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Emergent Africa Evolution of Regional Economic Integration

Francis Mangeni

Common Market for Eastern and Southern Africa Lusaka, Zambia

Calestous Juma

Harvard Kennedy School Cambridge, USA

Headline Books, Inc. Terra Alta, WV

Emergent Africa Evolution of Regional Economic Integration by Francis Mangeni and Calestous Juma copyright Š2019 Francis Mangeni and Calestous Juma All rights reserved. No part of this publication may be reproduced or transmitted in any other form or for any means, electronic or mechanical, including photocopy, recording or any information storage system, without written permission from Headline Books, Inc. Disclaimer: The statements and views in this book are those of the authors and should not be attributed to any organizations with whom the authors are affiliated. To order additional copies of this book or for book publishing information, or to contact the author: Headline Books, Inc. P.O. Box 52 Terra Alta, WV 26764 www.HeadlineBooks.com Tel: 304-789-3001 Email: mybook@headlinebooks.com ISBN 13: 9781946664464

Library of Congress Control Number: 2018954960


We dedicate this book to Joseph Nye Jr. and Adebayo Adedeji for their intellectual, diplomatic, and institutional leadership

I believe that what we do today depends on our image of the future, rather than the future depending on what we do today. —Ilya Prigogine, 2004

Acknowledgments We are very grateful to a large number of people who have directly or indirectly contributed to the research and writing of this book. We are particularly grateful to Katherine Gordon, Katie Bauer and Sandy Tritt for their research and editorial support at different stages of this book. We also benefited immensely from Devon Maylie’s editorial suggestions in the early phases. Kwame Rugunda provided invaluable research assistance, and Juma Mwapachu offered inspirational guidance on the functioning of regional bodies. We want to thank Amelia Kyambadde for her advice on relations between national and regional bodies. We received extensive comments and input on various drafts of this manuscript from Seth Gor, Stephen Karingi, and Meshack Kinyua. We are grateful to the Schooner Foundation for its financial support for part of the writing of the book; we want to thank Vincent Ryan and Cynthia Ryan of the Schooner Foundation for their commitment to African development and for their continuous encouragement during the drafting process. We are also grateful to the FIATA Foundation-Vocational Training and FIATA’s Region Africa and Middle East (RAME) for making it possible to print and have an open access version of this book. We have benefitted from extensive moral encouragement during the preparation of this manuscript and would like to acknowledge the support of Harvard Kennedy School Dean Douglas Elmendorf, Archon Fung, Suzanne Cooper, Issa Baluch, Kevin Oh, Tracey Lafferty, Abby Vogel, Bryana Carey, and Karina Johnson. The quality of this book was significantly improved by the thoughtful and helpful comments that we received from anonymous reviewers. Special thanks go to Alison Field-Juma for her support and for overseeing the final stages of the publication of this book. Her determination and attention to detail greatly improved its quality. Thanks to Cathy Teets and the staff at Headline Books for publishing this book.


Table Of Contents Introduction.......................................................................................................9 PART I: A COMMON VISION.....................................................................23 1. Emergent Africa.......................................................................................24 Chaos, uncertainty and experimental learning..........................................26 Africa far-from-equilibrium......................................................................28 Creativity, complexity, and irreversibility.................................................33 Africa’s divergent globalization................................................................36 Conclusion.................................................................................................39 2. Visualizing regional integration..............................................................41 Political and economic pan-Africanism....................................................42 Customs union theory and free trade.........................................................47 Origin of the African Economic Community Treaty.................................48 Framework and roadmap for economic integration..................................52 Conclusion.................................................................................................58 PART II: EXPERIMENTATION AND LEARNING..................................61 3. Regional economic communities.............................................................63 Experimenting with regional communities...............................................65 Progress made by the regional economic communities............................67 Regional entry points.................................................................................69 Functional convergence.............................................................................83 Conclusion.................................................................................................85 4. Building a regional trade regime............................................................87 A regional inspirational model..................................................................88 COMESA and the Economic Integration Development Strategy.............95 Concerns about the COMESA customs union..........................................96 Challenges and convergence.....................................................................99 Conclusion...............................................................................................113 5. Trade facilitation....................................................................................115 Meaning and importance of trade facilitation.........................................116 The COMESA FTA framework for trade facilitation .............................118 COMESA trade facilitation programs.....................................................121 Negotiating the TFA – Africa’s concerns and priorities..........................124 Freight and logistics................................................................................125 Conclusion...............................................................................................131


6. International trade relations.................................................................133 Africa’s strategies for international trade................................................134 Trade relations with the European Union ...............................................138 Bilateral trade relations with India..........................................................148 Trade relations with the United States.....................................................157 Africa’s relations with China...................................................................160 Conclusion...............................................................................................166 PART III: GROWING ECONOMIC COMPLEXITY.............................169 7. The tripartite free trade area................................................................172 Preparations for the Tripartite negotiations.............................................173 The negotiation process...........................................................................179 The text and scope of the agreements.....................................................187 Trade remedies........................................................................................194 Conclusion...............................................................................................202 8. Continental consolidation......................................................................203 The right to development........................................................................204 The role of regional economic communities...........................................206 Going continental....................................................................................208 Negotiating the Continental FTA.............................................................220 Financing the African Union...................................................................231 Conclusion...............................................................................................234 9. Governing economic complexity...........................................................235 Transforming economic structures..........................................................235 Financing industrialization......................................................................244 Governing uncertainty.............................................................................249 Lessons learned.......................................................................................254 Conclusion...............................................................................................265 10. Outlook.................................................................................................266 Taking stock.............................................................................................266 The way ahead.........................................................................................268 Conclusion...............................................................................................271 Endnotes........................................................................................................273 Index...............................................................................................................296



Introduction In 2016, the United Kingdom stunned the world with a razor-thin referendum decision to withdraw from the European Union (EU). This was partly because of a perceived loss of sovereignty to the regional integration body. That year, the United States elected Donald Trump as president, partly because of the growing appeal for economic nationalism and partly due to a rejection of international trade agreements. Events in the UK and the US were indicative of a larger global challenge to late 20th century globalization trends and the associated rising unemployment and deepening economic inequality. Though framed as a rejection of globalization, the real objections were about the impact of international market liberalization and the institutions created to support it. While sections of the EU appeared to be walking back from regional economic integration, Africa was moving in the opposite direction. That same year, Morocco re-joined the African Union (AU). It had withdrawn from the AU over sovereignty disputes regarding Western Sahara in 1984. Morocco’s return was largely influenced by the perceived benefits of being part of a more integrated Africa.1 Despite the rise of economic nationalism around the world, Africa continued to pursue its long-standing goal to create a Continental Free Trade Area (AFTA). The Treaty of Rome, upon which the EU was founded, was signed 19 days after Ghana gained independence in 1957—the first African country to do so.2 Ghana’s founding president, Kwame Nkrumah, hitched his nation on a panAfrican wagon, thereby marking the origins of Africa’s regional integration efforts. Other than sharing some common names for various EU and AU internal organs, the similarities are negligible. Indeed, “the most critical features of the European regionalization process, from the gradual stepwise approach towards shared sovereignty to the focus on trade integration and social cohesion, are largely absent from Africa’s regionalism, which presents unique characteristics that are often overshadowed by traditional analyses.”3 The post-colonial history of Africa is largely about the most complex and elaborate regional integration project undertaken in human history. It covers 55 countries with a population of more than a billion people. 9

The EU sought to establish its place in a world governed by notions of global equilibrium. 4 Africa, on the other hand, charted a new path to integrate its fragmented regions and economies. From the outset, African independence leaders embraced the new reality that the continent was not in equilibrium and that the conditions offered opportunities for political and economic integration. They laid out a pan-African vision pursued largely through sub-regional experiments. The regional integration institutions created during the process played an important role in catalyzing novel responses to regional challenges. Based on the lessons arising from the experiments, they pressed for integration by building a more complex and robust region. Their efforts facilitated the transition from postcolonial chaos to a more ordered region that would foster prosperity for its people. On the basis of progress achieved over the years, this book takes a positive outlook on economic integration in Africa. We argue that economic integration in Africa has evolved through a process of experimentation and learning, departing from a status quo characterized by colonial relations and exportation of primary products towards a “minds not mines� ethos. Optimists welcome the economic, legal, political, and administrative institutional frameworks that Africa has designed over the years to change the colonial dependency status quo by seeking political and economic emancipation, social economic transformation, and the progressive evolution of these structures in adapting to challenges and emerging priorities. They celebrate the achievement of landmarks already inchoate in the long-term vision and roadmap and actively posit lessons learned and new pathways forward. Pessimists, on the other hand, see the low levels of intra-regional trade and social economic transformation and blame it on failure of regional economic integration and other development programs as something inherent to Africa. This challenge from the pessimists is understandable, partly as impatience and righteous anger at economic and political governance failure, and partly as unacceptably slow program implementation that has minimal to no impact. Unfortunately for both optimists and pessimists, development work is almost certainly slow. And it is more painful with missed opportunities and bad governance that endures despite the will for change. The non-linear but gradual, progressive nature of transformation and social economic development offers opportunities for creativity, if properly utilized. The story of contemporary regional economic integration in Africa so far can be structured into three phases that progressively grew from one into the other but were also interspersed in some respects. The long-term framework provided room for specific initiatives and programs to be adopted and make progress towards the overarching vision. The first phase, roughly from Ghana’s independence in 1957 to the commencement of the African Economic Community treaty in 1994, was 10

characterized by decolonization wars and the adoption of a long-term vision for political and economic emancipation. These were mapped out and codified into agreements that were improved over the decades and supported by a continental institutional framework. Ghana’s independence created a domino effect in the 1960s and 1970s. The Organization for African Unity was established by charter on May 25, 1963. Given the disparate people and young nations of Africa, developing a continental vision and roadmap with a common institutional framework was itself a monumental achievement. During this first phase, the overarching and immediate continental priority was decolonization, which was achieved in 1990 with the independence of Namibia. Work on economic blueprints also commenced, resulting in the adoption of the Lagos Plan of Action in 1980 and the treaty establishing the African Economic Community in 1991, which entered into force in 1994. The second phase, roughly 1975 to 2012, witnessed experimentation and learning through the establishment of institutions and the implementation of programs at the regional level. Key priorities in the 1980s and 1990s focused, among other things, on good political and economic governance including democratization, peace and security, and growth through economic liberalism and trade supported by larger markets. In Africa, the need for establishing or strengthening existing regional economic communities was strongly felt as an appropriate response to these priorities. The formation of the Economic Community of West African States (ECOWAS) in 1975 and subsequent revisions to its treaty marked a turning point. The Preferential Trade Area of Eastern and Southern Africa was established in 1981. The Southern African Development Community (SADC) was formed in 1992 and the Common Market for Eastern and Southern Africa (COMESA) in 1994. The East African Community (EAC) was revived in 1999. By the year 2000, there were more than 14 regional economic organizations in Africa, marked by considerable overlapping membership, which highlighted the need for better coordination and convergence of the various regional programs. This led to initiatives for mergers or recognition of efficient regional bodies and a decision at the continental level in 2006 for a moratorium on the formation of new regional bodies. The third phase, beginning in 2012 with Tripartite and AFTA negotiations, started with an earnest consolidation of some regional economic communities (RECs). In 2012, COMESA, EAC, and SADC started negotiations to adopt and implement common trade, industrial, and infrastructure programs in order to promote convergence and put the benefits of regional economic integration on a higher scale beyond their existing three individual regional frameworks. The agreement establishing the Tripartite FTA was signed on June 10, 2015, after three and half years of negotiation, and the Continental FTA was established on March 21, 2018, after two and a half years of negotiation. 11

The trajectory of regional integration in Africa—particularly the decolonization wars, continental economic blueprints, and regional body creation—pinpoints the inescapable lesson that new pathways are feasible but require institutional engineering, creativity, and initiative. This starts with individuals aware of the disequilibrium who harness social, political, and intellectual forces to bring about change. The high number of independent African countries gave the continent disproportionate strength in diplomatic negotiations. But the sovereign autonomy of African states denied the continent the economic clout that was needed to match its numerical capabilities and geographical vastness. It is only through greater economic strength that the continent can hope to realize its full potential as a notable international actor. Africa is a continent of an apparent paradox. On the one hand, it is endowed with abundant natural resources that have defined its image and place in the global economy. But on the other hand, it has some of the poorest nations on earth. One would assume that, given the circumstances, newly independent African states would have aggressively sought to uplift their economic performance and improve the wellbeing of their people through adding value to their natural resources. Yet proposals for resource-led industrial transformation were not developed until much later in the evolution of Africa’s economic integration.5 Unlike other integration initiatives that focus almost entirely on trade, Africa’s efforts include infrastructure development and industrialization. The integration is a way to facilitate development by consolidating national and regional markets to reap the benefits of larger economies. Trade is thus viewed as a tool for promoting prosperity through industrial development.6 In his critique of the neo-classical approach to economic integration, Oliver Saasa argues that “increased, planned, and coordinated industrial infrastructural development that recognizes the efficiency and development role of industrial complementarity, specialization, external economies, and economies of scale should be the primary goals of . . . regional integration efforts. Thus, trade expansion . . . should be perceived as a tool for expanded industrial production and not the other way around.”7 Much of the discussion on the benefits of regional integration focuses on the ability to benefit from economies of scale and learning effects associated with increased manufacturing outputs and cost reductions.8 It has been rightly argued that Africa’s small and fragmented markets do not allow producers and consumers to benefit from economies of scale and learning effects. The more important benefits of large markets lie in the geometrical scaling arising from engineering principles. Such scale effects are integral to the geometry and the physical nature of the world.9 In fact, the benefits of geometrical scaling are often mistaken with economies of scale. Because of the inherent benefits of geometrical scaling, chemical and processing plants show larger benefits of 12

economies of scale than, say, assembly plants. In the case of chemical plants, for example, “the cost of pipes varies as a function of radius whereas the output from pipes varies as a function of radius squared. Similarly, the cost of reaction vessels varies as a function of surface area (radius squared) whereas the output of a reaction vessel varies as a function of radius cubed.”10 Increased manufacturing as a result of larger markets extended the benefits of geometrical scaling to the transportation sector. “Transportation equipment— such as oil tankers, freighters, industrial trucks, buses, trains, and to some extent aircraft—all benefit from increases in scale. In addition to the benefits from increasing scale in engines, the reason is that the cost of the transportation equipment is largely a function of their outer surface area (e.g., dimension squared) while the output is a function of volume (dimension cubed).”11 What may appear as modest increases in the size of transportation equipment yields significant benefits due to the inherent natural properties of geometrical scaling. African countries have already reaped great benefits from geometrical scaling that involves the use of integrated circuits (ICs) in devices such as mobile phones, digital cameras, and computers. Reducing the scale of transistors and storage regions, for example, has resulted in improvements in performance and reduction in price by many orders of magnitude. The scaling led to the emergence of “personal and portable computers, mobile phones, and the Internet industries, as well as new industries within broadcasting, telecommunication, health care (including biotechnology), education, and financial sector.”12 The increasing integration of electronics in a wide range of process technologies helps to maximize the benefits of scaling either through scaling up or reducing the scale. The implications of geometrical scaling are profound for Africa’s regional integration efforts. They underscore the importance of focusing on industrialization as a way to realize the benefits of larger markets. The capital costs of investment in chemical processes rise much slower than output as the physical plants are scaled. In assembly plants, however, physical scaling is rarely increased, and the common practice is to replace human labor with machines. This engineering insight also provides additional justification for investing in engineering capabilities and entering into manufacturing. It also gives indications of the kinds of industries that are likely to have significant welfare effects from regional integration. Much of the industrial learning associated with geometrical scaling occurs outside production settings. This general-purpose knowledge is transferrable to other industries more readily than the learning gained in production. Knowledge of geometric scaling gained in brewing, for example, can be extended to other sectors such as pharmaceutical production. It is often argued that African countries with small markets should instead focus on exporting raw materials and using the revenue to import manufactured 13

goods. But right from the beginning, African decolonization champions focused not so much on the material wealth of the continent but on its political unification as a prerequisite for economic transformation. This outlook is engraved on the plinth of Ghana’s first president, Kwame Nkrumah, outside Parliament House in Accra: “Seek ye first the political kingdom and all other things shall be added unto you.” With its biblical derivation, the injunction has come to play an equally spiritual role in African political affairs. Underlying this vision was a deep commitment to the ideology of pan-Africanism. The first major indication that Africa was taking regional economic integration seriously came with the adoption of the Tripartite Free Trade Area Agreement in June 2015 in Egypt. The agreement covers 27 nations, a population of 720 million people, and GDPs worth US$1.3 trillion. It covers the Common Market for Eastern and Southern Africa, the East African Community, and the Southern African Development Community. The area of the TFTA is nearly twice the size of China or the United States, spanning 16.7 million square kilometers. The agreement promises to do for the continent’s economic freedom what the formation of the Organisation of African Unity (OAU) in May 1963 did for Africa’s decolonization and political freedom. The agreement signaled the possibility of achieving wider continental integration. Negotiations for the creation of the African Continental Free Trade Area (AFTA) were launched immediately following the signing of the TFTA. The AFTA covers more than a billion people in 55 countries with a combined GDP of over US$3.4 trillion. The power of pan-Africanism as a guiding vision for the continent’s development is widely studied, mostly as an aspirational phenomenon. At worst, pan-Africanism has often been seen as a poor imitation of American federalism or European integration. Neither of these perceptions reflect the profound nature of the role that the ideology of pan-Africanism played in shaping the continent’s economic transformation. To understand the role of pan-Africanism in the evolution of the continent, it is important to pay less attention to its tortured past and more attention to its drive for integration. In her book Bourgeois Dignity: Why Economics Can’t Explain the Modern World, Deirdre McCloskey argues that dignity and freedom played the most critical role in the transformation of the Western World.13 To her, it is liberal ideas that served as the fertile ground upon which innovation sprouted. In effect, the transformation of the Western World was a result of the power of ideology, not of material wealth, colonial conquest, or accumulation of capital. This view is augmented by Joel Mokyr, who stresses in A Culture of Growth the societal beliefs, values, and preferences that can transform behavior. This, he argues, helps explain why the Industrial Revolution first happened in Western Europe.14 The role of pan-Africanism as a development ideology was vividly captured by Joseph Nye Jr. in his pioneering book Pan-Africanism and East African 14

Integration. Nye contrasted African efforts with European approaches that were shaped by two world wars. He noted that the “current theory regarding European integration assigns ideology a minimal role. Yet most Africans who are interested in regional integration of their continent are committed to panAfricanism, an ideology of unity.”15 Foreshadowing today’s developments, Nye argued that “efforts at integration in Africa are more than imitation or grandiose dreams. African leaders are determined to industrialize their countries.”16 From the outset, Africans visualized regional integration in a holistic way both geographically and economically. But more importantly, its champions such as Adebayo Adedeji, head of the Economic Commission for Africa and former Nigerian minister, believed that Africa needed to define a future that was not tied to its colonial economies. Adedeji did not see any positive outcomes for Africa if it continued to operate on the margins of the hierarchy of the global economic system. To Adedeji, “as long as we continue to nibble at the colonial economic system so long shall we continue to fail to achieve any breakthrough in socio-economic engineering.”17 This view marked a clear shift in focus from political unification to economic decolonization as the driving force in African regional integration. African leaders initially envisioned the creation of a unified continent. But this was not possible until all of Africa was free from colonial rule. Colonialism left behind a legacy of national economies that largely supplied the industrialized world with raw materials. Efforts to obtain better trading terms through international trade negotiations paid few dividends. The pressure to respond to the needs of a growing population created the need to look to regional markets.18 But these same markets faced limitations such as poor infrastructure, trade barriers, and long-standing competition driven by uncertainties in the global trading systems. The route of political integration as a prerequisite for economic cooperation did not seem feasible despite a few isolated efforts. Economic integration itself dates back to early regional federations created to serve colonial purposes.19 The construction of the Uganda Railway that started in 1895 inadvertently triggered the creation of what became the British East African Federation (comprising present-day Kenya, Uganda, and Tanzania).20 Efforts to assert administrative control over the territory led to the creation of regional institutions such as the Court of Appeal for East Africa (1902), Postal Union (1911), Customs Union (1917), and East African Currency Board (1920). The British also operated the Federation of Rhodesia and Nyasaland (also known as the Central African Federation) from 1953 to 1963. The semi-independent federation comprised Southern Rhodesia (now Zimbabwe), Northern Rhodesia (now Zambia), and Nyasaland (now Malawi).21 French West Africa (Afrique Occidentale Française) existed as a federation from 1895 to 1960. It comprised Dahomey (now Benin), French Guinea, French Sudan (now Mali), Ivory Coast, Mauritania, Niger, Senegal, and Upper 15

