Thursday, October 06, 2022
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Desiderio Consultants Ltd. is a think tank and a network of independent professional international development consultants established to promote and influence customs & trade-related policies in African nations to achieve trade facilitation reforms aimed at improving international and regional trade
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Unstoppable Africa, but the path to economic integration will not be easy

Regional integration is not a one-off event, but a process. In a speech held on 18 September during the United Nations General Assembly week from 18-19 September 2022, the former President of Tanzania explains the path through which economic cooperation between States progressively evolve into the various steps of economic integration, from preferential free trade areas, customs unions, common markets, to monetary unions. Based on the experience of the East African Community (EAC) - one of the most integrated Regional Economic Communities (RECs) on the African Continent - the speaker draws parallels with the AfCFTA, which represents the first step in an integration process that should culminate in future into an Economic and Monetary Union, i.e. an area where goods, services, persons and capitals can move freely (Common Market), further characterised by the adoption of a single African currency administered by an African Central Bank, as described in the Abuja Treaty (1991) which sets up a time-horizon of 34 years for achieving this final stage of economic integration among African States.

More precisely, the AfCFTA represents the 3rd stage of the process outlined by the Abuja Treaty, which at art. 6 envisages the future evolution of the Free Trade Area towards a Customs Union with a Common External Tariff.

Not many people know that when the Treaty establishing the East African Community came into force on July 7, 2000, the three East African countries of Kenya, Uganda and Tanzania decided the creation of a deeper form of economic integration: a political federation of East African states to be achieved within 2013 (i.e. a process aimed at creating a Federal State with a unified political authority, capable of coordinating policies among the EAC Partner States, which will become Constituent States within the federation, remaining autonomous in all non-federal matters).

However, despite the EAC integration has passed two critical milestones, i.e. the establishment of a customs union in 2005 and of a common market that became operational in 2010, the political federation stage is still far to be achieved. A limited progress has also characterized the achievement of the monetary union, which the EAC Secretariat plans will be in operation by 2024.

As observed by Kaburu and Adar (2020), the success of every attempt of regional integration depends not only on the political will of States, but also on the involvement of the people, who are the ultimate actors and beneficiaries of such a process. A survey conducted by Afrobarometer in Kenya recently revealed that the majority of Kenyan citizens have heard little or nothing about the EAC plans to establish a confederation. Awareness is also lacking among citizens of the other EAC Partner States, with the consequence - observes the Afrobarometer report - that the low levels of consensus and support for the EAC political federation risk to compromise the achievement of such integration step. Similar worries also concern the AfCFTA, as more education is needed not only for African enterprises, but also for the civil society, in order this integration step to be concretely achieved.

Interesting insight are offered by the speaker on the lack of infrastructure (there is no integration without roads and - we add - roads are integrative only if they are secured and safe, which is not always the case in Africa), the incidence of Non-Tariff Barriers, and the involvement of the private sector, three key challenges that risk to delay the concrete operationalization of the AfCFTA if not addressed and solved immediately and urgently.

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