Africa: Regional Integration

@PATANG @PTAN @PaAN @PATANG @PA VISU VISUAL VISUA VIS VISUAL @PATANG Africa: Regional Integration Intra-regional trade flows and convergence of trade blocks within Africa... PATANG VISUAL Historical look at attempts of Pan-African Economic development... APATANG VISUAL SusUALTI 1973- 1991 1958-62 Union of African Formation of trade groups In the 1970s African states started to form Treaty of Abuja The Treaty establishing the African Economic States For a brief period Ghana, Guinea and Mali merged Community (AEC). DATANG OPATANG trade groups or regional The AEC offers a framework for continental integration and plans to established continent-wide single VISUAL VISUALG economic communities to form the Union (RECS). First of which, was the Mano River Union. of African States currency. 1970s TANG ATANG SUAL 1990s 2010s 1960s AL 1980s 2000s 1963 1980 2002 Organization of African Unity (OAU) African Union (AU) Lagos Plan of Action An OAU initiative to Established from the Sirte Declaration with 54 countries, as a successor to the OAU. Its objectives are to establish the African Union, create an African Economic Community, African Central Bank, African Monetary Union, African Court of Justice Established with 32 promote self- sufficiency on the continent and countries and one of its @F initial objectives was to co-ordinate and NG @DA VISU intensify the co- operation of African increase social and economic development across the region and Pan-African Parliament @PATAN Regional integration has been a continental objective sinceATANG independence - Many of Africa's trade blocs have been in existence VISUAL since the 1970s... COMESA* OPATANG PATANG VISUAL Burundi Comoros DRC Malawi Mauritius Rwanda Seychelles Sudan Swaziland Uganda Zambia UMA 1994 1994 1994 1994 Juisual 1994 1994 1994 1994 1994 Algeria Libya 1989 Djibouti Едypt 1994 1994 1994 1989 1989 1989 1989 Eritrea Ethiopia Kenya Libya Madagascar Mauritania 1994 1994 2005 1994 1994 Morocco 1994 Tunisia Zimbabwe 1994 DA ATA ECOWAS EAC* Benin Burkina Faso Cape Verde Ivory Coast Gambia Ghana Guinea Guinea-Bissau 1975 1975 1975 1977 1975 1975 1975 1975 Liberia Mali 1975 1975 1975 Burundi 2007 Kenya Rwanda 2001 2007 Niger Nigeria Senegal Sierra Leone Togo 1975 ODATA VISUAL I Uganda Tanzania 2001 1975 1975 2001 1975 Notes SADC* UMA = Arab Magreb Union ECOWAS = EconomicANG Community of West Africa States COMESA = Common Market for Eastern and Southern Africa ECCAS DATAN VISUALT 1992 DRA VISU 1992 Namibia Angola Botswana 1992 1992 Seychelles South Africa 2007 1999 Angola Burundi Congo DRC 1983 DRC 1994 1983 1983 Lesotho 1992 Swaziland 992 Eq. Guinea Gabon Sao Tome & P. 1983 ECCAS = Economic Community Cameroon 1983 1983 Madagascar 2005 Tanzania 1992 1983 1983 of Central African States CAR 1983 Malawi 1992 Zambia 1992 SADC = Southern African Chad Mauritius 1992 Zimbabwe 1992 Mozambique 1992 Development Community EAC = East African Community atereNo VISUA *The government of the 26 member states of COMESA, the EAC and SADC agreed in October 2008 to establish a grand Free Trade Area (FTA) which is now referred to as the Tripartite FTA (T-FTA) The ultimate goal is for the continent to operationalize the African Economic Community (AEC) by the year 2028... @PATA VISUAL @PATANG @DATA OPATANG VISUAL VISUAL VISU 1. Creation of regional blocs in regions where such do not yet exist 2. Strengthening of intra-REC integration and inter-REC harmonization 3. Establishing of a free trade area and customs union in each regional bloc 4. Establishing of a continent-wide customs union (and thus also a free trade area) 5. Establishing of a continent-wide African Common Market (ACM) 6. Establishing of a continent-wide economic and monetary union (and thus also a currency union) and Parliament VISU TA AL ANG ATANG SUAL Value of intra- trade between active Regional Economic Communities (RECS) aDA (Exports, $ millions) COMESA UMA +18% @PATAY 8,286 +14% 6,348 3,222 3,977 2,708 1,878 1,518 1,041 2000 2005 2009 2010 2000 2005 2009 2010 ECOWAS EAC +13% +11% 9,105 5,546 7,320 1,572 1,997 2,728 689 1,075 @DAT 2000 2005 2009 2010 2000 2005 2009 2010 VISUA SADC ECCAS +11% +11% Over the course of the Tast 16,556 561 12,691 decade the state of intra- 274 440 9,792 191 5,769 African trade has been increasing its share of the continent's regional trade... 