Volta (now Burkina Faso). Between 1910 and 1958, French Equatorial Africa (Afrique Équatoriale Française) stretched northwards from the Congo River to the Sahara. It comprised today’s nations of Cameroon, the Central African Republic, Chad, Gabon, and the Republic of the Congo.22 Those colonial initiatives suggest path dependence. Indeed, the West African Monetary and Economic Union (more commonly known by its French acronym UEMOA) and the Economic and Monetary Community of Central Africa (CEMAC) in West and Central Africa continue to exist and operate single currencies backed by the French Treasury. These organizations co-exist with the Economic Community of West African States (ECOWAS) and the Economic Community of Central African States (ECCAS) in the respective regions. However, the scale of continent-wide African economic integration as envisioned and mapped out under the continental and regional institutional arrangements far surpasses any of the colonial experiments. The colonial constructs were not based on the pan-Africanism that has driven African economic integration. The colonial federations were replaced by independent sovereign states, which created a large number of overlapping regional bodies that served various functions ranging from security to desertification control. But the motivating force among these functions was regional trade. Although market integration creates large markets to support economies of scale and critical levels of investment, it is industrialization that creates the products to be traded and the much-needed jobs. Infrastructure provides the sinews that knit together the regional markets.23 Markets cannot function without interconnectivity through surface and air transportation and information and communication technologies. Physical infrastructure also needs to be accompanied by institutional infrastructure for regional markets to function efficiently.24 Infrastructure covers critical components that promote competitiveness for industrialization, particularly ubiquitous and affordable energy. Rural infrastructure for agricultural development includes water and damming, fertilizers, seeds, and extension services.25 This African approach, now commonly referred to as developmental integration, vastly differs from pure free trade agreements. Pure free trade agreements cover only market integration, which sometimes exclusively addresses the elimination of customs duties on trade in goods among the participating countries, and sometimes extends to other border measures relating to customs procedures, standards, and behind-the-border regulatory issues. Modern free trade areas cover services and investment issues as well, because services facilitate trade in goods and constitute up to 50% on average of the gross national outputs of most African economies. This book presents material that is not widely available to the general public. Much of it covers ongoing negotiations and therefore the material is subject to change. However, we have tried to distill general insights so that 16

we can capture contemporary developments that underlie much of the textual descriptions available in the literature. We have drawn much of this from our work experiences and involvement in regional integration processes. The nature of the first-hand information means that some of it cannot have the expected academic references, especially in the chapters on recently concluded or ongoing trade negotiations. This information contributes to the global stock of knowledge and assists better analysis of economic integration in Africa. The new theoretical underpinnings provided in Chapter 1 challenge others to go beyond the traditional theories of economic integration and examine the interplay between diverse disciplines that might appear far removed from each other. We take full responsibility for our interpretation of the constantlyevolving context. This book is divided into three parts reflecting the distinct paths taken by African countries in charting a new regional integration path. Part I of the book lays out a theoretical framework for understanding the origins and evolution of Africa’s economic integration from a systems perspective. It adopts a farfrom-equilibrium approach and examines the original vision of pan-Africanism outlined by its founders. Part II analyzes Africa’s experimentation with regional integration, placing emphasis on the emergence of trade as a key force. It uses the case of COMESA to illustrate how trade served as an entry point into pursuing regional integration to promote overall development. The specific chapters in Part II cover regional integration communities (Chapter 3), building COMESA as a regional trade regime (Chapter 4), facilitating regional trade (Chapter 5), and expanding international trade relations (Chapter 6). Part III covers the consolidation of lessons learned from regional experimentation as part of a broader effort to manage economic complexity. It includes chapters on the TFTA (Chapter 7), negotiations for the AFTA (Chapter 8), and governing economic complexity (Chapter 9). Having set out the theory, vision, and roadmap in Part I, Part II addresses the practical challenges of economic integration in Africa and relations with trading partners. From the hope and optimism in the first part, the second part addresses the practical realities that confront Africa. The descriptive nature of much of the material is situated in the context of experimentation and learning. The thread throughout the book is that economic integration in Africa has to address actual development challenges facing governments and, in spite of the difficulty, this led to nuanced approaches deriving from the lessons. The book steadily teases out the lessons learned, which are then summarized in the final chapter. The goal of the book is to document and explain how Africa achieved the feat of concluding the Tripartite and Continental FTAs and to broadly examine that accomplishment in an African economic integration context and as a solution for Africa’s developmental challenges. This explains why the 17

book does not look at trade in a narrow way but as a development tool that requires complementary programs such as those for boosting industrialization, infrastructure, innovation, skills development, and capacity building. The grand and hopeful tone in Part I captures the global optimism of the 1960s. The lofty goals of the 1960s were necessitated by the monumental nature of the development challenges of the time. Cobbling together a fragmented African continent was necessary but not easy, as colonialism had stalled large market formation, infrastructure interconnectivity, and industrialization. However, the priorities, when it came to implementation, would quickly have to address the immediate challenges hampering progress on the long-term vision and roadmap, as Chapters 3 and 4 show, and they would engender a painful process of pragmatic experimentation and learning, as shown in Part II of the book. Performance and implementation of the long-term vision and roadmap are assessed in the rest of the book. The assessment is not in terms of a scorecard. Such an approach would require annual updates to reflect current progress and would be done by the UN Economic Commission for Africa through its annual flagship publications.26 The evidence in this book, though, is in terms of landmarks achieved, plans designed from the experimentation and learning, adjustments over the years, and overall progress towards key stages of regional and continental integration. This book shows that implementation has had challenges in some areas. For example, COMESA has had a functional FTA since 2000. That constitutes progress towards implementation of the integration program. But work on the customs union has continued since 2009, addressing identified challenges. A negative way of looking at this is to conclude that economic integration in Africa has failed. A positive view acknowledges the FTA’s efforts at forging new pathways found to advance the whole integration effort. The bane of African economic integration has been the Afro-pessimism that hardly expects anything good out of Africa. This book takes a positive approach and highlights the overall thrust of progress towards achieving the pan-African vision of an integrated, peaceful, and prosperous Africa. For instance, credit should be given to the fact that huge FTAs were negotiated and concluded in record periods of under four years. Experience elsewhere, for instance at the World Trade Organization (WTO), shows how hard negotiations can be. The approach taken in the Tripartite FTA was to build on the existing FTAs in COMESA, EAC, and SADC. In addition to the extensive legal text, most of the countries carried forward their existing FTA trade liberalization into the Tripartite FTA, subject to reciprocity. The same approach was taken in the Continental FTA. Regarding rules of origin, the book points out that the Tripartite approach was problematic, but it also indicates that transitional arrangements were put in place to account for the Tripartite FTA’s implementation while 18

outstanding work was completed. The idea of a built-in agenda was not novel to the Tripartite or the Continental FTA. Practically every trade agreement has ended up with some outstanding work to be completed post-signature. This was the case with the WTO in 1995 and with the economic partnership agreements between the European Union and the African, Caribbean, and Pacific countries in 2007. Despite progress on regional economic integration, economic transformation remains a big issue in Africa—just as it does elsewhere in the developing world. It is a process rather than an event. There was never any expectation that it would be easy or instantaneous. That is why the book consistently speaks of experimentation, learning, innovation, industrialization, and other enablers of economic transformation, while at the same time indicating best practices and success stories. It might appear that domestic market protection and national industrialization interests are reasons why regional trade arrangements are not fully implemented. Industrialization and investment require large markets, which regional economic integration seeks to provide. Regulatory harmonization at the regional level improves the business environment across the region. Trade agreements recognize the need for flexibility and therefore include provisions for safeguard measures, sensitive merchandise, or excluded products. Part II explains this as well as a number of challenges countries face in implementing trade arrangements. The book explains that there are complementary programs to assist small- to medium-scale enterprises, to address nontariff barriers, and to encourage innovation and capacity building. At the conceptual level, national industrialization interests need not be counter to regional trade arrangements because large markets support the growth of industries. Regional economic integration in Africa is largely an inter-governmental process, which puts governments at the fore of designing, adopting, implementing, and reviewing policy and regulatory frameworks. The mundane work required to keep organizations running and to organize intergovernmental processes is underappreciated. The administrative and analytical work of secretariats is often thankless and unknown, so they are criticized as dysfunctional or toothless. On the other hand, overly visible and high-profile secretariats tend to run into problems with sovereign governments. Managing the mission and positively interacting with stakeholders requires diplomacy. As Part II shows, regional bodies established a repertoire of supportive institutions for implementing regional integration programs and for providing space for various actors such as business communities, women-led organizations, trade facilitators, and investment agencies. This book is both historical and prospective. It outlines the path followed in reaching an agreement and identifies the various obstacles en route. For this reason, it is a handbook for those pursuing implementation or seeking to 19

promote similar integration throughout Africa. By studying the lessons learned, this book becomes a textbook for those involved in creating a new image of Africa that is guided by a common vision, pursued through experimentation and learning, and achieved through determined collective action. Above all, it is hoped that this book will imbue the next generation with the spirit of conceiving bold political visions, pursing them relentlessly with daring experiments, creating institutions through which new lessons are learned, and scaling up those lessons to meet the aspirations of wider communities. A vast continent like Africa offers great opportunities for learning through trial and error. The process of creating the grand trading areas has shown how much can be achieved where there is political will, autonomy of action, and protection from blame. The free trade area is not devoid of challenges, but it offers a mechanism where learning is the principal driver of cooperation. The ultimate goal of this book is to show how pan-Africanism has created the foundation for Africa to approach its future as a learning process. This is particularly important given the urgency to transition from relying on extractive industries that date back to colonial days to becoming dynamic economies that are driven by creativity, innovation, and entrepreneurship.27 This outlook should serve as a guiding framework for the implementation of the 50-year vision embodied in Agenda 2063 that focuses on inclusive growth and sustainable development.28 It also resolves the paradox of a continent k, endowed with raw materials while being home to some of the poorest people on earth. It is through the power of ideas that Africa can hope to assert its dignity and freedom. The idea of “inclusive growth and sustainable development� introduces new moral values in the way Africa thinks about development. These terms reflect the recognition that past emphasis on economic growth did not guarantee a similar improvement in human wellbeing.29 They also underscore Africa’s concern for pursuing development in ways that do not undermine the prospects of future generations to meet their own needs by breaching planetary limits.30 Future development goals will need to take into account inner and outer limits to growth.31 Taking a long-term view made it possible for Africa to reflect such values in its vision, in addition to other considerations such as youth and gender. This view calls into question the traditional practices of equating development with economic growth using value-driven measures such as gross domestic production.32 The book is primarily for policymakers, practitioners, and students of regional economic integration. It has extensive references from various disciplines to assist further analysis and new understandings of economic integration. It is designed to inspire generations of integrationists in the pan-African tradition. It is about institutional engineering to solve actual problems on the ground from a multi-disciplinary approach, though the book is mainly situated in the disciplines of international economic law, international relations, and science policy. We 20

therefore try to present it in accessible language. We envisaged that the general public would find it useful, seeing as they are stakeholders and the ultimate beneficiaries of regional economic integration. And we imagined using it as an aid for executive courses and seminars that contribute to intergovernmental decision-making processes. The final chapter summarizes lessons learned since we see experimentation and learning as a continuous process. This also reflects our intention to provide a widely accessible book that can assist policymaking and inspire new generations of pan-Africanists. The book draws equally from best practices and achievements, setbacks, current and future priorities, and implementation challenges. Pan-Africanism may once have appeared as desperate exhortations from leaders overwhelmed by burdens of governance. This book, however, shows that it is turning out to be Africa’s most powerful force for guiding the transformation of the continent and shaping relations with the rest of the world. What lies ahead is hard to tell, but the contours of regional integration are starting to take discernible shape. The future will favor those with the courage to experiment, learn, and adapt. This is the guiding spirit of a new Africa.





1. Emergent Africa 1.1 Chaos, uncertainty and experimental learning 1.2 Africa far-from-equilibrium 1.3 Creativity, complexity, and irreversibility 1.4 Africa’s divergent globalization 1.5 Conclusion This chapter provides the theoretical underpinnings for the rest of this book, but the theory explained might feel quite unusual for some. At the human level, what we do today is shaped by our vision of the future, thus creating the future, which does not happen by itself. Though eminently simple, this insight has the gravitas of a law of the universe. Throughout the book, it is explained how progress on regional economic integration was made by setting a long-term vision that departed from a status quo characterized by colonial relationships and development challenges and by mapping out the vision under an elaborate roadmap codified in constitutive and program instruments, making adjustments in implementation on the basis of pressing priorities and lessons learned, and painstakingly seeking solutions to challenges along the way. The theory in this chapter is meant to be a refreshing new look at the idea of regional economic integration, and it offers a departure from traditional and other recent theories. The challenge for students of economic integration is to go beyond the traditional theories and explore new understandings and explanations derived from combinations of different disciplines. The chapter first explains how order emerges out of chaos, akin to natural and physical processes, through new choices and pathways and a self-organization that is not predetermined. Describing this initial state of affairs as far-fromequilibrium or disequilibrium is not intended to limit it to the context of market equilibrium. Next, the chapter analyzes the chaos Africa was in, certain elements of the disequilibrium, and the choices that opened up. Examples show how creativity emerges in states of chaos and disequilibrium and how Africa, too, has been responding. Africa has adapted globalization to its circumstances in the area of regional economic integration by not erasing nation states and governments but perceiving them as potent nodes in a bigger, complex 24

system. In this way, this chapter presents the main planks of the theory, broadly places them in the African context, and gives both a historical and prospective dimension. This provides a foundation for the subsequent chapters on creativity and innovation, experimentation and learning, institutional engineering, and elements of the necessary interventions for social economic transformation. The 20th century ushered the continent of Africa into uncharted territory during the age of colonization. The so-called scramble for Africa—as carved out at the 1884-85 Berlin Conference—set in motion a series of events that have irreversibly shaped the evolution of the continent. The race for colonial dominance among European countries defined the trajectory of economics and politics in Africa.33 This was followed by tumultuous events of World Wars I and II.34 The chaos associated with these events influenced the international political direction in unpredictable ways.35 It also provided a graphic backdrop against which new worldviews emerged, seeking to provide a unified view between physical and social systems. The early ideas inherited from Isaac Newton and his contemporaries that framed the world as a function of near equilibrium were already being challenged in the physical world with advances in fields such as thermodynamics, electromagnetism, and quantum physics with the advent of the uncertainty principle. These discoveries facilitated the shift from a focus on objects to relationships and from certainties to probabilities.36 The turmoil that marked the first half of the 20th century shattered presumptions of equilibrium in the economic, social, and political worlds as well. As another scholar put it, “The Newtonian paradigm underlying classical and neo-classical economics interpreted the economy according to the pattern developed in classical physics and mechanics, in analogy to the planetary system, to a machine and to a clockwork: a closed autonomous system ruled by endogenous factors of a highly selective nature, self-regulating and moving to a determinate, predictable point of equilibrium.”37 Providing the theoretical basis for understanding the unity between physical and social systems became a lifelong preoccupation of the 1977 Nobel laureate in Chemistry, Ilya Prigogine. The extent to which Europe’s traumatic events shaped Prigogine’s scientific endeavors are alluded to in his own work: “Our cultural environment plays an active role in the questions we ask, but beyond matters of style and social acceptance, we can identify a number of questions to which each generation returns.”38 Prigogine was born in Russia in 1917 at the start of the revolution. His family later moved to Europe. He completed his studies in chemistry at the Free University of Brussels when Europe was emerging from the darkness of the Second World War. In a clear departure from established worldviews that build on equilibrium models, Prigogine sought to explain the behavior of chaotic systems that are far-from-equilibrium and how order emerges from such states.39 The evolution of post-colonial Africa and the

events that provided the background to Prigogine’s approach to understanding complex systems share common properties in that they can be considered homologous. The use of Prigogine’s framework in understanding the emergence of Africa is not merely metaphorical. It springs from the search for common ground between elementary processes in physical systems and the dynamics of social macrosystems.40 For Prigogine, the gap between the two systems appeared daunting: “Indeed, one could not imagine a greater contrast than the one which exists between the simple models of classical dynamics or the simple behavior of a gas or a liquid, and the complex processes we discover in the evolution of life or in the history of human societies.”41 But Prigogine was optimistic about finding common ground, guided by the conviction that “a social system is by definition a nonlinear one, as interactions between the members of the society may have a catalytic effect. At each moment, fluctuations are generated, which may be damped or amplified by society.”42 This chapter lays out a theoretical framework for understanding the rise of regional integration in Africa as an emergent process that shares a number of characteristics with the chemical and physical nonequilibrium dynamics articulated by Prigogine. The point here is not to draw analogies between natural and sociopolitical systems but to outline common patterns in the rise of novel properties from chaotic systems. As Prigogine said, “No longer does the gap exist between the physical and social sciences but between our complex, chaotic macrosystems and elementary processes.”43 1.1 Chaos, uncertainty, and experimental learning The dominant economic theories used to explain the international order and the place of Africa were based on equilibrium notions. In other words, as long as Africa continued to export raw materials and import finished goods, its economies would be close to equilibrium.44 Any shifts from that state could be remedied with minor policy nudging. Evidence from Latin America, however, was showing a different world in which the terms of trade for countries on the periphery continued to worsen. The idea that the world economy operated near equilibrium was being challenged, and so most interpretations of the future of Africa in the global economy could hardly predict the institutional innovations that have since arisen from the continent’s efforts to pursue regional integration. In fact, the very idea of Africa being able to integrate its diverse national economies was seen either as wishful thinking or dismissed as hollow political rhetoric. Prigogine’s ideas help to explain how postcolonial economic and political uncertainty left Africa with few options but to set out a grand vision, which it pursued through experimental learning. The original grand vision for pan-Africanism was shaped by political ideology. But the pragmatic approaches


to experimentation among groups of countries are what shaped today’s economic integration efforts and outlook.45 Prigogine’s pioneering work demonstrated that nature and its human constituents seek to generate order and complexity out of chaos. The first part of Prigogine’s work focused on how irreversibility led to the emergence of structure or “self-organization” in complex systems.46 He showed that “nonequilibrium may become a source of order and that irreversible may lead to a new type of dynamic states of matter called ‘dissipative structures.’”47 This is achieved not only by following predetermined laws but also through creative choices that emerge randomly. These creative choices are sources of endless novelty. The idea of irreversibility was not just a direct challenge to established worldviews; it pitted Prigogine against Einstein, who stated, “There is no irreversibility in the basic laws of physics. You have to accept the idea that subjective time with its emphasis on the now has not objective meaning.”48 Understanding how irreversibility leads to the creation of structures was Prigogine’s lifelong preoccupation: “The dream of my youth was to contribute to the unification of science and philosophy by resolving the enigma of time.”49 There is a certain appeal to a reversible world in which it is possible to restore order. But such a world would also be devoid of creativity. As Coveney and Highfield say in their book, The Arrow of Time, “We inhabit a world in which the future promises endless possibilities and the past lies irreversibly behind us. The arrow of time . . . is the medium of creativity in terms of which life can be understood.”50 Prigogine’s view of irreversible time provided the conceptual foundation for the concept of “dissipative structures” in open systems that exchange energy and matter with their external environments when driven far from equilibrium. Imposing external constraints on systems moves them farther away from equilibrium, making the emergence of self-organizing behavior possible. His book with Nicolis, Exploring Complexity: An Introduction, concludes: “We have seen that nonequilibrium has enabled the system to avoid the thermal disorder . . . and transform part of the energy communicated from the environment into an ordered behavior of a new type, the dissipative structure: a regime characterized by symmetry breaking, multiple choices, and correlation of a macroscopic range. We can therefore say that we have witnessed the birth of complexity.”51 It is for his elucidation of the idea of dissipative structures that Prigogine was awarded the Nobel Prize for Chemistry in 1977. These ideas spread, amid controversies, to other natural sciences and eventually to some branches of the social sciences that sought to understand society in terms of complex and non-deterministic systems.52 Some of the earliest applications of these ideas in the social sciences were in economics, building on strands of thinking that defined economic change in evolutionary terms.53 The theoretical extensions also built on parallels between biological and economic systems, especially those involving the emergence of urban structures.54 The 27

