas such as digital trade, infrastructure development, and regulatory cooperation.

c) Persistent challenges: Overlapping membership among RECs continues to be a persistent impediment, which, coupled with weak institutional frameworks within these communities, significantly slows policy harmonization. Crucially, the report highlights that national policies often conflict with regional goals, further hindering integration. Policy misalignment and weak enforcement mechanisms are identified as major ongoing challenges.

With regard to REC performances, the report provides a differentiated assessment:

The East African Community (EAC), Economic Community of West African States (ECOWAS), and Southern African Development Community (SADC) are identified as top performers in overall integration. The EAC generally ranks highest, particularly in trade and the free movement of people. ECOWAS demonstrates strong performance in financial and macroeconomic integration, aided by coordinated monetary frameworks. SADC excels in infrastructure integration, notably through its transport corridors and energy pools. The Common Market for Eastern and Southern Africa (COMESA) shows strong performance in productive integration and value chain development.

In terms of lagging RECs, the Arab Maghreb Union (AMU), Community of Sahel-Saharan States (CEN-SAD), and Economic Community of Central African States (ECCAS) score lower due to factors such as political fragmentation, lack of enforcement, and underdeveloped cross-border infrastructure. AMU, CEN-SAD, and the Intergovernmental Authority on Development (IGAD) are specifically noted for minimal progress in forming FTAs.

Analysis of regional trade patterns across Africa reveals a persistent trend: Regional Economic Communities (RECs) generally exhibit a higher proportion of trade with extra-continental partners than with fellow African nations. At continental level, intra-regional trade is evaluated at 16% (see figure 1 below, last column). Interestingly, among the surveyed RECs, IGAD appears to demonstrate the highest intra-African trade proportion at 36%. This finding warrants closer scrutiny, as it is hard to believe, being in contrast with conventional perceptions of levels of regional trade integration in the continent and considering that IGAD has countries like Djibouti, Eritrea, Sudan, Somalia and South Sudan that notoriously have little exports to other African countries. Moreover, IGAD has not even established a Free Trade Area (FTA), as explained above, and is indicated in the report as the REC with the lowest institutional quality in the entire continent (page 154). While the strong trade integration performances of some of IGAD members such as Kenya and Uganda likely contribute significantly to this percentage, this does not explain such rating. The inclusion of data regarding Djibouti, given its strategic port location and the high level of re-exports directed to other highly import-dependant African countries, especially Ethiopia, could disproportionately influence IGAD's role in overall intra-African trade statistics. Following IGAD, the East African Community (EAC) registers the next highest intra-African trade proportion at 28%.

Figure 1: RECs’ merchandise exports to world regions, average 2019–23 (per cent)

ARIA XI's main policy recommendations focus on several key areas:

a) Strengthening Coordination: Enhance coordination mechanisms between the AU and RECs (in this regard, it must be noted that on 20 July 2024, the eight AU-recognised African RECs launched a common digital platform to facilitate information sharing, which however seems quite inactive).

b) Accelerating AfCFTA Implementation: Expedite the implementation of the AfCFTA, with particular emphasis on services and investment frameworks.

c) Policy Streamlining: Streamline policies and legal frameworks to facilitate the progression from FTAs and Customs Unions towards a full economic community.

d) Digital Connectivity: Increase digital connectivity, enhance cross-border payment systems (e.g., PAPSS), and harmonize customs procedures.

In conclusion, the report argues that the realization of the African Economic Community, as envisioned by the Abuja Treaty, is achievable. However, this hinges critically on governments' sustained commitment to meaningful reforms, deeper cooperation, and the effective alignment of national interests with the overarching continental integration vision.

Lastly, a personal note of gratitude: thanks for mentioning our CEO Danilo Desiderio in the list of external reviewers in the 'acknowledgements' section.