2000 2005 2009 2010 2000 2005 2009 2010 @PATANG @PETANG @PATANG @PATANG @PATANG @PA VISUA VISUAL VISUAL VISUAL VISU Challenges to inter-regional trade integration Many of the trading blocs in Africa lag behind their competitors in terms of critical infrastructure needed for regional trade integration... TANG StsUAL @PATANG @PATAN VISUAL VISUAL Population (millions) 320 456 )NAFTA 310 Burden of customs 300 procedure** "Highly developed port and rail infrastructure 290 a 280 Africa 4 270 AFRICA 1,400 ASEAN 4 260 INDIA 250 NAFTA 4 240 309 502 )EU 230 USA EU 1,227 1,337 CHINA 60 MERCOSUR 50 40 India 4 SADC 30 MEROSCUR O247 273 COMESA ANG JAPAN 120 20 China 5 451 10 591 EAC 145 ECOWAS Japan 302 ASEAN ECCAS 143 -10 UMA 87 USA -20 -30 H PATANG @DA 0.0 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 VISUAL VISU Quality of port infrastructure** Behind the Border issues Institutional Architecture Protectionist tendencies Lack of clear mandates for the RECS Need to balance regional interests with national ones – TAN regional projects require that sometimes political leaders L give up some sovereignty Transit obstacles such as trucks spending too much time just crossing borders The importance of non-tariff barriers (NTBS) should not a be underestimated. Africa's integration record is marked by grand schemes, weak legal and institutional foundations for a rules-based dispensation of regional integration, and an implementation record that does not demonstrate among some African countries @PATANG VISUAL Conflict between national and regional interests Infrastructure challenges facing coastal countries Transit obstacles such asAG trucks spending too much time just crossing borders ENG OPETANG ISUAL Data as at 2010 **(1=extremely underdeveloped to 7=well developed and efficient by international standards) DATANG @PATANG @PA serious commitmentTANG @PATANG VISUAL VISUAL VISUAL VISUAL Megacities multiply... Sub-Saharan African cities (projected population, millions) Africa is home to some of the fastest growing megacities on the planet have a real potential for positive spill-over effects on other African nations @PATA @PATANG @PATANG VISU VISUALG VISUAL VISUA 18.9 2010 2025 projection 14.5 8.9 7.3 7.0 6.1 DA7 VISU NGE ATA SUAL DE VIS ADA VISL 3.2 4.2 3.4 4.8 8.4 10.8 Nairobi Dar es Salam Abidjan Ivory Coast Luanda Kinshasa Lagos Nigeria Kenya Tanzania Angola DRC OPATANG QDATANG OPETANG, @PATANG @PELENG @PATAN VISUAL VISUAL These cities require a massive 'quantum leap" in infrastructure development which gives way to financing opportunities - The demand for finance outstrips the supply Good infrastructure provides the building blocks for intra-regional trade in Africa allowing the A continent to be more competitive in global markets - direct relationship between infrastructure and economic growth OPATANG Sto VISUAL Rabat Tripoli Alexandria Casablanca Africa's growth engines Cairo Benghazi DATANG VISUAL @PATANG @DATAN VISUAL DATANG ISUAL VISUAL Several 'gateways' exist to drive rising prosperity and the economic rebirth of the continent... Khartoum Kano NG Abidjan Africa and the Middle East cu about 50% of the Frontier Market investment Port Harcourt currently represent Lagos Nairobi Projected 2020 GDP* Selected cities universe Kinshasa Dar es Salam Urbanization, expanding labour force and the rise of the middle-class >$100 billion @PATA ODA VISU N Luanda African consumer will fuel economicVISUAL growth across the region... $50-$100 billion $10-$49 billion Pretoria *Nominal GDP Johannesburg @PATANG @PATANG @PATANG @PATAN Durban VISUAL VISUAL VISUAL VISUAL Cape Town Port Elizabeth Six key messages for regional integration @PATANG @DATO VISUA 1 APATANG DA VISI VISUAL VISUAL The private sector has a critical role RECS need re-structuring so as to move towards Customs Union. The status quo is undesirable and dangerous. to play in promoting regional integration 6. DATANG VISUAL It is important to TA adopt a grassroots L approach in order to promote the ownership of \regional projects Creating a stable, peaceful climate in Sub-Sahara Africa is of Access to finance the utmost importance. ГА A NG Regional Integration opportunities NG Without a political climate of stability, security and a good business environment, there can be no productive private Increase capacity of Filling the infrastructure gap; RECS sector DA ISU Need for a Major re-tooling and skills building for RECS, governments, sub- regional institutions and donors is needed more participatory Institutional Architecture @PATANG @PATANG TIBUAL IN VISUAL VIŠUALIIN VISUAL Source: World Bank, World Economic Forum, NEPAD, Economic Commission for Africa, African Development Bank, UNCTAD, OAU, African Union, Economic Commission for Africa, Financial Times, UN World Urbanization Prospects, McKinsey & Company, Ernst & Young @PATANG Infographic designed by: VISUAL in association with: @BIGNGO budgii budgfT IDEAS Rail lines (total route-km*) OCTOBER 2012