application of the thinking was initially cautious and relied on Prigogine as a source of metaphors, though a few early studies sought to identify areas where the physical and economic worlds share common features or could benefit from homologous thinking.55 Other studies extended the thinking into the field of political analysis.56 In Prigogine’s view, the emergence of novelty does not constitute a linear path defining a trajectory of progress. When systems are pushed far from equilibrium they reach bifurcation or branching points at which new choices and solutions emerge. It is not possible to determine in advance the state at which such bifurcations are likely to occur; “only chance will decide, through the dynamics of fluctuation.”57 Nicolis and Prigogine concluded that they had “succeeded in formulating . . . the remarkable interplay between chance and constraint, between fluctuations and irreversibility.”58 These choices or new pathways were devoid of value judgment or destiny. In fact, the idea of destiny did not exist in Prigogine’s world view, only new pathways with unpredictable outcomes. The absence of destiny leaves a world of uncertainty, which may be unsettling to those who believe in an orderly world. By taking destiny out of the equation, the uncertainty provides myriad opportunities for the purposive generation of alternative pathways from any given bifurcation point. In the economic and political arena, this is driven by institutional experiments. But the open outlook this offers allows for the creation of imagined futures. As Prigogine put it, “I believe that what we do today depends on our image of the future, rather than the future depending on what we do today.”59 He acknowledges that “we have some conditions that determine limits of the future but within these limits are many, many possibilities.”60 Within the various limits and constraints that postcolonial Africa faced, the continent was able to pursue many possibilities for exploring new pathways into its imagined future. In a view that is consistent with that of the founders of Africa’s integration vision, Prigogine says, “Therefore, since no deterministic prediction is likely to be valid, visions of the future—utopian visions—play a very important role in present conduct. I am more afraid of the lack of utopias.”61 In Africa’s case, it took the form of regional integration efforts that resulted in a complex array of regional bodies with overlapping mandates and national members. But many of them shared common features, given that they were creative responses to homologous challenges. The novel institutional entities, some of which had roots in the colonial era, became the foundations for the construction of emerging Africa. 1.2 Africa far-from-equilibrium The Second World War disrupted the global colonial order by opening up avenues for agitation for independence. India led this movement and served 28

as a role model for other countries, especially in Africa. India did not just demand political freedom; it challenged the very idea of economic equilibrium that justified the theory of comparative advantage. It was India’s struggle for independence that inspired economists to start questioning whether colonies could survive economically without continuing to rely on the same colonial ties they were seeking to break. Concerns over the future of India inspired a number of studies that revisited the sources of economic growth. Massachusetts Institute of Technology economist Robert Solow pioneered a model that explained the sources of economic growth through changes in capital, labor, and technical change.62 Solow received the Nobel Memorial Prize in Economic Sciences in 1987. Studies conducted in Latin American countries provided quantitative evidence against claims that nations that traded with each other operated at near equilibrium. Argentinian structural economist Raúl Prebisch provided the intellectual leadership for this theory.63 The work showed a world marked by a center, a periphery, and the unequal exchange between them, where the center produced manufactured goods and the periphery depended on the export of raw materials.64 To correct this imbalance, Prebisch advocated for improving trade terms for the countries on the periphery.65 His work led to the creation of the United Nations Conference on Trade and Development (UNCTAD) in Geneva in 1964. UNCTAD focused on diplomatic advocacy for developing countries on trade-related issues such as preferential access to markets. It also championed trade among countries on the periphery and encouraged regional integration as a way to fix global trade imbalances. He became the first UNCTAD SecretaryGeneral. In his earlier years, Prebisch believed in free markets and the doctrine of “international comparative advantage” that rested on Newtonian equilibrium notions.66 The impact of the Great Depression on Argentina, however, forced him to re-examine his position. The country had been a major exporter of beef and wheat to the United States, but the tables gradually turned, worsening Argentina’s terms of trade. His thinking shifted from support for free trade to advocating protectionism of developing countries’ industries. The intellectual debates generated in UNCTAD based on evidence from Latin America resonated with African countries, which depended on the export of raw materials. Many were granted independence on the understanding that they would maintain continuity in international trade relations. Their recourse was therefore to seek diplomatic channels, especially through negotiations under the auspices of UNCTAD, for the same trade relief that Latin American countries were seeking. The continued struggle for independence put in doubt the future of African colonial economic relations. The founders of the liberation movements had no clear vision of how their struggles would unfold. Many of them lacked a coherent outlook and operated along narrow partisan or ethnic interests, a 29

problem that transcended the colonial era and persists in places such as Sudan.67 They included a wide array of interests and splinter groups.68 But at a grander scale they shared a common view that economic freedom and prosperity would hardly be achieved without first securing political freedom as advocated by Ghana’s Kwame Nkrumah. As the first African country to gain independence in 1957, Ghana was forced to focus on the liberation of other African countries to achieve the political utopia. Nkrumah envisaged that the next country to be free, Congo Kinshasa, could join Ghana to form the crucible for the United States of Africa. The chaos in Congo itself and the threat of secessionist movements fueled by foreign mining interests made it difficult to realize this vision. The gruesome assassination of Patrice Lumumba, Congo’s first Prime Minister, threw the country into a spiral of violence that made it largely ungovernable. The cycles of violence were rooted in the brutal rule of the region by Belgium under King Leopold II. Unlike other parts of Africa that were colonized, King Leopold II treated the cynically named Congo Free State as his personal property. He ran the colony using mercenaries who killed millions of Congolese people, setting in motion the cycles of violence that continue to play out today.69 Instability in the Congo, a region the size of Western Europe in the middle of Africa, became a major challenge for those seeking peaceful transition to independence. But it also provided additional support to those arguing that Africa would be better off united in some form. The idea of a united continent first appeared in a poem by Marcus Garvey in 1924 entitled, “Hail, United States of Africa.” The poem would become a rallying cry for Africans and inspire variants of the pan-Africanist movement. The ultimate expression of the idea was the formation of the Organisation of African Unity (OAU) in 1963, which Nkrumah championed. This was a watereddown version of the union he wanted, and it sought simply to accommodate divergent views on the primacy of the newly independent states as units of political expression.70 Prior to the formation of the OAU, two main positions divided the countries. The Casablanca Group, including Algeria, Egypt, Ghana, Guinea, Libya, Mali, and Morocco, wanted to see the creation of a federation. The Monrovia Group, led by Senegal and including Ethiopia, Liberia, Nigeria and most of the former French colonies, favored a more incremental approach that would build upon economic integration as a starting point. Those early differences marked a bifurcation that largely defined the evolution of African regional integration since then. The creation of the OAU institutionalized the liberation agenda. But it also helped to define colonial boundaries as the basis for new political units of analysis. These early decisions and events set the political path that later shaped the way Africa visualized and pursued regional integration. The boundaries themselves were arbitrary, having been drawn at the Berlin Conference convened 30

to partition Africa to the different colonial interests. They split families, clans, and ethnic groups. The unification of ethnic groups under their own independent nations became threats to the new sovereign states. The war in Biafra is one of the most catastrophic examples of the struggle arising from this threat, which remains a challenge in many African countries.71 The internal agitation for autonomy had other historical roots. Many colonial nations were formed by cobbling together ethnic groups that were already autonomous entities or kingdoms. Colonization punctuated their self-rule or the drive toward it. In other cases, colonial rulers such as Great Britain helped larger ethnic groups assimilate smaller ones. This approach was in some cases associated with a system of indirect rule when local rulers acted on behalf of the colonizers to administer large populations spread over expansive territory, especially in Nigeria and Kenya. The British in turn offered protection to local rulers.72 According to Mahmood Mamdani, the system of indirect rule resulted in states with “two distinct systems of power—one civic but racialized, the other customary but ethnicized—under a single authority. The structural effects of this form of power reproduced a double division, that between the urban and rural, and that between different ethnically-organized Native Authorities in the rural.”73 The struggle for independence from colonial rule amplified these colonial structures, in which political parties sometimes formed along ethnic lines. In some countries the struggle divided nations into radical and conservative groupings. Most of the emerging sovereign states responded to the divergent political expressions by imposing autocratic rule and suppressing democratic agitation, part of which was to advance ethnic interests under the cover of multi-party politics.74 In some countries, leadership ended up being controlled by a handful of ethnic groups, a factor that explains much of the internal unrest in many African countries today. Over the same period, Africa saw an increase in military coups and an increase in despotic rulers, many of whom presided over the plundering of their countries.75 Popular movements and the demand for democratic change have led over time to the replacement of military leaders with democratically elected ones. Some of these changes were accompanied by reforms in national constitutions that expanded human liberties and curtailed the abuse of executive powers. Implementation of many of these provisions has been slow, but most African countries have introduced political innovations that reflect their political cultures. Debates still continue on issues such as presidential term limits. It remains unclear whether uniform requirements for term limits are necessary for democracy or development. What is evident, however, is that Africa has been experimenting with new forms of governance—and only time will tell what their long-term impacts are likely to be. 31

Two important economic factors shaped post-colonial Africa. The first was an economic continuity in which Africa largely remained a supplier of raw materials for the industrialized countries under worsening terms of trade. Countries that depended heavily on the export of raw material endured extensive economic instability. Heavy international borrowing exposed those economies to harsh credit conditions and subsequent debilitation by the imposition of structural adjustment programs. The programs led to the liquidation of a wide range of public enterprises as part of the bid to remove protections for infant industries. But even more destructive was the impact of the programs on Africa’s nascent science and technology infrastructure.76 The second but even more serious factor was that most African economies were largely mining or plantation enclaves with little economic links to their neighbors. The countries started to experience economic decay not because they had small markets but because of the closed nature of their economic systems. Colonial African infrastructure was designed to connect the continent to its colonizers and not to foster endogenous development. Their populations grew, but their exchange of energy, materials, products, and ideas remained stagnant. Many of these economies also experienced extensive corruption, which is in itself an expression of the nature of extractive industries.77 These countries did not have the infrastructure connectivity to expand the necessary exchanges.78 Their economic decay deepened as their terms of trade with their former colonial occupiers worsened. Many others did not revise their thinking about sources of industrial development and continued to believe in the elusive idea of commodity-led industrialization. They only seemed to visualize their place in international trade in terms of limited positions in the global value chains, and they undervalued the importance of stronger economic linkages with neighboring countries. This precarious situation was flung into deeper chaos and uncertainty when the Cold War ended.79 The West, which had continued to support Africa through foreign aid, turned inward to focus on trade within the European Union and the former Eastern Bloc. The creation of the World Trade Organization (WTO) also changed relations between Europe and Africa by phasing out preferential trading arrangements. Although treaties such as the LomÊ Convention sought to preserve some of those arrangements, the impacts of globalization on Africa could not be ameliorated by these post-colonial arrangements. Over this period, Africa also experienced other major shocks and challenges that would force it to look internally for solutions that involved greater interactions among neighboring countries. The drought of the 1970s and the associated famines led to increased collaboration among affected countries.80 The liberation of South Africa involved thinking of alternative infrastructure networks to isolate the regime, enforce sanctions, and build alternative export routes for southern African countries. The same focus on infrastructure would 32

later become a focus for economic integration in the region under the Southern African Development Community (SADC). These developments were part of a larger effort across Africa to experiment with regional integration on a wide range of issues involving diverse countries.81 Many of these experiments involved overlapping membership and created a complex array of creative interactions across Africa. The blossoming of these experiments offered Africa a rich reservoir of lessons upon which to shape a new continental order and complexity. The experiments also strengthened the nation states as units of political engagement. Some of the regional collaboration or integration efforts had predetermined origins in colonial federations.82 But the new efforts sought to achieve different objectives, especially to expand local interactions and collaboration rather than continue to support a postcolonial agenda. Tensions emerged, especially with the EU, between the new objectives and the desire to maintain postcolonial economic continuity. Despite these tensions, Africa continues to strengthen its regional integration institutions as foundations for its new economic and political identity. The initial state of chaos in the far-from-equilibrium context opened up a wide range of possibilities for Africa’s evolution. A pragmatic approach to regional economic integration, guided by lessons derived from experimentation, is replacing the early utopia of political integration. 1.3 Creativity, complexity, and irreversibility Prigogine stated that the real gap in our worldviews is not between the physical and social sciences, but in macrosystems and elementary processes. The imperfect equilibrium conditions that characterized postcolonial Africa also provided new opportunities for technological innovation and entrepreneurship, though within the constraints of poor infrastructure, low levels of technical capacity, and underdeveloped markets. But the relative isolation of Africa from the global economy also afforded the continent new opportunities to innovate in response to local challenges. Some of the results of this innovation reflect the interactions between elementary processes in science and technology and the wider societal macrosystems.83 The flowering of creativity is so pervasive that it is used as a basis for explaining why African communities and individuals thrive under conditions of extreme poverty. Part of the explanation is that individuals are able to deploy their entrepreneurial instincts by breaking existing rules or skirting obstacles, which is indeed part of the entrepreneurial process.84 But a large part of the innovation comes from the creativity unleashed by being in a state of chaos where possibilities for finding solutions are exponentially expanded. Although it tends to occur within existing constraints such as poor infrastructure, the spread of innovation itself makes it possible for governments and the private sector to invest in improving the entrepreneurial environment. 33

One such example is the rise of the mobile money transfer industry, which started by harnessing basic engineering elements of cell phones and transforming them into radically new industries that have gone global. The innovation built on the rapid spread of the mobile revolution in Kenya in particular.85 The case of M-Pesa (which means “money” in Kiswahili), launched in 2007, is a classic example of technological leapfrog.86 Mobile money transfer took off because it leapfrogged both inadequate telephone land lines and inefficient banking services. The innovation took off in Kenya where it was initially enabled by relaxing banking and telecoms regulations. Over time, mobile firms became part of the banking sector and vice versa. Vodafone’s Safaricom launched the system in 2007 as a simple way of sending small amounts of money via text message between subscribers to the service. This function already existed in all mobile phones, but it took ingenuity to transform what seemed like a trivial act into a global industry. In its first decade, the system expanded to cover a range of services including international transfers, educational support, loans, and health provisions. Creating such a system involved reforming national laws to expand the entrepreneurial space for the new infrastructure.87 In M-Pesa’s case in Kenya, regulations focused on allowing public and private entrepreneurs to introduce new business models that enabled the poor to become part of the mobile revolution. The business models included pre-payments and low-cost handsets. In a number of African countries, institutions were created to train new professionals to work in the mobile sector. Some of these efforts included the founding of new telecoms universities in countries such as Egypt, Kenya, and Ghana. Analogous institutions such as the Digital Bridge Institute in Nigeria perform similar functions. In these cases, the impetus for the innovation in higher education came from telecoms rather than education ministries. The infrastructure revolution has also undergone dramatic changes. Early mobile phone systems were connected to the rest of the world through satellite links. Until 2009, only a small number of West African cities had access to undersea fiber optic cables. Today, all continental Africa and Indian Ocean states have access to fiber optic cables with significantly higher bandwidth. Many countries now face the challenge of leveraging the broadband infrastructure for economic transformation. In some countries, telecoms operators have yet to migrate from relying on satellite links to using the fiber optic cables. As a result, the promise of low communication costs has yet to happen. Even where the migration has occurred, access charges still remain prohibitive. Thus, the infrastructure is not being fully utilized to foster innovation and development.88 There is great optimism over the emergence of information and technology hubs in major urban areas across Africa.89 These hubs have become a symbol of African youth entrepreneurship. Indeed, many of them are producing new technologies designed to solve local problems. 34

The importance of this case lies in the extent to which nonequilibrium systems are able to rapidly embrace seemingly low-cost technologies and turn them into high-impact ventures. The mobile revolution has also been a force in regional integration, and countries continue to share common standards that allow users to roam across countries through common infrastructure and payment arrangements. Such regional arrangements have also helped to cut down on telecommunications costs for users, but more importantly, the revolution represents an opening of African countries to their neighbors, which increases the interactions needed to counteract the forces of economic decay. There are many other examples of such creativity that help explain the connections between elementary natural processes and wider societal evolution. These include efforts to leverage emerging technologies in fields such as additive manufacturing, unmanned aerial vehicles, and genomics to introduce new products and services aimed at transforming the economic landscape. Such creative solutions are generated and adopted at a fairly rapid rate. This rate of adoption can be explained in part by the advantages of being in a far-fromequilibrium state that is unconstrained by incumbent forces.90 These technological adoptions, however, have had relatively limited impact because of the absence of the complementary institutional innovation that is necessary to expand their application and stimulate further creativity. In this respect, the new institutions play a catalytic role that in the end could lead to their own adjustment, if not demise. In this respect, catalysts in the social arena differ from those in chemical processes, where they are not affected by the changes that they induce. In fact, institutional innovation unfolds in a coevolutionary manner, changing the underlying conditions that in turn change the institutions. In many cases, institutional rigidities become an integral part of path-dependency, and they push systems towards stability. But even under those circumstances, the systems reach bifurcation points at which their symmetry is broken and new pathways for creativity emerge.91 The tensions between the need for systems stability and the pressure to innovate constitute some of the most unresolved sources of controversy over innovation in society. Every generation is locked into this endless drama of mutual articulation between novelty and continuity.92 The novel regional and continental market institutions that are being created will provide direct opportunities for expansion of the economic space. They will also offer new signals that will lead to new ventures and further institutional adjustment. For example, the signal of larger regional markets is likely to contribute to the emergence of catalytic banks that will help to finance industries that can operate on the relevant economies of scale.93 The increase in the number of industries will also expose people in the region to new technical knowledge, which can then serve as a basis for the creation of derivative enterprises. Regional institutional creativity is therefore at a critical moment in 35

spurring new technological applications, which in turn will require additional adjustments in institutions to smooth the functions of new ventures. There will be moments when these coevolutionary states will appear to move in the direction of equilibrium in specific sectors or industries. But the overall pattern of behavior will be a series of dynamic events that lead to further bifurcations and expanded economic complexity. 1.4 Africa’s divergent globalization Since the early 1990s, political opposition to globalization has intensified.94 This was mostly because the liberal agenda underlying globalization at the time was largely an extension of the prevailing global economic model based on comparative advantage. It was the equilibrium model that assumed no major disruptions would occur that could not be remedied with modest nudging or adjustments in the system. Opponents of the model, however, pointed to a number of irreversible processes that could be detrimental to a wide range of human and environmental fields such as labor, health, and even international trade itself. Even more pronounced were concerns over the potential ecological consequences of the new trade regime. Efforts to find comfort through international negotiations were inadequate partly because environmentalism “is driven by a sense of urgency that is not quenched by calls for time and adjustment, while international trade is driven by age-old dynamics and patterns that do not change overnight. Between these two contrasting approaches lie some fundamental rigidities about industrial structures and attitudes.”95 The structure of the global economy and distribution of industries have followed the same path of the comparative advantage model.96 The existence of path-dependency in structural patterns is notable. But even more striking are clear signs of unequal clustering of industrial activity without necessarily reducing global industrialization rates.97 However, premature deindustrialization has occurred in other regions.98 There have also been areas where industrial capabilities have diffused to emerging markets, indicating that globalization need not be a zero-sum game.99 But on the whole, the model resulted in many of the predicted dislocations, including in countries that championed it. The outcome has been growing opposition framed as economic populism and driven by zero-sum worldviews. To understand the dynamics of Africa’s regional integration as a divergent form of globalization requires a different conceptual vantage point. In his book, The Consequences of Modernity, Anthony Giddens defines globalization as the “intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.”100 This definition implies a systems approach in which the various parts interact without the necessity of a predetermined outcome. 36

As social relations intensify, two potentially contradictory features emerge. Networks create opportunities for countries, communities, and firms to operate in nested hierarchies whose impact is larger than the sum of the actors. This intensification is not at the expense of the constituent parts. This open process also provides opportunities for the individual actors or parts to strengthen their local identities. This logic explains why African countries have sought to pursue regional integration while seeking to strengthen their sovereign identities.101 The positivesum approach differs significantly from the conventional view that strengthening international organizations entails ceding part of national sovereignty.102 To the contrary, articulating national interests through international organizations amplifies the impact of states on the global stage. The network effects of complex diplomatic relationships are usually undermined by the imposition of command and control governance structures.103 This may be in the form of directives issued from a centralized authority to nation-states, which is an approach that the African Union (AU) has avoided. It can be argued further that their willingness to experiment with regional integration is an expression of both the growing strength of their sovereign capacity to act and their respective identities. This view also illustrates how the notion of sovereignty is shifting from the Westphalian model that stresses the discrete powers of individual states to emphasizing greater inter-state interactions.104 This systems approach entails the strengthening of nations as nodes, where physical infrastructure is one of the key connecting points and trade is an example of a vital interaction. These features of the integrated system are purposively structured through regional negotiations so that they can provide the necessary room for the evolution of the system as a whole. One of the main benefits of expanding opportunities for regional integration is not just increased trade but reduced resistance to products coming from neighboring countries. One of the features of African countries is that they tend to produce goods in the same product categories, making it difficult to promote trade. This causes neighboring countries to use a wide range of tariff and nontariff instruments to protect local industries. The situation is compounded by the limited rate of innovation that would expand the range of product categories. But signals from expanded market opportunities for product diversification arising from regional market integration shifts the discussion from classical market protection to the search for slow increments in trade, reduction of unfair trading practices, and the use of trade remedies for some of the affected industries. The process of expanding domestic industrial development itself involves overcoming resistance to technology.105 Increased international commerce reinforces these trends by reducing resistance to technology from trading countries.106 Regional integration therefore amplifies the adoption of new 37

technologies domestically and internationally through international trade. Those seemingly modest moments of local bifurcation can trigger large-scale creative forces that transform underdeveloped regions into important economic players over a short period. Such creativity will extend to the cultural arena in areas that rely on interactive recombinations for their survival and development, such as music.107 Probably the most sensational moment in Zairean musicology was in the early 1970s when a group called Trio Madjesi took the market by storm. The Tripartite band was led by Mario Matadidi Mabele (Angola), Loko Massengo “Djeskain” (Congo Brazzaville), and Saak “Sinatra” Sakoul (Zaire). The three musicians had already made their mark performing with Orchestra Vévé under the mighty Kiamwangana Mateta Verckys. It was the creation of a Tripartite band that allowed them to come up with new musical combinations that were irresistible in the three countries and beyond. Their creative impulses exploded when they freed themselves from the constraints of national markets and embraced multiculturalism and transculturalism, a phenomenon that continues today in Congolese music.108 The blending of genres did not make their music less African.109 It seemed to broaden its appeal. They added soul to the rumba, making it appealing to western audiences. In addition to their jazzy rhythms, eccentric outfits, and disco-style music, they also emulated the hairstyles of Bob Marley and James Brown.110 Their meteoric rise to fame attracted the attention of contemporary giants such as Franco Luambo Makiadi, Tabu Ley Rochereau, and their former band leader Verckys. The giants watched helplessly as their fans defected to Trio Madjesi. The pull of fans was so powerful that rumors of their demonic powers spread across Zaire. When they started attracting invitations to perform in Europe they also caught the attention of authorities who put them under investigation for violating Zairean foreign exchange regulations and embezzlement. The judicial pressure and internal disruptions reportedly orchestrated by their competitors brought down their band. Trio Madjesi lasted only five years. But its legacy as an electrifying experiment in regional and cultural integration lives on. It shows what could be achieved with the free movement of talent across national boundaries.111 Other areas such as environmental management that are in decline could also benefit from new creative forces arising from interactions across national boundaries. More specifically, much of the pressure on Africa’s wildlife resulted in the decline in species such as giraffe, cheetah, and lion. Creative conservation measures could include migration corridors that expand the range of endangered species to increase their survival chances.112 Satellite-enabled technologies will help not only in determining where to establish such corridors, but they will become essential to wildlife monitoring and protection.


These patterns of incessant renewal have also been observed in post-conflict countries. Rwanda, for example, suffered tragically from the 1994 genocide but transformed itself within a generation to become an important economic actor in the region. Part of its transformation can be explained by deliberate efforts to build the human competence among the youth needed to harness the development potentialities unleashed by the chaotic circumstances. At the same time, new governance approaches helped to generate order and complexity out of the chaos.113 The case of Rwanda is interesting in its own right. But it offers larger lessons for other African countries and the continent as whole on how to manage the transition from chaos to order and complexity.114 It carries important lessons on how to address the risks of path-dependency that often make it difficult for economies to transition to new phases when new creative opportunities emerge from random bifurcations. One of the critical roles that regional and continental bodies play is providing opportunities for collective learning. The AU and the regional economic communities (RECs) provide continuing opportunities for heads of state, ministers, and other participants to learn from the experiences of their peers. This learning opportunity often gets ignored by those seeking to assess the effectiveness of regional bodies. The catalytic role of regional bodies therefore extends to sharing of national and regional experiences. It is through these bodies that various nations serve as role models for others seeking to implement similar programs. In this respect, regional bodies provide opportunities for member states to exercise their influence through knowledge-sharing rather than political power or legal enforcement. By serving as learning platforms, regional bodies also offer a basis for vital feedback on the implementation of regional integration measures. Over time, regional bodies will strengthen their internal research capabilities to be able to support this learning function more effectively. This can be complemented by other organs of the AU such as the Pan-African University. 1.5 Conclusion Drawing from the inspirational work pioneered by Nobel laureate Ilya Prigogine, this chapter has laid out a framework for explaining Africa as a continent that found itself in far-from-equilibrium conditions. The tumultuous events of the 20th century marked by two world wars left Africa and much of the world in a state of chaos. Ironically, this period coincided with an increased application of equilibrium models in economic analysis. Africa’s regional integration efforts represent a creative response to the chaos. There was no predetermined path to pursue and no prior role models for the continent to emulate. Regional integration has been a result of the experimental search for regional solutions, the identification of key lessons from those experiments, and the subsequent consolidation that serves as a basis for greater economic development and prosperity. 39

The process itself was initially guided by political utopian ideals about continental unification, but the pursuit of that objective took on a pragmatic approach with a focus on economic integration. The ultimate goal of unification still guides the integration process, but it relies on a systems view that involves greater continental and global interactions while strengthening national identities. Africa is at a critical juncture where it is now starting to incrementally use the lessons learned from the RECs to move toward a more integrated continent. This process itself is unpredictable, but past experience shows that it will likely be experimental and incremental in nature. On a geographical scale, it is the most ambitious effort at regional economic integration ever attempted in history. It is not just a mark of political courage but represents a remarkable effort to move a region three times the size of the United States to a new order in a peaceful and diplomatic way. In many respects, it is a grand effort of the kind Prigogine would have liked to see as vindication of his vision that the systems dynamics he demonstrated in the elementary physical world appear to express themselves with the same patterns in the macroscopic arena of political innovation. Prigogine’s approach changes how we view the evolution of Africa. But even more important is that a new understanding of Africa could change the way we think about political processes by making the shift from a mechanistic worldview to a systems approach more explicit and transparent. 115


2. Visualizing regional integration 2.1 Political and economic pan-Africanism 2.2 Customs union theory and free trade 2.3 Origin of the African Economic Community Treaty 2.4 Framework and roadmap for integration 2.5 Conclusion As outlined in the previous chapter, the present carries the past, but pathways to the future are relatively open. This is even more accurate in countries whose general condition is far-from-equilibrium, which Africa experienced in the latter half of the last century. Building on that outlook, this chapter explains the emergence of regional integration as a self-organizing process that started with images of political utopia and led to the creation of institutions aimed at proving a framework of economic development. The complexity of the continent and the global context in which these creative ideas emerged are bewildering. Remarkably, conditions existed that made it possible for a small handful of dedicated people to chart a vision of the most ambitious regional integration effort ever mounted. This is testimony to the creative possibilities that are inherent in systems operating far from equilibrium. As this chapter shows, the processes did not follow a predetermined path. To the contrary, many of the landmarks that constitute the roadmap for integration were themselves a result of experiments or of economic pathdependency. Significantly, the experimental approach made it possible to build on the realities of sovereign identities while seeking to create wider regional trading systems through which nations could expand their development possibilities. This required negotiators to agree on common principles or standards of economic conduct that made interactions possible. The goal of the process was to turn discrete sovereign entities that emerged after independence into interconnected parts that exchanged resources, energy, products, services, and ideas. In effect, the process has been a transition from a Newtonian worldview to a self-organizing system that reflects the creative possibilities arising from moments of chaos. 41

This chapter first explains the evolution of political and economic panAfricanism as the organizing logic for pathways leading away from colonial and dependent relationships. The chapter then briefly surveys traditional theories of economic integration and explains their inadequacy in light of the actual challenges that precipitated progress towards cooperation in Africa. The chapter then sets out the long-term vision and the roadmap, codified in legal instruments and civil processes, as the overarching architecture for political and economic emancipation of Africa. The institutional engineering entailed was remarkable, and it demonstrated the creativity and innovation resulting from the far-from-equilibrium state Africa was in. The Prigogine theory explained the origins of regional integration in Africa through the pathways of pan-Africanism, institution-building, and engineering the future on a long-term basis. This chapter explains the thinking behind African integration and how a vision and strategy were developed to harness experimental learning. The vision was to become an African Economic Community (AEC), and the roadmap or strategy planned to accomplish this progressively in six stages over a period of 34 years. The adoption of a longterm program allows for progress to be made over the course of a schedule. Regional bodies have already been established covering all of Africa, thus achieving a fundamental stage of the overall program. 2.1 Political and economic pan-Africanism The idea of building bigger political and economic entities dates far back in African history, before the advent of colonialism in the 19th century. Expansive empires spanned the length and breadth of Africa. One of the key aspects of colonial rule, however, was to deny colonies the autonomy to experiment and learn from local lessons. The process of decolonization involved the demand for autonomy as well as the freedom to innovate, which involves learning. The process of development learning also involves institutional innovation, a key theme of the formation of nation states. But many of them maintained constitutional continuity by being part of the colonial powers. The vision for integration to some extent created the basis for a departure from the foreign control of local experimentation and learning.116 For purposes of economic integration in independent Africa, pan-Africanism started in 1900 when Sylvester Williams of Trinidad, then admitted to the Bar in England, organized a pan-African congress in London. Subsequent congresses were held in 1919 in Paris coinciding with the meeting there of the victors of the First World War; in 1923 in London; and in 1927 in New York. These called for equal treatment for people of African descent and proper policies for those who were then colonized.117 The concerns focused on welfare rather than on decolonization.118


Five principles for governing natives of Africa were set out. Natives were to have effective ownership of as much land as they could profitably develop. Investment of capital and granting of concessions were to be regulated in order to prevent exploitation of natives and exhaustion of natural wealth. Slavery and corporal punishment were to be abolished, and forced labor was to be allowed only as punishment for a crime. Native children had a right to education, and natives were to participate in government. A significant departure occurred amid post-war chaos with the 1945 Manchester congress. Dr. William E.B. Du Bois led the movement; Kwame Nkrumah was joint secretary with George Padmore of Trinidad; Peter Abrahams of South Africa was publicity secretary; and Jomo Kenyatta of Kenya was assistant secretary. 119 Pan-Africanism by then was open to all who fought for the liberation of people of African descent.120 Since the war had just ended, the congress seized the opportunity for demanding immediate decolonization in Africa. The aims of pan-Africanism, which were to improve the lot of colonized Africans, turned more concretely to liberation from colonialism and achievement of political unity as the strategy for guaranteeing a dignified future for African peoples.121 This marked the complete evolution of pan-Africanism through negritude to a movement with a clear political agenda anchored by the demand for independence. A historical omission at this stage, however, was that pan-Africanism opted not to demand a united government for Africa as a condition of decolonization. Rather the goal of independence was pursued by individual colonies from their respective colonizers, resulting in independent states and governments that each laid a claim to a sovereignty to be protected and maintained.122 The majority of these new states did not favor a political union, as the period from 1945 to the founding of the OAU in 1963 showed. The 20th century was marked by opposing strands and views of African unity. French colonies had developed functionalist cooperation especially in the monetary field, and they were integrated into the French government to a greater extent than were their British counterparts. In British colonies, indirect rule had not generated such a result, save that in East Africa considerable integration had been achieved—subsequently leading to the formation of the East African Community in 1967. Francophone countries were more inclined toward maintaining a connection with France than they were with unifying with other African countries.123 The problematic formation of the Economic Community of West African States (ECOWAS) attests to this.124 Resistance to unification among African countries was rooted in maintaining their hard-won sovereignty. Opposing political unification became common. Thus, two broad strands of pan-Africanism emerged: Kwame Nkrumah called for a continental union government, and others called for independent states to cooperate on matters of common interest in a functional manner 43

marked by sovereignty and noninterference. Leaders of the latter strand voiced suspicion that Nkrumah had designs of self-aggrandizement, wanting to become president of Africa to their detriment. Separately, several dissident movements were pitted against the new governments, and Nkrumah used these to garner support for a union government that would anticipate divisive schemes. The majority response of African leaders was to condemn interference in the internal affairs of other countries. Finally, in 1963, a conference was called in Addis Ababa to draw up a charter for African unity, where both sides were represented. Arguments for a continental union government did not receive the support of African leaders, and Kwame Nkrumah cast the lone vote for this view after everyone in his group abandoned it, including Julius Nyerere, then president of Tanzania. Article III of the newly adopted charter contained principles, among others, of equality, noninterference, respect for the sovereignty and territorial integrity of each state, and each state’s inalienable right to independent existence. The majority of the first crop of African leaders refused to permit diminution of national sovereignty because they focused on nation building and preservation of their newly acquired power, albeit within the pan-Africanist spirit of collectively fighting decolonization. In this sense, the OAU, which was created in 1963, accomplished its primary mission of decolonization, although it’s commonly viewed as a failure.125 Exceptions to the condemnation include isolated incidents in conflict resolution.126 This view, however, seems to be based not on the actual goals of the OAU but on expectations it never sought to fulfill. Indeed, there were suggestions for its greater role and recommendations for changes.127 What the framers of the charter set out to achieve, however, was a resounding success. They wanted noninterference, and they got it. They defeated programs for supranational institutions to check betrayal of the national good and so survived on eliminating or disarming institutions for proper governance. Even the Secretary-General was not made a cogent institution because members did not want a super head of state who might do what they did not approve of. They merely approved an administrative secretary with no executive authority. The doctrine of uti possidetis, maintaining the same boundaries after independence as before, has been applied to Africa.128 Though the aims of the OAU include promotion of the unity and solidarity of African states, the principles ensured that there was total separation and therefore considerable disunity. The idea of unity seemed to refer to a phenomenon of more than just coexistence since the comity of nations requires that states coexist in some cooperative manner as well. Shared features like the absence of democracy and the lack of accountability are not productive pan-African qualities. In the end, the charter effectively defeated the idea of African unity.


The only nod to pan-Africanism in the OAU Charter was consensus over the eradication of colonialism. Pan-Africanism originally aimed for political independence in Africa, the continuation of decolonization activities, the elimination of racism, and the promotion of economic development, but it increasingly narrowed into a movement for the political unity of Africa. However, the pan-Africanism that survived the charter called for supporting decolonization on what was essentially a voluntary basis, for there were no real sanctions or penalties. Independent states fought against colonialism by providing personnel, finance, and diplomatic support. Later, as the OAU evolved into the African Union in 2000, the goals of regional integration focused more on economic development as well as governance and peace-building.129 Underpinning pan-Africanism was the global quest for a new international economic order that sought to redress the structural injustices that marginalized developing countries faced. Regional integration offered an opportunity for countries to establish a new economic order at the regional levels when global efforts seemed to wane or run into furious opposition by a diversity of groups that were skeptical of UN declarations and proposals (especially on duties and rights of states), which recognized permanent sovereignty over natural resources and the developmental imperative that could include nationalization or renegotiation of long-term concessions. Interestingly, regional integration still provided a forum for continental-level solutions against the unmitigated ravages of economic liberalism in the 1990s and early 2000s (such as debt, unemployment, income inequality, emaciated governments, and dwindling social services), through literature and anti-globalization demonstrations around the world.130 There is a body of thought that pan-Africanism now manifests itself in— and is the motivation for—economic integration. As S.K.B. Asante notes, “For better or for worse, Africa is coming of age. The golden epoch of high hopes for panafricanism as a movement of political decolonisation has passed. In its place has emerged a new era of panafricanism as an instrument of regional integration and economic decolonisation.”131 Economic integration in Africa has been a theme since the 1945 Manchester conference that recommended the establishment of a West African Economic Union. In 1958, the United Nations Economic Commission for Africa (ECA) was established, among other things, to support economic integration in Africa.132 In addition, the 1963 OAU Charter provided for the Economic and Social Commission as a means of addressing economic development. By 1965, the OAU and the ECA began to work together and established numerous intergovernmental organizations, but it was not until 1975 when Adebayo Adedeji became head of ECA that economic integration became a cogent development strategy.133


Conferences following the independence of Ghana—the All-Africa Peoples Conference held in Ghana in 1958, the Saniquelli Meeting in Guinea and Liberia in 1959, the second and third conferences of independent African states in Monrovia in 1959 and Addis Ababa in 1960—all called for the establishment of a broad continental common market in Africa. This theme is now probably the most significant aspect of African cooperation. Africa’s heads of state and government, since adopting the Lagos Plan of Action (discussed below), have clearly taken the view that since the end of decolonization, economic emancipation is now the next phase of the struggle of African peoples.134 The real question, though, is how to secure the implementation of economic or political pan-Africanism. Indeed, political pan-Africanism is a vital factor in achieving economic integration, and it tends to be led by the elite. The experience in Africa so far indicates that, rather than the grand continental schemes, the regional projects are attracting the political will and resources of governments, and they have achieved relatively faster implementation than have continental projects. The overall motive for economic integration was to create and consolidate the conditions for the rapid socioeconomic development of the people of Africa. The first specific motive was economic efficiency. This could be achieved by increasing trade and investment through building large regional and continental markets to support production and investment at critical levels that have significant linkages into the economies (single markets and investment areas). It could also be pursued by promoting optimal utilization of resources through cooperation, mainly through functional integration in the various sectors such as agriculture and industry. Another way of achieving economic efficiency was to consolidate the regions into seamless economic spaces interconnected with the relevant infrastructure such as transportation, energy, and telecommunication. The second motive involved maintaining peaceful coexistence within and between countries. A related objective was to resolve any disputes or conflicts through the common mechanisms that have been established at the continental and regional levels.135 These include negotiating the end of conflicts and resorting to common defense institutions. The search for peaceful coexistence includes the use of constitutional means as well as an exploration of relevant indigenous approaches.136 The third motive was ensuring the rule of law and democratic governance within and among countries as a bedrock for economic development.137 This would include a stable constitutional and legal order; enforcement of property rights and contracts; predictability and transparency in governance; implementation and enforcement of obligations; and rights in regional and international instruments. This process has involved not only the adoption of norms such as regular elections and multiparty politics, but it also entailed the search for practices that are appropriate to African conditions.138 46

The fourth motive for consolidation was to strengthen the position of African countries in international economic diplomacy, especially in multilateral organizations.139 The strengthening of Africa’s economic diplomacy has sought to promote effective participation and equity in global trading and economic systems, including the World Trade Organization, its predecessor the General Agreement on Tariffs and Trade, and the United Nations and its specialized bodies. But more fundamentally, it connects with Africa’s own search for diplomatic agency, as evidenced by its relations with other emerging markets such as China, India, South Korea, Turkey, and the Gulf States.140 Pan-Africanism thus is a movement for the unity of the people of Africa, including those in the diaspora. It aims to bring about programs for economic development and resistance to oppression and domination. Over the years, its priorities have shifted, ranging from continuing emancipation of AfricanAmericans in the 19th century to enhancing colonized people’s welfare and promoting decolonization in Africa for the benefit of political and economic integration. 2.2 Customs union theory and free trade The motivation for economic integration in Africa was based in part on the customs union theory, which was formulated to determine whether a given customs union would tend toward free trade (meaning predominantly tradecreating) or toward protectionism (trade-diverting). A union is considered trade-creating when domestic high-cost suppliers are replaced by low-cost suppliers from the partner state. It is trade-diverting if low-cost suppliers from third countries are replaced by high-cost suppliers from the partner state due to the removal of internal tariffs and the introduction of a common external tariff against the rest of the world.141 Much of the literature holds that the theory does not apply to Africa for three reasons. First, the literature claims that the tests are inappropriate because conditions favoring trade creation are nonexistent in Africa. Instead, conditions appear to favor trade diversion and protectionism.142 Second, the rationale for economic integration in Africa differs because it builds upon the potential benefits of trade diversion as a development impetus. Developing countries seek economic integration in the hope of rationalizing the emerging production structure.143 Third, the context of the theory differs because it was formulated with the integration of developed countries in mind and thus cannot be applied to developing countries. The theory was concerned with a preexisting level of trade as well as with efficiency in use of resources already employed, whereas in Africa, the concern is more about getting resources not yet employed to be applied for developmental purposes.144


The problem is that African economies are small and their incomes are low. Small markets have a harder time industrializing and providing basic infrastructure, thus hindering economic development. The infrastructure that does exist tends to support trade with former colonial powers rather than support inter-African trade.145 Yet many of these considerations (such as efficient resource use and tests for trade creation and diversion) are also important for developing countries, especially in regard to trade and economies of scale.146 The context for the formulation of the customs union theory in Europe does resonate with that of Africa today. Economic integration in Europe was deemed necessary due to the small size of the national markets. The big push under the Marshall Plan required larger markets to support emerging industries.147 Barriers to trade therefore had to be reduced or eliminated. The result of the customs union theory test is a determination of whether a particular project for economic integration tends toward free trade or protectionism. The goal is to avoid protectionism with few exceptions, such as those envisaged under escape clauses in treaties permitting imports into a country. As such, customs union theory tests can set standards in economic integration, which should affect development policy and resource use. Another motivation for economic integration in Africa stems from free trade. Free trade has been the basis for the construction of the international economic order and the rules that maintain it, which tend to operate in disfavor of developing countries. By focusing on production of primary products, developing countries have been disadvantaged by worsening terms of trade, which in part accounts for Africa’s dismal economic development since the 1970s. Raúl Prebisch promoted the thesis that industrialization was necessary for developing countries to grow, which meant that they required a degree of protectionism.148 The problem was that industrialization needed to be supported by a market large enough to provide a sustainable level of demand for the products.149 The development of the pharmaceutical sector and the associated health industries is an example of how small fragmented markets have retarded industrial development.150 This led to recommendations for economic integration to create the markets and conditions that would generate economies of scale. One way by which countries do this is to invest in technological innovation. In effect, they create new competitive advantages as opposed to simply altering comparative advantages.151 2.3 Origin of the African Economic Community Treaty Upon gaining independent statehood, African governments were faced with various political, social, and economic problems that required cooperation at the continental level. There are at least two areas where concerted action was adopted. One was decolonization, which meant freedom from colonialism and 48

the continuing menace of neocolonialism.152 The other area was economic development. The argument that industrialization, in conjunction with large markets, was necessary in developing countries was widely accepted based on the resolutions adopted by African leaders before and after the creation of the OAU in May 1963. In practical terms, the creation of large markets meant economic cooperation and integration, particularly the removal of barriers to trade. In Africa, aversion to colonialism and the impetus toward economic development were strong reasons for cooperation and influenced interstate relations as reflected in the OAU Charter. The OAU Charter was predicated on, among other principles, selfdetermination, dedication to the general improvement of Africa, a desire that all African states should unite to ensure the welfare and well-being of African people, and the creation of common institutions to meet these ends. Similarly, the objectives of the OAU were to promote the unity and solidarity of member states, promote continental and international cooperation, defend sovereignty, and eradicate colonialism. Specifically, member states must coordinate and harmonize their general policies in political, diplomatic, economic, educational, cultural, health-related, scientific, and security-based cooperation. Of these, decolonization has been achieved systematically and—with the repeal of laws for maintaining apartheid in South Africa since the release of Nelson Mandela on February 11, 1990—formal and de jure colonialism has been successfully eradicated.153 In addition, the United Nations established commissions for each continent to address regional problems.154 The United Nations Economic Commission for Africa (ECA) believes that economic cooperation and integration will facilitate economic development in Africa. Under a formal agreement of cooperation signed on November 15, 1965, the ECA has worked with the organs of the OAU, especially the Council of Ministers and the Assembly of Heads of State and Government, recommending programs and promoting agreements for regional economic cooperation and integration as a way of addressing economic problems in Africa.155 Over the years, African leaders acting within the OAU have reached resolutions for economic cooperation and integration. They recognized that economic integration was a prerequisite for the achievement of the aims of the OAU. The Council of Ministers adopted the Kinshasa Declaration in December 1976, which was endorsed by the Assembly’s Libreville Decision of 1977 recommending the establishment of an African Economic Community (AEC) over a period of 15-25 years. The 1979 Monrovia Declaration of Commitment on the Guidelines and Measures for National and Collective Self-reliance in Economic and Social Development for the Establishment of a New International Order called for the creation of an African Common Market leading to an AEC as well as sector cooperation similar to the Lagos Plan of Action (LPA). 49

On the 25th anniversary of the OAU, the Addis Ababa Declaration of the Heads of State and Government reiterated that the economic development of the continent remained the primary responsibility of African governments and was to be attained through economic cooperation and integration via regional economic groupings, which would form the building blocs156 of the AEC. The landmark documents in Africa’s development policy are the LPA and the Final Act of Lagos (FAL) adopted in 1980, which were direct results of the work of the ECA.157 The AEC Treaty sought to implement the economic cooperation and integration provisions of the LPA and FAL, which called for the establishment of an AEC by the year 2000. The LPA called for policies to be adopted at the continental, regional, and national levels regarding food and agriculture, industry, natural resources, human resource development and utilization, science and technology, transport and communications, trade and finance, economic and technical cooperation, environment and development, the least developed countries, energy, women and development, and development planning statistics and populations under substantive chapters. It includes, therefore, planned investment and production (production integration), physical and social infrastructure (structural integration), and cooperation in science and technology (research and development). Economic integration under the LPA is largely sectoral integration. The FAL, which is Annex I to the LPA, confirmed “full adherence to the Plan of Action,” and stated that it was to be implemented through the creation of the AEC by the year 2000 on the basis of a treaty to be concluded. The stages of creating the AEC included establishing and strengthening regional economic communities at the sub-regional level. The all-encompassing features of the LPA and FAL were collective selfreliance and self-sustaining policies meant to support the pan-Africanist dual strategy. African countries were called upon in the context of economic pan-Africanism to help themselves and each other develop. In the Monrovia Declaration, the predecessor to the LPA, African leaders committed themselves individually and collectively to promote economic and social development and integration of African economies with a view toward achieving self-sufficiency and self-sustenance; to promote economic integration of the African region in order to facilitate and reinforce social and economic interaction; and to establish national, sub-regional, and regional institutions to facilitate the attainment of the objectives of self-reliance and self-sustenance. In a repudiation of the limitation of the equilibrium approach to world economics, the preamble to the LPA referred to the disappointing history of global development strategies, which have added to Africa’s stagnation and vulnerability. It also called for a regional approach based on collective selfreliance. Though the suggestion was to break with orthodox development economics, the debate on policies for Africa’s economic development 50

remained a matter for African leaders, international organizations, and foreign governments. African leaders have continued to draw on experience and to respond to developments overseas, such as in the area of economic cooperation and integration. At no stage were links with international organizations or foreign governments severed. They see their role in the way they are redefining national economies as part of a more integrated and inclusive Africa. Self-reliance meant moving toward self-sufficiency to reduce vulnerability and over-dependence on primary products and foreign support. It also meant the expanded use of Africa’s natural resources and primary reliance on Africa’s efforts and resources to achieve economic development. The international community and international organizations were expected to supplement this internal effort where necessary on programs agreed upon or approved by African leaders and peoples.158 African economies have not sought to move away from primary products as such but have instead emphasized agriculture and agro-based industries. The mainstay of African economies has been primary products, and industrialization would need to proceed from that in order to have linkages within the economies. Investors in African economies likely have calculated that use of these primary resources justifies local investment. The scarcity of capital and technology has driven African economies to search for foreign investment, in part by adopting incentive regimes.159 The policies set under the LPA and FAL were prioritized and expanded because of the unfortunate economic and political conditions in Africa. African economies have relied heavily on the international community and international institutions to implement policies with the help of donor funding. African countries were compelled to follow policies advised by the World Bank and IMF, such as the structural adjustment programs (SAPs) and a series of UN programs,160 all of them heavily relying on donor funds. Various agendas prioritized food and agriculture, including the supportive sectors of industry, transport, and communications; protection of the environment to combat drought and desertification; human resource development; policy reforms to improve management of national economies; settling refugees and displaced persons; good governance and stability; and economic cooperation and integration.161 Policies and programs espoused by international institutions in the 1980s detracted from the work to create the AEC by the year 2000. This in part arose from the wide-ranging nature of policies required to address the economic crises at the time and from a reliance on funding from international institutions and foreign governments that had their own priorities. These policies focused on busting the top-heavy governments of the day—especially through austerity measures and privatization of state-owned enterprises—while largely ignoring the more important task of building social capital through education, retraining, health services, and innovation promotion.162 Critiques of the Washington 51

Consensus, which matured into poverty eradication strategy papers in the 1990s and anti-globalization movements in the 2000s, consistently observed that the state has a fundamental role in social and economic transformation, working jointly with the private sector and engaging with academia.163 What is certain, however, is that under the auspices of the OAU as well as international institutions and foreign governments, African heads of state have had final responsibility for policies implemented in Africa, even where advised or prevailed upon by development partners to pursue regressive austerity programs like in the 1980s. By the end of the 1980s, consensus emerged with development partners like the World Bank that economic cooperation and integration should be prioritized in Africa. A 1989 World Bank report fully endorsed and strongly recommended incremental economic cooperation and integration.164 The OAU Secretary-General’s report to the 26th ordinary session of the Assembly stressed economic integration and recommended recommitment to the LPA: The significance of the Lagos Plan of Action is that it has clearly identified Africa’s development objectives, the strategies to be followed in order to achieve those objectives, and the policy measures to implement the strategies. It is now the responsibility of the OAU Member States to incorporate the specific ideas and strategies of the Lagos Plan of Action into the national planning machinery of the individual countries, and to ensure that strategies which address issues at the sub-regional level are given proper attention in sub-regional planning and development. There is an urgent need for renewed commitment to the ideals, goals, and strategies of the Lagos Plan of Action. In 1991, African leaders concluded the AEC Treaty that implemented the LPA. The treaty was the embodiment of the integrated approach that provided for regional economic communities as building blocs for the AEC and called for cooperation in a number of key sectors such as agriculture, industrialization, and infrastructure. 2.4 Framework and roadmap for economic integration Economic integration is the process of combining national markets into regional markets by eliminating trade barriers between those national markets to form free trade areas. Deeper economic integration involves harmonizing external trade policies (to form a customs union), freeing the movement of factors of production (to form a common market), and coordinating economic policies of the participating countries (to form an economic union). At another level, economic integration may lead to common political institutions and civic integration. 52

A distinction can be made between economic cooperation and economic integration. Economic cooperation is a broad expression referring to joint efforts, often by governments, to pursue designated economic goals. Economic integration, on the other hand, either as a process or a result, is quite specific, generally referring to elimination of trade or economic barriers. As a process, economic integration involves the fairly standard stages of the free trade area, customs union, common market, economic union, and then complete integration in the form of a federation or political union.165 But as an end result, the meaning of economic integration is varied because of numerous forms adopted and the lack of a comprehensive legal instrument. The General Agreement on Tariffs and Trade (GATT) and the agreement establishing the WTO attempted to fill the void but have not kept pace with developments in the concept and practice of economic integration; they are largely confined to trade liberalization, dealing only with free trade areas (FTAs), customs unions and services, and intellectual property and dispute settlements. They also do not address regulatory policies that are ordinarily associated with later stages of integration. Examples of these include common markets and economic unions that can be undertaken during the earlier stages. To ensure macroeconomic stability, for instance, monetary and fiscal programs can be implemented during the early stages of FTAs and customs unions.166 To support efficient trade in goods, services integration programs can be initiated before a common market is reached. African heads of state and government have adopted economic integration as the overarching continental and regional development strategy. At the continental level, the AEC will be an integral part of the African Union. The AEC has a gestation period of 34 years starting from the date of entry into force (1994) when two-thirds of OAU member states ratified it.167 The regional economic communities will be building blocs in this program. Together with this inchoate AEC, there are economic communities in each of the African regions. In general, these RECs and sub-RECs form a complex web. Furthermore, according to the Sirte Declaration of 1999, which initiated the process of establishing the African Union, the 34-year gestation period is too long, and it called for certain stages to be expedited. Thus, the Pan-African Parliament (PAP) has already been established, although that was not supposed to happen until the sixth stage. The formation of the AEC is set out in Article 6 of the treaty establishing the community, though there are detailed provisions on the common market and sectoral cooperation further on in the treaty. The AEC is to be formed in six successive stages involving the strengthening of sectoral cooperation, establishment of regional free trade areas, a continental customs union and common market, an African monetary and economic union, and structures of the executive organs. 53

The first stage involves establishing or strengthening existing RECs within a period not exceeding five years from the date of entry into force of the treaty— that is, by 1999. Article 1 defines “region” to mean North, West, Central, East, or Southern Africa. In each of these regions, an economic community has already been formed. Therefore, this stage was accomplished before the deadline. Establishing RECs started long before the treaty entered into force. For instance, ECOWAS was initially established in 1975 even before the LPA.168 Some regional communities began in the 1960s under the OAU, with the support of the ECA, establishing economic cooperation and integration in Africa. Article 6 fully recognized the existence of RECs in some regions, and it provided for strengthening these. Indeed, those already established in eastern and western Africa were reestablished under the new, modified ECOWAS and COMESA treaties. In the case of southern Africa, the Southern African Development Coordination Conference of 1980 did not aim for an economic community. It was meant to be a bulwark against apartheid in South Africa. Though it intended for project-oriented economic cooperation and fell within the recommendations under the LPA, it did not have provisions on trade liberalization. The 1992 SADC Treaty called for an economic community, and in August 1996, a trade protocol for the creation of a free trade area was adopted.169 The second stage comprises four activities to be completed over a period not exceeding eight years, that is, by 2007: (1) stabilizing tariff and nontariff barriers and internal taxes; (2) preparing and adopting “studies to determine the timetable” for the gradual removal of tariff and nontariff barriers to regional and intra-community trade and harmonizing customs duties applied to products from third states; (3) strengthening sector integration especially in the areas of trade, agriculture, money and finance, transport and communications, and industry and energy; and (4) coordinating activities among the RECs. The second and fourth activities are not clear. It seems reasonable to interpret the second activity as the preparation and adoption of the timetable at the level of each REC.170 It is vital that the timetables adopted by the RECs are harmonized. Indeed, one organ should establish the timetable at the continental level for all the RECs, with annexes to cover any regional peculiarities. The third stage involves establishing an FTA in every region within ten years (by 2017), according to the trade liberalization timetable agreed upon during the second stage, and further establishing a customs union by adopting a common external tariff. This was likely to be a difficult stage, but the period of ten years was supposed to be adequate for member states to come to terms with consequences of the liberalization. This stage is difficult because it involves difficult political decisions to implement a liberalization timetable that is comprehensive enough to include mainstay industries and productive activities of member states. Liberalization 54

will likely harm some industries, but it might not be sufficient to attract escape and safeguard action under Article 35(1) and (5) for want of “serious damage to the economy of the importing state.” Once the timetable is established, political will and economic diplomacy will be necessary, but above all, enforcement of compliance, under a rule-based order, will be vital. This stage is also difficult because of common external tariffs for the regional communities. This is a questionable step for several reasons. Regional common external tariffs are erected against African states that are party to the treaty and are not included in the liberalization timetable. The timetable relates to the creation of regional FTAs and the continental customs union. It is possible, then, for a conflict to arise between the rates agreed upon under the timetable and those adopted as the common external tariff to intra-Africa trade, which would detract from the spirit and purpose of the whole process of economic cooperation and integration under the treaty. Further, regional common external tariffs are transient, as they will eventually give way to continental common external tariffs. Instead, the liberalization timetables for the RECs should be coordinated so that rates on imports tend toward both the continental FTA and a continental common external tariff right from the second stage.171 In addition, this avoids the duplicative process of creating an FTA and a customs union over separate periods. It is important that RECs do not adopt slower paces of trade liberalization, for varying and unending periods would clog the process of creating the community. The Assembly ought to take this into consideration in complying with mandatory Article 30(3): “During [the second and third stages] the Assembly, on the recommendation of the Council, shall take the necessary measures with a view to coordinating and harmonizing the activities of the RECs relating to the elimination of customs duties among Member States.” The third stage, then, should end with the creation of a continent-wide FTA through implementation of the trade liberalization timetables. According to Article 31, the third stage should also see elimination of nontariff barriers to trade. Another reason against regional common external tariffs concerns the general suitability of an effective common external tariff. If the tariff is excessive, its sole function is protectionist, which is undesirable for promoting benefits of reasonable competition. Protectionism against other African economies seems to be at odds with a scheme for economic integration and cooperation. But if a common external tariff is minimal, it could be a revenue-raising facility. If this tariff is collected centrally by a community institution, this method can be administratively convenient for raising revenue for community functions, which will include extensive development planning and implementation or monitoring of the programs. In practice, however, determining a merely nominal rate is hard and subject to political vagaries. Rather, regional common 55

external tariffs should not be applied against African imports, which should be treated under the regime for a continental FTA. This analysis already highlights the propriety of the decision the African heads of state and government took in 2012 to start negotiations for the Continental Free Trade Area and to establish it by an indicative date of 2017. The fourth stage is “coordination and harmonization of tariff and nontariff systems among the various RECs” to establish a customs union at the continental level, within a period not exceeding two years (that is, by 2019) “by means of adopting a common external tariff.” The meaning of “customs union” in this case is limited to the adoption of a common external tariff. Tariffs, however, are not the most important means of erecting barriers to imports; rather, nontariff barriers such as regulations for health and environment, standards, packaging, and orderly market arrangements are more regularly used. In addition to a revenue-sharing formula, then, a customs union should include the adoption of a common external commercial policy and common external regulations for health, quality, and standards. Article 67, which provides for a common policy and a protocol on standardization and measurement systems, should form part of the definition of the continental customs union. The gist of this stage should be coordination and harmonization of tariff and nontariff systems of the RECs. These harmonized systems should form the basis of a common external policy. The main aim should still be complete liberalization of trade within Africa by removing nontariff barriers in addition to the trade liberalization timetable, rather than erecting barriers to imports.172 In the fifth stage, an African common market is to be established over four years, that is, by the year 2023. Typical activities to be completed during this stage include: (1) adopting a common policy in areas such as agriculture, transport and communications, industry, energy, and scientific research; (2) harmonizing monetary, financial, and fiscal policies; (3) allowing free movement of persons and providing the rights of residence and establishment; and (4) constituting proper resources for the community. Member states are to cooperate by harmonizing strategies and policies in the development of agriculture, forestry, livestock, and fisheries to ensure food security, increased productivity, enhanced agricultural production, and protected prices of export commodities. They are to harmonize policies to promote industrial development. Basic industries—food- and agro-based, building and construction, metallurgical, mechanical, electrical and electronics, petrol and petrochemical, forestry, energy, textile and leather, transport and communications, and biotechnology—and small-scale industries are to be developed to provide a solid base for industrialization. Science and technology must be strengthened to bring about socioeconomic transformation. Member


states are to promote the exchange of researchers and specialists, reform educational systems, and harmonize and coordinate their national policies, programs, and positions on all scientific and technical questions. Cooperation is also provided for the following sectors: energy and natural resources; environment; transport, communications, and tourism; standardization and measurement systems; education, training, and culture; human resources; social affairs; health; population and development; and women and development. Article 77 provides for coordination of policies “in other fields for the efficient functioning and development of the Community and for the implementation of the provisions of [the] Treaty”—an appropriate provision given the likelihood of changed circumstances in the long run. The sixth and final stage, to be achieved by the year 2028, describes the various activities to be accomplished in the formation of the AEC.173 First, it calls for further work on the African common market. Second, it mentions the integration of all sectors (namely economic, political, social, and cultural) and the establishment of a single domestic market and a pan-African economic and monetary union. Third, it deals with the implementation of the final stage for setting up an African monetary union, establishing a single African central bank, and creating a single African currency. The fourth point is on the implementation of the final stage for setting up the structure of the pan-African Parliament and electing its members by continental universal suffrage. Fifth, it calls for the implementation of the final stage for synchronization of the activities of RECs. The sixth item deals with the implementation of the final stage for setting up the structures of African multinational enterprises in all sectors. Lastly, it calls for the creation of the executive organs of the AEC. In regard to the nature of the AEC, Article 1 defines “community” as “the organic structure for economic integration established under Article 2 of this treaty and constituting an integral part of the OAU.” Article 2 provides that “The High Contracting Parties hereby establish among themselves an African Economic Community.” This definition indicates merely that the AEC has been established as a structure, but it does not explain what the AEC entails or what its elements are. To identify the final form of the AEC, policymakers can refer to Article 6 for guidance on the process and the end result, which should mark the completion of the listed activities. As prescribed, the AEC has a pan-African economic and monetary union with a single African currency, pan-African parliament, and integrated sectors with parastatal-multinational enterprises. Another question is whether political unification is an element of the AEC. The sixth stage includes the “integration of all sectors namely economic [and] political . . . ,”174 establishing a Pan-African Parliament, and setting up executive organs of the Community. A functioning PAP and appropriate organs with executive functions would lead to a degree of political unification, and it is an alternative to forming a union government. 57

There is, however, considerable lack of clarity in the provisions. Integration of the political sector is unclear, but it could refer to the creation of the parliament and the executive organs. It could mean also agreement on systems of government, which would entail setting criteria for membership such as democratic governance, a respectable human rights record, and implementation of policies satisfying the requirements of collective self-reliance and selfsustaining development. This further implies more autonomy for the Council of Ministers as a political organ of the AEC, comprising relevant ministers concerned with the matters of the agenda and specialized ministerial meetings. Regarding executive organs, it is unclear whether additional organs are to be established apart from those already described. But given that there are no executive organs apart from the Assembly, it should be expected that those in place will be given executive powers, especially regarding formulating, monitoring implementation of, and requiring compliance with policies in addition to policing compliance with treaty provisions. Almost all these functions are assigned to the Assembly. The PAP is a good organ for political integration if it receives appropriate functions and powers, such as the ability to legislate and to censure other organs and political leaders. However, Article 6(2)(f)(iv) provides for “implementation of the final stage for setting up the structure of the [PAP] and election of its members . . . � without indicating what the prior stages or improvement would have been. There is no doubt, however, that the PAP was supposed to be set up and constituted in this last stage. The better approach would be to involve the public as early as the first stage to have a fully operational PAP, which is what has happened, as the PAP was established and has been functional since its inauguration on March 18, 2004, during what was the second, not sixth, stage. 2.5 Conclusion The main lesson here is that Africa designed a vision and mapped it out into a systematic and realistic long-term program, covering themselves well into the future. Providing a long-term roadmap created opportunities for experimentation as well as accommodation of unplanned institutional innovations. With some examples of early improvement, policymakers learned that the timeframes for the long-term trajectory could be abridged in light of pressing realities and challenges. Thus, the African Union and the pan-African Parliament became formidable forums for discussing continental issues. Even more pertinent is that in a short space of five years, a program for establishing the Continental Free Trade Area and an action plan for boosting intra-Africa trade moved from a design stage in 2010 to the launching of negotiations in June 2015.175 This clearly demonstrates both the strong potential and the need for leadership in Africa.


The translation of vision into long-term policies and programs requires supporting laws and treaties. Negotiations during the diplomatic conferences that produced those instruments were learning moments and led to institutional memory retained by the secretariats and within governments. This broad, long-term template produced and adopted at the continental level was actually reflected in the legal instruments of the RECs. This harmonization of vision and approach throughout Africa, from the continental to the regional levels, has amounted to a codification of Africa’s priorities and of the approach to addressing inherent developmental challenges. As in all cases of long-term plans, there is a need for adjustment, and this preparedness is critical in allowing advancement through innovation. The various adjustments made in terms of the actual regional economic communities established, and the speed at which they are moving, has confirmed that policy space should be allowed to accommodate flexibility. Above all, though, the RECs provided fertile ground for trial and error and for learning valuable lessons. The foremost lesson was the urgent need for coordination of policies and regulations across the regional economic communities. Three RECs, namely COMESA, EAC, and SADC, took this lesson so seriously that they started the process of establishing a Tripartite Free Trade Area. This in turn inspired policymakers to initiate work on the Continental Free Trade Area.





This part provides some first-hand material on actual operationalization of the aforementioned roadmap and begins to substantiate the argument of experimentation and learning. This is a treatment of the challenges, experimentation, and learning that went into actually getting a regional integration program off the ground. Economic integration in Africa started with a plan for continental integration followed by experimentation and learning at the regional level, which provided lessons for consolidation at the Tripartite and continental levels. Taking the approach of developmental integration since the 1980 Lagos Plan of Action and the 1991 African Economic Community Treaty, which set the goal of progressively establishing the African Common Market and Economic Community, market integration was complemented with programs designed to produce goods, services, and assets for trading on the larger regional market. Complementary programs included industrialization and infrastructure building as well as agricultural modernization and innovation. The continental institutional framework established to oversee the vision and roadmap provided the forum for cross-learning across the regional bodies that were established, and it harnessed best practices and insights to develop further at the continental level. This process progressively emerged out of the chaos and disequilibrium of the 1950s and 1960s, and it required institutional engineering and innovation to offset the lack of pre-existing practices. We examine the Common Market for Eastern and Southern Africa as a case study for in-depth examination of some of its flagship market integration programs. Trade negotiations and facilitation have been key priorities of COMESA since its founding. The crux of economic integration is free movement of goods, services, people, investments, and the right of establishment—together with sectoral cooperation that provides infrastructure, industry, and innovation. Performance on market integration is therefore critical in progress towards the continental vision of a common market and economic community. As African regional bodies are part of the global trade community, negotiations and regimes with key partners are also examined against the backdrop of the continent’s economic integration. Two traditional partners, the European Union and the USA, and two emerging partners, China and India, are considered below. The development vision of Africa has implications in international economic relations, which we also explore.


3. Origins and evolution of regional communities 3.1 Experimenting with regional communities 3.2 Progress made by the regional economic communities 3.3 Regional entry points 3.4 Functional convergence 3.5 Conclusion Regional integration theory utilizes the fields of science, economics, history, and politics in order to view Africa’s situation in a holistic manner. Africa followed an overall approach of developmental integration based on political, institutional, economic, and legal experimentation. The shared experience of seeking freedom from colonization and pursuing expedited economic development allowed the continent to address systemic imbalances in the international economic order through interventions at the regional and national levels. This chapter first explains regional integration institutions and frameworks as complex adaptive systems. It shows how multiple regional bodies were established in Africa, leading to rationalization initiatives that eventually settled for a convergence of programs, a designation of recognized regional bodies, and a moratorium. The chapter then assesses implementation and progress on key landmarks of the regional bodies. The long-term roadmap under the AEC Treaty envisages establishment of regional bodies, FTAs, and customs unions by 2019 in the five regions of Africa. This chapter then explains entry points by the regional bodies and illustrates what they have continued to do well. Increasing complexity that matched the emerging development challenges finally resulted in functional convergence across the regional bodies, thus bringing order out of the chaos. Regional economic integration in Africa is the essential foundation for social economic transformation of the continent. Trade has provided a motherboard for integration programs that achieve a freer movement of products, assets, and people while creating sizeable markets that support critical levels of investment in industrialization and infrastructure. Trade has thus been conceived as a 63

development tool that works in an integral and simultaneous manner with other solid programs (particularly on industrialization, infrastructure, agriculture, innovation, and governance) in order to create jobs and wealth for inclusive human development. This developmental integration has been seen as a responsibility not just for the private sector, government, or academia but for all stakeholders. The real process of economic integration in Africa happened in the regional economic communities. Identification of the entry points was not a fancy choice for building regional reputations but rather an impetus for addressing challenges on the ground. What we do now is shaped by our imagining of the future, and just as simple cells attain increasing levels of complexity, similar patterns are at work in political and social systems. This chapter looks at various regional economic communities in Africa to analyze where they have succeeded in pursuing particular public policy objectives stemming from specific developmental challenges that faced them. Examples include how the Economic Community of West African States (ECOWAS) pursued peace and democracy in an environment of endemic havoc, strife, and dictatorships; how the Southern African Development Community (SADC) built infrastructure out of the ruins inflicted by the liberation struggles and apartheid governments; how the Intergovernmental Authority on Development (IGAD) tackled drought and desertification in the Horn of Africa; how the Common Market for Eastern and Southern Africa (COMESA) increased the size of the regional market through trade facilitation to enable critical levels of investment in production and infrastructure in eastern and southern Africa; and how the East African Community (EAC) achieved integration quickly on a range of issues such as free movement of persons, communication, and education. As can be seen, these examples are drawn from the four main regions of Africa. The Economic Community of Central African States (ECCAS) was dormant for quite some time and did not advance an outstanding priority program in the context of African economic integration. The more active organizations were the Central African Economic and Monetary Community (CEMAC) and the West African Economic and Monetary Union (UEMOA), particularly in terms of their monetary power. However, ECCAS is back on track with its integration programs, and in light of the peace, security, and transportation challenges in the region, entry points can be expected around those areas. ECCAS currently spends 80% of its total budget on peace and security, clearly identifying this area as an entry point. However, other priorities will reflect the overall momentum on the continent generated by Agenda 2063, which identifies some continentwide flagship programs such as establishment of the Continental Free Trade Area, a single African air transport market, and a regime for free movement of people. These examples of original entry points for regional economic integration in the sub-regions are best studied in terms of their insights about the path from 64

chaos to order. This chapter first posits regional bodies as complex adaptive systems, sets out the implementation achieved in the various regional bodies, and then explains the entry points. 3.1 Experimenting with regional communities Programs adopted at the regional and continental levels were encapsulated in legal systems as constitutive instruments with a raft of organs established to oversee, apply, continuously review, and make them more fit for purpose.176 As Teubner and Bankowski argue, law is a system akin to autopoiesis.177 Sociallegal systems reflect the life of biological cells; human thought and systems self-propel towards evolution in accordance with communication institutions that are built into those social-legal systems. Ruhl et al. go a step further and view legal systems as complex adaptive systems. As they explain: Legal systems exhibit what complexity scientists identify as hallmark elements of complex adaptive systems. The diverse institutions (e.g., legislatures, agencies, and courts); norms (e.g., due process, equality, and fairness); actors (e.g., legislators, bureaucrats, and judges); and instruments (e.g., regulations, injunctions, and taxes) are interconnected through stochastic processes (e.g., trials, negotiations, and rulemakings) with feedback mechanisms (e.g., appeals to higher courts and judicial review of legislation). These are all embedded in hierarchical and nonhierarchical network architectures (e.g., cross-references between statute provisions and judicial opinions, as well as hierarchies of federal, state, and local governance institutions) that frequently produce self-organizing properties (e.g., emergence of common-law doctrines or codified statutory law). Agents typically exercise bounded rationality, have only partial information, and are able to exercise only varying degrees of control on overall system behavior.178 Similarly, regional economic communities and the AU at large, together with their political and legal organs and frameworks, can be viewed as complex adaptive systems. These systems function at the regional and continental levels, but they also exist and operate within a broader global context of international relations and the international economic order. The vision of Africa under Agenda 2063 is “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”179 Africa continues to make its contribution to the global order. The “spaghetti bowl effect,” an expression popularized by Jagdish Bhagwati, has been used to describe the numerous and overlapping regional 65

economic organizations in Africa.180 There are at least 14 such organizations, and 26 African countries belong to two simultaneously; 20 countries belong to three; the Democratic Republic of Congo and Kenya enjoy the distinction of belonging to four; and a mere six African countries belong to one single REC.181 Multiple and overlapping RECs are problematic for a number of reasons. They are costly because of subscriptions or mandatory monetary contributions to their budgets. Attending intergovernmental processes is time consuming for members. Implementation of obligations is extremely challenging especially where organizations have conflicting requirements. Compliance with the rules on a day-to-day basis by administrations, such as the customs authorities, can be a strain if the rules are contradictory. The users of the regimes, such as producers and the logistics industry, incur the costs of understanding and utilizing complex rules.182 The Africa-wide systemic problem is that too many regional economic communities (in this case, 14) run counter to the design and mapping of the continental integration process. The five regions of Africa—East, West, South, Central, and North—are each supposed to have one regional economic community, which, when combined, form the five building blocs of the African Economic Community. Following a report by the African Union Commission and the 2006 Report of the Economic Commission for Africa183, the African Union devised a rationalization program for the integration process. The program was based on two principles—one country, one REC and one region, one REC. Components included scenario-setting studies, awareness-creation and mobilization workshops, deliberations in formal meetings, and recommendations for decisions. In the end, the African Union Ministers responsible for economic integration at a March 30-31, 2006, meeting agreed to put a moratorium on the establishment of new RECs in Africa and to recognize eight regional economic communities as the building blocs for continental integration, namely: the East African Community (EAC),184 Common Market for Eastern and Southern Africa (COMESA), Intergovernmental Authority for Development (IGAD), Southern African Development Community (SADC), Economic Community of Central African States (ECCAS),185 Economic Community of West African States (ECOWAS),186 Community of Sahel-Saharan States (CENSAD), and the Arab Maghreb Union (AMU) in North Africa.187 Organizations that were not recognized include SACU in Southern Africa, CEMAC in central Africa, and UEMOA in West Africa, all of which are customs or monetary unions.188 This recognition of eight regional economic communities did not achieve the objectives of one country-one REC or one region-one REC. The opposition was quite predictable. Countries join organizations as sovereign decisions taken on the basis on national interests. Tunisia, for instance, sought to join COMESA in 2017 to gain access to its large, vibrant ICT, tourist, airline, and apparel 66

industries. Countries may also join organizations for purely political reasons that trump arguable economic downsides. For instance, SADC was a solidarity organization for frontline states that fought for decolonization in southern Africa, so Tanzania and Zimbabwe made it categorical that they join because they fought apartheid in South Africa. Other reasons may be cultural and historical. The EAC presidents, for example, opposed the recommendation that the EAC should be shut down because it was too small. Regional specificities or challenges may catalyze formation of a REC. The Intergovernmental Authority on Drought and Desertification, for instance, was formed to address the harsh climatic conditions as well as endemic conflicts in the horn of Africa and neighboring countries. It has subsequently been renamed the Intergovernmental Authority for Development with a wider development mandate covering transportation, energy, communication, and trade. Since 2001, COMESA and SADC have improved coordination of their programs and encouraged cooperation between the two secretariats. This resulted in a clear conviction that rationalization was an unnecessary distraction. Rather, the best way to achieve continental integration was for the countries to converge and implement regional programs together in a coordinated or harmonized manner as appropriate, rather than forcing countries into compartmentalized regional economic bodies. By 2005, the EAC formally joined the COMESA-SADC convergence approach, which eventually morphed into the COMESA-EAC-SADC Tripartite initiative that sought to prioritize the convergence of programs such as FTA, industrialization, infrastructure, and movement of persons and services.189 3.2 Progress made by the regional economic communities As explained in the last chapter, the African Economic Community will be established progressively in six stages over a 34-year period from 1994 to 2028, using the regional economic communities as building blocs. The six stages include establishing regional organizations, strengthening them, forming regional free trade areas (which require free movement of goods) and customs unions by 2017, merging these customs unions into a continental customs union by 2019 (which requires a common external tariff and commercial policy as well as a common customs law), transforming that union into the continental common market by 2023 (which requires free movement of goods, services, labor, and capital as well as the right of establishment), and, finally, forming a continental economic union by 2028. The East African Community has made the most progress. It established its customs union on schedule in 2005, adopted a single customs territory program to progressively allow free circulation of goods, and became a common market in 2010. The Economic Community of West African States has been a functional customs union since January 2015 after implementing a trade liberalization 67

program, and it has made significant progress on movement of persons by adopting a common passport and biometric system. The Common Market for Eastern and Southern Africa has been a functional free trade area since 2000, and it launched its customs union in 2009 on a transitional basis. COMESA has implemented a visa relaxation program to facilitate movement of persons and has completed negotiations to liberalize trade in the transport, communication, financial, and tourism services. The Southern African Development Community established a free trade area in 2008 and shelved its customs union program. SADC has deepened its FTA beyond the 85% trade liberalization achieved in 2008 to 97% by 2017. These RECs improved in other areas of integration as well, including industrial and infrastructure cooperation. The other four recognized RECs have been established, thus completing the first stage, but have not achieved functional free trade areas or customs unions. Although IGAD’s consultations on the establishment of the free trade area continue as of 2017, the region has made significant advancement in road transport and energy interconnectivity, water resource management, and climate change challenge solutions for drought and desertification. ECCAS was largely dormant over the last two decades while much of the action happened in CEMAC, which achieved a customs union. ECCAS has a free trade area program, as do the Community of Sahel-Saharan States adopted in 1998 and the Arab Maghreb Union adopted in 1991.190 CENSAD and AMU have been dogged by debilitating political instability and internal conflict. It is well known that CENSAD was a brain child of Libya’s Colonel Gadhafi. Since his death in 2011, CENSAD has been crippled and suffers from competing membership in COMESA, ECCAS, and ECOWAS. CENSAD’s regional integration programs have therefore been behind schedule or remain largely unimplemented, and the importance of this REC has diminished despite its geographical reach from North through Central to East Africa. The Arab Maghreb Union was established in 1989 and adopted a trade regime in 1991.191 The AMU’s market integration program covers the establishment of a free trade area, a customs union, and a common market. In December 2009, AMU formed the Maghreb Bank for Investment and Foreign Trade and, in 2014, established a committee for boosting intra-African trade. The AMU, however, has been hobbled by political rivalry between Algeria and Morocco and by the Western Sahara crisis for years. Then in December 2010, the Arab Spring began in Tunisia. By 2017, Libya was still in a state of civil strife and registered a negative economic growth rate. Between 2010 and 2015, the economies of Tunisia and Libya (AMU members), together with Egypt, registered a 0% economic growth rate. It is worth noting that member states of the AMU are actively seeking a prominent presence in the rest of Africa—Tunisia and Morocco applied for membership in COMESA and ECOWAS respectively, and Morocco was 68

formally readmitted to the African Union in 2017. The prospects for the AMU integration programs will likely improve as the region stabilizes and continental integration gathers speed under the Continental FTA initiatives, provided traditional rivalries and bilateralism do not prevail. Examination of the performance of the RECs should be seen in the context of the Tripartite and Continental free trade areas, which are designed to expedite implementation toward continental integration. The Tripartite FTA greatly inspired the efforts to establish a continent-wide free trade area, and five days after it was signed on June 15, 2015, African leaders launched negotiations for the Continental Free Trade Area. The message here is unmistakable—Africa is determined to accomplish continental economic integration. 3.3 Regional entry points Peacekeeping ECOWAS identified peacekeeping and democratic governance as pillars of its economic development when the terms “democratization” and “good governance” were buzzwords around the continent. It sought to achieve this through formation of a standing regional military that would be on standby for deployment to address the internal and cross-border wars as well as military dictatorships rife in the region in the 1980s and 1990s. ECOWAS’s peacekeeping track record is tangible and impressive. Military operations restored peace and democracy in Liberia, Sierra Leone, Guinea Bissau, Côte d’Ivoire, and the Gambia. The existence of the military force has been a deterrent to new conflict as well. This role has emerged despite earlier concerns that there were too many regional bodies with overlapping functions whose competition was likely to affect the effectiveness of peacekeeping efforts.192 ECOWAS was the first regional body in the world to be involved in peacekeeping. Its role received considerable attention in 2016 when political drama arose in the Gambia. It highlighted the long tradition of the bloc in focusing on military action instead of the expected emphasis on trade matters. Its role helps to illustrate how Africa’s regional integration efforts are broader than just trade liberalization—they are concerned with long-term development. They are institutional innovations that reflect the far-from-equilibrium conditions in the regions. The blocs serve both as organizing frameworks for action on key issues and as catalyzers for the needed activities. In 2016, incumbent Yahya Jammeh lost the vote in the Gambian presidential elections and conceded to the opposition leader Adama Barrow. A week later Jammeh changed his mind, called for new elections, and refused to relinquish the office. Barrow had suggested that Jammeh be charged for his misrule of the country. Fearing for his life, Barrow fled to Senegal and a crisis ensued. ECOWAS intervened and set a deadline for Jammeh to relinquish power. To 69

show that ECOWAS was sincere and willing to comply with the Gambian constitution, Barrow was sworn in on January 19, 2017, in the Gambian embassy in Senegal. That day, ECOWAS troops surrounded the Gambia. Senegalese and Ghanaian ground troops entered the country, supported by the Nigerian air force and navy. A total of 7,000 ECOWAS troops were pitted against the Gambian force of 2,500. The Gambian army chief, together with the naval chief, publicly announced they would not fight the ECOWAS troops. General Ousman Badjie declared, “I am not going to involve my soldiers in a stupid fight. I love my men.” Following some brief skirmishes between the Senegalese company and scattered remnant loyalists, Jammeh announced that he would step down, and ECOWAS made arrangements for him to go into exile in Equatorial Guinea. Barrow returned to the country to jubilant crowds. ECOWAS maintained a military presence in the country for a period of time to ensure stability. This example illustrates how ECOWAS developed the capacity to combine diplomacy and military force to promote peace and democratic transition. It has a track record of restoring constitutional rule by removing imposters and organizing democratic elections, stopping internal conflicts, protecting populations, and fostering regional peace and security when threatened. To this end, ECOWAS has conducted operations in Liberia, Sierra Leone, Guinea Bissau, and Côte d’Ivoire. ECOWAS always undertakes a thorough diplomatic and consultative phase and involves both the African Union and the United Nations before resorting to armed intervention. In the case of the Gambia, for instance, the Fiftieth Ordinary Summit of ECOWAS held on December 17, 2016, in Abuja extensively reviewed the diplomatic activities up to that point, and it arrived at its decision based on an assessment of the situation on the ground. Though mooted much earlier, ECOWAS was only established in 1975 at the suggestion of the Nigerian Minister of Economic Development and Reconstruction, Adebayo Adedeji. It was initially created to promote cooperation and development in all economic activities, with the establishment of a free trade area (FTA) as a key objective. ECOWAS set out to pursue the “elimination of trade and non-trade barriers, including disparate customs duties and charges; the creation of a common and harmonized customs regime; the removal of administrative and quantitative restrictions on trade; and the creation of a conducive environment for the free movement of goods, services, capital, and people.”193 Furthermore, “the organization was also to promote the harmonization of monetary, agricultural, economic, and industrial policies; create a special fund for cooperation, compensation, and development; address uneven development among member states; and reward countries that were economic losers from the FTA or the regional integration process in either the short or the long term.”194 70

There had been ambivalence over integration in the 1960s, due in part to differences between Ghana’s President Kwame Nkrumah, who wanted immediate continental unification, and Nigeria’s Prime Minister Abubakr Tafawa Balewa, who supported gradual integration. When they left power in 1966, the region descended into chaos. The Biafran War broke out in 1967 in Nigeria and lasted three years. Then the Anglo-Francophone rivalry, led by Nigeria and Côte d’Ivoire, greatly frustrated progress toward regional integration. A core group of military leaders stepped in, including the presidents of Nigeria and Togo, and they later incorporated the presidents of Dahomey (now Benin), Ghana, and Niger. With the escalation of conflicts in the region, peacekeeping emerged as a critical starting point for creating an environment that enabled development in general and free trade in particular. This forced ECOWAS to focus on the immediate challenges of peacekeeping as a prerequisite for development. With its initial mandate on development, the task of peacekeeping fell to France. Nigeria, however, considered the region as its sphere of influence and sought to shift the mandate of ECOWAS to suit its political, strategic, and economic interests. These efforts led to the 1993 Revised ECOWAS Treaty, which commits member states to the “promotion and consolidation of a democratic system of governance” and the “promotion and protection of human and peoples’ rights.” It called on member states to find pacific settlements of dispute and promote peace as a basis for development. The Revised Treaty “therefore establishes a symbiotic linkage between the maintenance of regional peace, stability, and security and economic cooperation and development in the subregion.”195 The ECOWAS Mediation and Security Council understood the importance of both peace and security for development back in 2008 and of adopting an aggressive advocacy and communication strategy to underscore the linkages. It determined that ECOWAS has been successful “both at the normative level (adopting appropriate protocols) and at the operational level (utilizing multi-faceted interventions to prevent violence, restoring peace where violent conflict has broken out, and stabilizing the political situation in post-conflict environments),” though this was not appreciated by the wider public within the region or throughout the world. The military operations of ECOWAS, just like other conflicts around the world, can be followed in real time throughout the world, which was the case in January 2017 when ECOWAS intervened in the Gambia. Some critics have argued that peacekeeping in ECOWAS and in SADC has been undertaken purely out of national self-interest to prevent adverse spill-overs into the hegemons of these regions.196 This assessment requires contextualization within the entire experience of ECOWAS so far. The objectives of ECOWAS as set out in its constitutive Treaty of 1975 were largely economic and based on creating large markets for trade and investment and 71

sectoral functional cooperation.197 The challenges on the ground, however, were what actually shaped the entry points for the ECOWAS integration priorities. In the West Africa of the 1970s and 80s, intra- and interstate conflicts were a serious national and regional issue that could not be ignored. It fell on ECOWAS to respond as part of the emergence of a new African peace and security architecture.198 The realization that peace and security could not be ignored followed swiftly after ECOWAS was established in 1975, and military leaders of the time heeded this. Already in the 1970s and 80s, the region was rife with internal conflicts resulting in a significant number of deaths and refugees, which was obviously not conducive to economic development. Causes of internal tensions arose from such issues as ethnicization, corruption, election fraud, unlawful change of government, and economic mismanagement. Some of these conflicts were also fueled and supported by operatives in neighboring countries. Although it started small, ECOWAS evolved into a full-scale regional peace and security apparatus. Projecting from the 1975 Treaty’s principles of cooperation, mutual assistance, and nonaggression, the following instruments were gradually adopted: the nonaggression protocol in 1978; the mutual assistance in defense protocol in 1981; the declaration of political principles in 1981, underscoring the duty to protect human rights; article 58 of the Revised ECOWAS Treaty of 1993, which provided for the supranational nature of ECOWAS to handle intra- and interstate conflicts; the declaration of a moratorium on light weapons imports in 1998; the comprehensive protocol on conflict prevention, management, resolution, peace-keeping, and security of 1999, which provided for conflict resolution and post-conflict reconstruction; the supplementary protocol on democracy and good governance of 2001; and the ECOWAS Conflict Prevention Framework of 2008. ECOWAS acted as a learning organization and proved ready to put lessons into practice to improve its peace and security architecture. According to the assessment of the ECOWAS Mediation and Security Council, the region has done well “by containing violent conflicts in the region and carrying out conflict prevention interventions through preventive diplomacy initiatives—factfinding missions, quiet diplomacy, diplomatic pressure, and mediation” and through establishing “several promising conflict prevention organs to underpin its mandate, including the Early Warning System, the Mediation and Security Council, Offices of the Special Representative, the Council of the Wise and Special Mediator”. On the other hand, the council also felt that “. . . the implementation of the preventive aspects of the Mechanism has at times lacked a strategic approach. It has been characterized by weak internal coordination, underutilization and misdirection of existing human capacities, as well as the deployment of limited instruments. In particular, the distribution of roles and responsibilities between 72

ECOWAS and Member States, between ECOWAS and civil society, as well as between ECOWAS and external partners is weak, resulting in the utilization of limited instruments, piecemeal interventions, and late response to crises. The development of a strategic framework to underpin the preventive aspects of the Mechanism has, therefore, become imperative.�199 The ECOWAS instruments have operated together with the African Union counterparts including the Constitutive Act of 2000 and the AU protocol on the Peace and Security Council of 2003, which resulted in the African Peace and Security Architecture and setting up a comprehensive continental framework for conflict prevention and resolution. This architecture includes close cooperation among the eight regional economic communities, each of which has a liaison office at the headquarters of the African Union Commission in Addis Ababa, and conversely, the African Union Commission has liaison offices at the secretariats and commissions of the RECs. The architecture also covers early warning systems and standing diplomatic arrangements under committees of elders. Just like ECOWAS, other RECs established peacekeeping and peace and security arrangements, notably SADC and EAC. SADC mounted operations in Lesotho and Madagascar to restore democracy as well as in the Democratic Republic of Congo to address external aggression and internal instability. Burundi and Uganda, EAC countries, have contributed troops for peacekeeping operations in the Horn of Africa, especially in the failed state of Somalia. The political leadership of ECOWAS took up the challenge of ensuring peace and security as a pre-condition for achieving the original socioeconomic objectives. Over the years, a comprehensive philosophy and mechanism were elaborated to underpin the operations and to execute them more proficiently. The right of member states and the Community as a supranational entity acting together to prevent conflict, react to conflict, and rebuild post-conflict societies is now indubitably part of the corpus of the law, practice, and political norms of ECOWAS. This initial entry point was a response to the security challenges in the region. The evolution of ECOWAS shows the extent to which a flexible regional body that can adapt to change reinforces the overall mission of the African Union. Regional bodies provide the requisite diversity in relevant responses and enable the African Union to provide support in ways that are consistent with regional needs. What emerges from such a relationship is the development in the complexity of the overall institutional structure of the continent, which allows it to provide the order needed to pursue consistent development objectives. The focus between the AU and the RECs in this regard should be about strengthening complementarities. Reducing the diversity under the guise of eliminating duplication will only remove the complexity needed to respond to challenges at different levels. It is also notable that these arrangements help to strengthen the agency of member states that are able to assert their strategic interests in the regions in line with the aspirations of the AU. 73

Apart from peacekeeping, ECOWAS prioritized free movement of persons as well. The ECOWAS passport was a novel and path-breaking initiative in Africa to facilitate free movement of persons in that region. Further progress and confidence from successful operation of the free movement of persons program over the years has now seen the introduction of a biometric system for regional travel. The focus on peace and security is not a substitute for trade integration. It is a prerequisite. Infrastructure Regional integration in Africa has evolved through experimentation focusing on immediate needs facing groups of countries. The underlying objective of regional integration has been overall development through different groups of countries using different entry points. One of the highlights of regional integration in southern Africa has been a focus on infrastructure development. Infrastructure is one of the pillars of regional development of the SADC member states, which include Angola, Comoros, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. Many of these 16 countries are small and isolated economies that rely on transnational river basins for their water. Six of them are landlocked, six have a population of fewer than 10 million people, and ten have economies smaller than US$10 billion per annum. These SADC countries face a difficult economic geography, a factor which reinforces the importance of a regional approach to infrastructure development. Linking these emerging economies more closely together would help to create larger markets and greater economic opportunities in the region. Infrastructure is at the core of Africa’s regional integration and economic development. The SADC nations, for example, are currently growing at a rate of 4-7%, which is mainly driven by their sound macroeconomic policies, rising external demand, high international metal prices, climbing global income, and increasing capital flows. 200 For SADC nations to sustain this growth, they will need to diversify their economies, focusing on greater beneficiation and value addition of commodities, which will help create local employment. For this to happen, intra-regional distribution networks must improve, institutional capacity to attract sustained capital must strengthen, and domestic savings and investment must also increase. Efficient, integrated, cost-effective infrastructure is therefore critical for advancing regional integration in SADC. Investment in infrastructure in the SADC region was for many years designed to meet the needs of the apartheid regime and the colonial rulers.201 The road networks, for instance, were designed to make it easy for military vehicles to reach camps to deliver military hardware. Infrastructure development was also intended to enable farmers to deliver produce to markets, as they occupied a 74

strategic place in colonial and apartheid regimes. The design therefore lacked a sense of permanence and was mainly geared toward meeting short-term needs. This short-term approach was also fitting for the apartheid and colonial governments in the event that they had to withdraw from Africa. In Zimbabwe, the road networks were narrow and simply designed to provide the transport infrastructure relevant to the war. The nature of roads revealed the isolation status imposed upon Zimbabwe as a price for its unilateral declaration of independence. Rail infrastructure also existed in southern Africa, and although it served the farming community well, it did so at the expense of the rural masses that never had access to the same infrastructure. Rural areas in Mozambique, for instance, were without proper infrastructure. In Angola, the transport infrastructure was also poor and designed to enable military vehicles to cross into different parts of the country in pursuit of war. South Africa had narrow road networks that strategically linked military points with areas within the government and also to the farming communities, but little was done for the rural areas. Road networks that connected South Africa and neighboring states were also narrow. Overall, it is evident that infrastructure development during the colonial and apartheid era was geared toward facilitating war rather than enhancing development. The frontline states were a loose coalition of southern African countries opposed to apartheid who reversed this tide through the Southern African Development Coordination Conference (SADCC), which started in Lusaka in 1980.202 Ratified by nine countries (Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia, and Zimbabwe), a memorandum of understanding on common economic development principles provided the basis for SADCC, which was succeeded by the Lusaka Declaration (entitled “Southern Africa: Towards Economic Liberation”). SADCC was formed to advance the cause of national political liberation in Southern Africa and to reduce dependence on apartheid South Africa by coordinating the specific strengths of each country and its resources. The four principle objectives of SADCC were as follows: to reduce member states’ dependence on apartheid South Africa; advance regional integration; mobilize member states’ resources to promote national, interstate, and regional policies; and secure international cooperation within the framework of the strategy for economic liberation. Until these nations came together under the umbrella of SADCC to advance common economic development, apartheid South Africa had exercised economic hegemony over its neighboring nations. And even though these nations opposed apartheid, a majority of their citizens were working in South Africa, and their economies were directly tied to South Africa by the Southern African Customs Union, which was responsible for the collection and distribution of revenues generated from tariffs. 75

Through SADCC, the countries got the South African government to open dialogue with the liberation movements within South Africa. This furthered the isolation of South Africa from the international community as more European countries and the United States increased their support for the SADCC. In 1992, heads of government in the region agreed to transform SADCC into the Southern African Development Community (SADC), an intergovernmental organization whose goal was to further socioeconomic cooperation and integration as well as political and security cooperation among its member states. Similar to the rest of Africa, sound infrastructure in southern Africa is a critical determinant of development. Over the period 1995–2005, infrastructure improvements primarily in mobile phones boosted southern Africa’s growth by 1.2% per capita per year. Other infrastructure development, such as improvements in the road networks, impacted growth. Inadequate power infrastructure, on the other hand, has been problematic and has been eroding growth in southern Africa.203 SADC has a well-developed regional road network that is in relatively good condition, with almost all corridors paved. The north-south corridor is the main trading route connecting South Africa with its neighbors to the north, including Botswana, the Democratic Republic of Congo, Malawi, Zambia, and Zimbabwe, and it is also used to access the sea. Two corridors run east to west and connect South Africa with Namibia through Botswana, and Mozambique with Zimbabwe and Malawi. Dar es Salaam provides access to the sea for Zambia, Malawi, and the Democratic Republic of Congo.204 Nevertheless, rail freight often encounters long delays as it moves across borders. Poor coordination between various national rail systems leads to lengthy locomotive interchange periods. Long delays and unreliability of rail service lead to a preference for the road network. Improving the performance of national systems will allow them both to compete more effectively with road transport and to play an appropriate role within a multi-modal transport system.205 In the ports, southern Africa also has the potential to create a more effective transshipment network centered on Durban and possibly Dar es Salaam. Ports in southern Africa are more advanced than in other parts of Africa but are inefficient globally, and port charges are relatively high. The ports at Durban and Dar es Salaam lack the capacity to handle the demand, leading to long waiting periods and congestion. Other southern African ports are not large enough and lack adequate land-based infrastructure access. The SADC air transport market is the largest in Africa, with a clear huband-spoke structure and at least one daily flight between Johannesburg and each SADC country. Since South African Airlines is the dominant carrier, however, the percentage of flights flown by carriers that are not registered either in the origin or destination country is lower than in other parts of Africa. Furthermore, 76

SADC has made relatively little progress toward liberalizing its air transport market, which ranks behind most regions of Africa.206 The SADC power transmission network “leads the rest of the continent in generation capacity and offers power at relatively low costs.”207 Despite this capacity, widespread access to power in SADC is low. Furthermore, “with power demand likely to increase by 40% over the next decade, expanding power infrastructure is critical to the region’s economic future.”208 Compared to any of the other regional economic communities, the SADC nations have the best access to ICT services, but these services are still expensive. Also, although SADC has basic mobile telephone roaming arrangements in place, other regional blocs such as ECOWAS have fewer restrictions. The telecommunications market in SADC has been open to foreign investors since the early 1990s, and today several large companies dominate the market. Part of that investment went toward constructing a submarine cable, which three countries have already accessed, and more will be connected through ongoing projects. Creating competition among landing stations is critical to providing affordable service. For remaining SADC countries to access the submarine cable, the region must complete the 5,100 missing kilometers of terrestrial fiber optic network. At the 2007 Lusaka Summit, regional leaders adopted the SADC Infrastructure Vision 2027 with the goal of establishing a strategic framework to guide the development of “seamless, cost-effective trans-boundary infrastructure.”209 Vision 2027 is anchored on six pillars that constitute the SADC Regional Infrastructure Development Program: (a) energy, (b) transport, (c) ICT, (d) meteorology, (e) transboundary water resources, and (f) tourism (transfrontier conservation areas). To implement Vision 2027, various action plans were developed. At the top is the SADC Regional Infrastructure Development Master Plan (RIDMP), which is the infrastructure development blueprint for the region. The RIDMP is an integral part of the Program for Infrastructure Development in Africa, as well as the COMESA-EAC-SADC Inter-Regional Infrastructure Master Plan, and lays a foundation for the development of the African Economic Community, as espoused by the Lagos Plan of Action and the AEC Treaty. Implementation of the RIDMP enables the consolidation of the SADC Free Trade Area and the COMESA-EAC-SADC Tripartite Free Trade Area. To implement RIDMP, a series of phased, short-term action plans were developed (STAPs). The first phase, or STAP 2017, consists of projects begun in 2013 that were set for completion in 2017. Some of these projects have committed financing, while others are in the priority pipeline for resource mobilization and allocation. STAP 2017 comprises projects from all six sectors. Some are hard infrastructure projects, and others are soft projects relating to policy and regulatory or institutional capacity building. The latter are geared 77

toward creating an enabling environment for the projects contained in the STAP. The total cost of the STAP is US$64.15 billion.210 Phase 1 focuses on harmonizing regulations, developing new institutions, implementing ready projects, and building capacity while preparing for Phase 2. Phase 2 (2018– 2022) and Phase 3 (2023–2027) will focus on implementing their respective projects and evaluating the outputs from each of the previous phases. Since its formation in 1992, SADC’s goal has been to further the socioeconomic cooperation, integration, and political and security cooperation among its 15 member countries. Infrastructure has been the bedrock of Africa’s regional integration and economic development. The role of infrastructure is critical not only in maintaining SADC countries’ current growth rate of 4–7% but also in harnessing regional integration and enabling Africa to increase its participation in the global economy. Supranational institution-building Efforts to revive the East African Community in 1999 and to strengthen it and put it on a fast-paced integration track were always nostalgic. The original EAC collapsed in 1977, and those who wished to revive it were colleagues who spent much of their lives together, from attending school to working in the EAC civil service. Meetings were essentially reunions of old friends.211 In this atmosphere, there was always a sense of urgency in restoring what had been lost. The old EAC had a monetary union with a single currency, a common civil service, a common education system, an airline, a bank, a parliament, and a court that heard appeals from national courts. They moved quickly in establishing a new EAC, which resuscitated legal instruments and institutions that underpinned the old one.212 Within a short period of ten years, the new EAC moved from establishment in 2000 to a functional customs union in 2005 and then to a full common market in 2010. There was also a regional parliament and court, long- and medium- term industrialization and development plans, and a mechanism for speaking with one voice in regional and international fora.213 Its attractiveness saw its membership increase from three (Kenya, Uganda, and Tanzania) to six when Burundi, Rwanda, and South Sudan joined the organization. The old East African Community collapsed in 1977 when relations irreversibly broke down between the presidents of the three countries, Idi Amin Dada of Uganda, Julius Nyerere of Tanzania, and Jomo Kenyatta of Kenya. Shortly thereafter, in 1978, anti-Amin forces based in Tanzania attacked Uganda and overthrew the dictator. Elections were organized in Uganda, and Milton Obote, whom Amin overthrew in 1971, won and became president. In 1986, Yoweri Museveni, one of the leaders of the invasion from Tanzania, became president of Uganda through a coup. With this, the presidents of the three countries were colleagues again. Nyerere was still president but would soon be 78

succeeded by personalities groomed in his party, the Chama Cha Mapinduzi. In Kenya as well, Jomo Kenyatta would be succeeded by his vice president Daniel Arap Moi and his former finance minister Mwai Kibaki and eventually by his son Uhuru Kenyatta. Strong institutions are required for managing complexity in regional integration and for covering the range of programs required for social economic transformation. Strong institutions must also take into account the range of multiple actors including governments, regional institutions, and various categories of users and beneficiaries of regional integration regimes on trade, movement of persons, and investment in industrialization and infrastructure.214 The EAC Treaty provides for such strong institutions, which have been established and are functional. The EAC has a parliament, a court, and sectoral organizations as well as professional associations such as the East African Law Association. The EAC also has the usual executive organs, i.e. the summits of the presidents, ministerial councils, technical committees, and the secretariat. In the case of the EAC, the presidents meet regularly and undertake tours of projects such as the ports and harbors. The presidential retreats are sometimes focused on dedicated matters, facilitated by experts from around the world. The ministerial council has sectoral ministerial committees according to the subject matter of the integration programs, and it utilizes instruments including a sector committee on budget and finance. The East African Legislative Assembly (EALA) is the regional parliament, made up of nine members who are elected by the national parliaments from each of the six countries.215 The national parliaments take the political parties into account in the elections. The members of parliament are paid monthly salaries in addition to allowances for attending the sittings. The East African parliament has a Speaker who has an office in the EAC headquarters and lives in Arusha, Tanzania. He receives a salary equal to that of the EAC Secretary General. The Speaker is elected by the EALA members and the post rotates every five years to allow each country a turn. It is also important to note that the sittings of EALA rotate from one country to another to allow visibility of the parliament and bring it closer to the people. The East African parliament considers and approves the annual budget of the EAC. The budget proposal is tabled by the chair of the Council of Ministers. This is another notable feature of the EAC. Unlike other RECs, the EAC has a Council of Ministers (appointed by heads of state) that is responsible for the community’s affairs. These ministers also present their ministry budgets in the National Assemblies during the annual budget sessions. Those budget estimates include country contributions to the EAC budget. The ministers also give intermittent reports on the status of the EAC integration and on financial audits. The EAC has a Court of Auditors comprised of partner states’ comptrollers and auditors-general in order to execute special or forensic audits where necessary. 79

The powers of the parliament to approve the budget are real, as it can reject an EAC proposal and require revisions. It can also direct that a special audit be done whenever it feels there is any financial malfeasance. In other RECs like SADC and COMESA, audit reports are considered by the ministers, who also approve the annual budgets and work programs. The East African parliament has powers to enact regional laws called acts, for instance the East African Customs Management Act, which sets out the basic common external commercial policy of the EAC, or the East African Trade Negotiations Act, which requires that the EAC must act as a bloc and speak with one voice in all regional and international forums. The acts are usually endorsed after extensive studies and consultations, which produce bills that are debated in the parliament. The acts can establish institutions. The bills for the acts can be introduced by the chair of the Council of Ministers or by the members of parliament. These laws take precedence over national laws or provisions and render inconsistent national laws null and void. The laws of the parliament are enforced by the national courts and the regional court. For all intents and purposes, the East African Legislative Assembly is a parliament. The East African Court of Justice (EACJ) has a full-time president, and the position rotates every five years.216 The president resides in Arusha and is paid a salary equal to that of the Secretary General. The EACJ is the busiest court of any African regional organization. By the end of 2016, the EACJ had reviewed 267 cases and decided on 233. The cases included references, claims, applications, and taxations. There were 42 appellate cases of which 33 had been decided. It has introduced reforms for its operations such as the digitization of filing and storage. Some national courts are trying to learn from this system. For instance, the Chief Justice of Kenya has had a study visit to the court. Like the COMESA Court, the EACJ has wide jurisdiction to hear all matters arising under the instruments of the organization. The governments of the countries, institutions of the organization, the Secretary General, and any company or individual resident in the region can bring a case in the court on matters arising from the legal instruments of the organization, if a claim can be made and substantiated that a government or institution has breached the instruments or that a right under those instruments has been breached causing damage. This wide right of audience before the court, including by ordinary people, is important as it allows the users of the regional regimes to own the organization and continuously improve it through bringing to the court matters that need rectification or better clarity. The judgments of the Court are binding on governments and institutions and are enforceable. The fact that governments have respected and complied with the judgments over the years has now confirmed the court as a credible institution and a linchpin of the East African legal and institutional system for regional integration. This also means that regional integration programs stand a good chance of being implemented by 80

the governments, since obligations and rights created are enforceable before a real court. The EAC Lake Victoria Basin Commission is responsible for coordinating the sustainable development of Lake Victoria and its environs. It is a unique regional arrangement with a Council of Ministers in charge of water and environment that meets to discuss the state of the lake and of its basin. Lake Victoria is the largest lake in Africa in terms of surface area and is the source of the river Nile, which flows all the way through Sudan and Egypt into the Mediterranean Sea. Its ecological importance cannot be overemphasized. The Lake Victoria Basin Commission therefore performs critical environmental functions in ensuring the integrity of this water body for the region and ultimately the world. The EAC also has the Inter-University Council of East Africa (IUCEA). In 2009, the East African Legislative Assembly endorsed the IUCEA Act 2009, thus effectively integrating IUCEA into the EAC operational framework. The act spells out the objectives, functions, institutional set up, and systems of governance and management of IUCEA. According to the act, any university, college, or degree-awarding institution may apply for and get admitted to the IUCEA membership as long as it is properly incorporated in an EAC partner state and is pursuing objectives that are consistent with the functions of IUCEA as delineated in the act. The act also spells out the following main objectives: facilitate networking among universities; provide a forum for discussion on a wide range of academic matters in East Africa; and facilitate maintenance of internationally comparable education standards in East Africa so as to promote the region’s competitiveness in higher education. The EAC has a collegial summit of Heads of State, which meets twice a year in ordinary sessions, in addition to possible extraordinary sessions and informal retreats. The summit has succeeded in undertaking many of its tasks because of the cultural homogeneity of the people and the political leaders of EAC partner states. Kiswahili is the lingua franca in the EAC region. South Sudan, the sixth member admitted in 2016, has now introduced Kiswahili as a national language. The other countries already have Kiswahili in their curriculum. Beyond strong institutions, the EAC has been able to promote intra-regional trade. Its ambitious decision to embrace a customs union in January 2005 as the first stage of integration (contrary to what other RECs have done) has been the strategic driver of the EAC’s early integration success. The EAC decided that a free trade area was not a prerequisite for a customs union.217 The main reason for this was that the three countries—Kenya, Uganda and Tanzania—had already reduced their customs duties to trade among themselves as members of COMESA. Tanzania surprisingly later withdrew from COMESA in 2000 because a senior member of government had an industry 81

that he argued would be destroyed by the COMESA free trade area. Kenya has already reduced its customs duties to 0% on imports originating from the other countries, and Uganda and Tanzania have achieved reductions of 80% on most favored nation duties. This facilitated the possibility of jumping the free trade area. When the East African Customs Union was established in 2005, it was agreed that imports from Kenya into Tanzania and Uganda would continue to attract customs duties for a period of five years, during which there would be equal 20% reductions. By the year 2010, the phase out of the duties had been completed on schedule.218 The EAC then proceeded to establish its common market in July 2010 under a protocol that provided for free movement of goods, services, labor, and capital, as well as the right of establishment and residence. As would be expected with such a deep level of integration, the negotiations for the common market were tough, as Tanzania was reluctant on some issues (free movement of labor and services as well as the right of establishment) and was wary of competition from Kenya. The principle of variable geometry came in handy, in that all the partner states agreed on the protocol but with the possibility of staggering the transition periods. For example, on free movement of services, a column was introduced to the schedule of commitments that indicates when the obligation would kick in. This was an innovation over the approach under the General Agreement on Trade in Services to scheduling commitments, which simply indicates sectors that have been opened up and lists the attached conditions or limitations. It was also an improvement over the common market or rights-based approach, which simply provides for the right of free movement or prohibits any restrictions on such movement. To encourage the other three countries, Kenya and Rwanda had in the course of the negotiations agreed on a bilateral basis to remove visa requirements and work permits for professionals seeking employment in their countries. This initiative was designed to inject momentum in the negotiations and send the clear message that these countries were determined to implement the common market freedoms. With that move, the idea of the “coalition of the willing� was born in the EAC, and it has been invoked to break a number of stalemates. For instance, to deepen the customs union and move closer toward free circulation of goods and to facilitate trade, a program to establish a single customs territory was agreed on a pilot basis along the northern corridor. The corridor was the road from Mombasa port in Kenya entering Uganda through Busia or Malaba and going on through Kampala to Kigali in Rwanda. This program, therefore, initially covered Kenya, Rwanda, and Uganda. Apart from the legal instrument for the program, administrative arrangements were put in place under which the customs authorities of Uganda and Rwanda were placed in Mombasa port to facilitate single clearance of imports into Rwanda and Uganda. 82

The presidents took it upon themselves to issue a decision requiring removal within a week of nontariff barriers along the corridor, such as roadblocks and multiple weigh bridges. It is interesting that President Kagame had done his own research on obstacles along the corridor. He had dispatched a truck to travel the corridor, collecting information and data on all sorts of trade and transport barriers such corruption, currency exchange rates and losses, requirements by border agencies, and internal roadblocks and checks. Armed with this information (which was presented to the other presidents) and a working paper from the secretariat, decisions on this quite technical matter were made by the presidents and speedily implemented. The EAC has also distinguished itself in promoting regional infrastructure projects as a way to boost intra-regional trade. One of the flagship infrastructure projects is the Northern Corridor Integration Projects (NCIP) initiative comprising Rwanda, Uganda, Kenya, and South Sudan. An institution has been established to administer this initiative. Tanzania is implementing its own Central Railway Project, which also provides a link to Rwanda and Burundi from Dar es Salaam. The infrastructure initiative now extends to power generation, transmission, and interconnectivity and also incorporates Ethiopia. For example, the Eastern Africa Power Pool, based in Ethiopia, has been connected to the Southern Africa Power Pool through the Zambia-TanzaniaKenya (ZTK) Interconnector Programme. The EAC emerged from the ashes of the failure of the first post-independence integration efforts. This failure yielded key lessons on the importance of strong regional institutions as core foundations of regional integration. The implementation of the various protocols adopted by the EAC provides more specific areas of experimentation. The lessons learned from the process will continue to guide future integration efforts. The road to political integration will slow and will depend largely on the level of confidence among the population on the benefits of the measures pursued through the protocols and the various organs of the EAC. A large part of the challenge remains in addressing the perceptions of inequity among the member states and the concern over dominance. In this regard, the EAC serves as a test bed for the realization of the large goals of economic inclusion that are at the heart of Africa’s regional integration efforts. In the meantime, the EAC continues to pursue integration objectives such as infrastructure development and industrialization that are similar to those pursued by other RECs. This reinforces the view that strategic entry points are substitutes for broader integration objectives. 3.4 Functional convergence The identification of priorities and strategic interventions by the RECs reflects the movement from chaos to order and complexity, demonstrates a proactive rejection of the status quo, and shows how the space for political, 83

institutional, economic, and legal experimentation enabled the RECs to make concrete steps forward. Beginning with this initial prioritization, the regional economic communities took on additional areas for intervention in line with the complex and multidisciplinary nature of socioeconomic development and transformation. Just as the insights on dissipative states and bifurcation indicate, leaders quickly realized that the development effort required not only infrastructure, or industrialization, or markets, or free movement of people and goods but all of these simultaneously along with an entire gamut of complementary and mutually reinforcing programs and interventions. This led to efforts at the continental level, guided by the sectoral cooperation areas set out in the Lagos Plan of Action and the AEC Treaty, to coordinate and set common programs to be pursued by all the RECs. These continental-level efforts amounted to a codification of lessons and experiences and provided a continental template that informed integration visions, objectives, and programs at the regional level. In this way, the RECs’ constitutive instruments and regional programs broadly reflect the sectoral areas for cooperation and economic development agreed to in the AEC Treaty.219 At the 33rd ordinary session of the OAU Assembly in 1997, the assembly adopted the “Protocol on the Relations between the AEC and the RECs for the Implementation of the Treaty Establishing the AEC.” This protocol was later revised to establish a coordination mechanism between the RECs and the African Union Commission. The new protocol set up institutions such as committees of officials and chief executive officers, provided for regular meetings to consult on programs, and called for REC officials to participate in AU meetings and vice versa. The ambitious African Union Minimum Integration Program of 2009 to 2012 set out 12 priority sectors for continental integration: trade, free movement, infrastructure, energy, agriculture, industry, investment, science and technology, social affairs, political affairs, statistics, and capacity building. The purpose of the minimum integration program was to provide a mechanism for convergence among the RECs by setting out areas for harmonized integration while recognizing the RECs’ various priorities. The African Union continued to improve on these priorities, and by 2013, it adopted a new 50-year vision and plan called Agenda 2063, subtitled “The Africa We Want.” This progress over the years shows the evolution from simple to more complex systems to match and address the complex and multidisciplinary nature of developmental challenges confronting the regional economic communities and Africa at large. It shows the fruition of a process of experimentation and learning.


3.5 Conclusion Africa’s regional economic integration efforts have emerged as the foundations for the social and economic transformation of the continent. IntraAfrican trade is serving as the currency for regional integration. This involves facilitating freer movement of products, assets, and people as part of larger markets that support critical investment, industrialization, and infrastructure development. Africa has approached trade as a vehicle for overall economic transformation and not just the free movement of goods and services. What is notable, however, is that the focus on trade emerged as a result of subregional experiments which then provided a basis for wider integration. In some regions, peace and security became the first entry point for regional efforts. This was because, without peace and security, it was not possible for the countries to pursue their trade objectives. It can be argued that promoting peace and security is seen as a pre-requisite for trade integration. The entry points varied based on immediate regional priorities. The overall goal, however, remained longterm economic transformation involving trade, infrastructure development, and industrialization, among others. The RECs are gradually emerging as Africa’s units of economic analysis. They play a critical role in providing the basis through which nation-states are articulating their sovereignty. But even more importantly, they are serving as platforms for experimentation and learning on a wide range of regional integration issues. The initial entry points are not the only programs that the regional bodies have pursued over the years. Progress was made on other integration programs once the initial entry points had been made. With time, the coverage of the programs or the areas of economic integration in the regional bodies was fairly standardized, from the experience-sharing under the Organisation of African Unity continental framework before 2000 to the subsequent structure of the African Union. These standards covered market integration, industrialization, infrastructure, movement of people, peace and security, and financial integration. However, the regional bodies did not find this comprehensive and continued to implement additional integration programs. For instance, the EAC pursues a program for forming a political federation, and COMESA has scaled up its digitization programs in an effort to keep moving forward. The incremental nature of regional integration has proven pragmatic and realistic. The main lesson was that seemingly formidable challenges could be addressed at the regional level through a process of identification and institutional engineering and innovation. Regional economic integration gained traction by addressing practical immediate challenges on the ground and operating within the overall long-term continental vision. Political leadership was instrumental in ECOWAS and SADC, but disagreements could be fatal as witnessed in the old EAC. Personal familiarity and trust among the remnants or beneficiaries of a functional economic integration system, through common services and 85

student exchange programs, greatly assisted quick progress on the integration programs. This means that quick wins and evidence of the benefits of regional economic integration can spur further progress. Without a strong and effective overarching continental framework, these early days were characterized as well by a chaotic establishment of many regional bodies. This metamorphosed into a complex web of interlocking organizations, showing the importance of convergence to minimize the differences in programs pursued under the various organizations to which the same countries belonged. The positive side is that this space and freedom allowed experimentation, learning, and an earnest movement towards economic integration efforts, which provided concrete evidence later required for consolidation at the continental level. The lessons included the need to strengthen and streamline the overarching continental institutional framework while accommodating space and freedom at the regional level through the principles of variable geometry and subsidiarity, which allowed those that could move faster to do so. This prudent flexibility garnered respect for the important role that regional bodies can play.


4. Building a regional trade regime 4.1 A regional inspirational model 4.2 COMESA and the Economic Integration Development Strategy 4.3 Concerns about the COMESA customs union 4.4 Challenges and convergence 4.5 Conclusion This book started with a theoretical exposition of movement from chaos to order, the arrow of time, and irreversibility. Next, it analyzed how regional economic communities used their immediate developmental challenges as entry points and priorities for their programs. A higher degree of complexity in terms of the variety of programs was progressively achieved at the regional level. Convergence in programs was sought at the regional and continental levels under the overarching framework of gradually establishing the African Economic Community, with regional economic communities as building blocs, through the experimental, gradual, continuous deepening and widening of integration first in the RECs and then at the continental level. This chapter examines the origins of the Common Market for Eastern and Southern Africa (COMESA) as an in-depth case study with a focus on market integration. Other regional bodies also established their free trade agreements or had programs for liberalization of intra-regional trade. Following the conclusion of a trade protocol in 1996, SADC eventually established its FTA in 2008. However, the tariff liberalization remained progressive, with some sensitive and excluded products, but by 2017, this group of products had been reduced to less than 3%. SADC faced challenges with establishing its customs union and decided to shelve the program. The EAC’s customs union retained some internal duties on imports into Uganda and Tanzania from Kenya, but these were phased out over a five-year period from 2005 to 2010 when the full customs union was achieved. However, the EAC Customs Management Act allows the partner states to seek exemptions and depart from the community regimes. This is usually done during the annual pre-budget consultations. ECOWAS adopted a trade liberalization scheme, which in 1979 covered agricultural, artisanal 87

handicraft, and unprocessed products and, in 1990, was extended to include industrial products. ECOWAS launched its customs union on January 1, 2015, with a common external tariff that covered 70% of the traded products, or the Tariff Book. The COMESA FTA, on the other hand, was established in 2000 as a duty-free, quota-free, exemption-free regime on the basis of variable geometry. Only 9 member states out of 22 at the time joined the FTA; this number has since increased to 16 (out of the current 19). Given extensive challenges, COMESA in effect transformed its customs union program into a trade facilitation and industrial policy program with a strong capacity building component and a reporting requirement. 4.1 A regional inspirational model The example of COMESA reveals the challenges and opportunities of economic integration in Africa, and for this reason, it is used as a case study. As the largest regional economic community, it spans the North, Central, East, and South of Africa and includes Indian Ocean island states. 220 Its member states work in English, French, and Arabic. Its approach to regional integration has been unique in its emphasis on trade and investment and in its establishment of a raft of supportive specialized institutions including a development bank, an insurance agency and reinsurance company, a payment system, a women entrepreneurs’ federation, an alliance for small-scale commodity traders, a business council, and a court of justice, among others. The case of COMESA highlights the challenges to be addressed in forming the Continental Customs Union and signals a policy direction for other integration initiatives. After introducing COMESA as a regional body, indicating the commitments of the member states, and examining its performance and challenges, this chapter then sets out a program for going forward, drawing on the actual priorities of the regional economic community. This lays the groundwork for examining lessons learned at the critical stage of implementation. In moving towards the common market, the FTA and the customs union provide the backbone. Implementing the common market is much harder than implementing either the FTA or the customs union because of the penetrating nature of large-scale integration. There are also greater policy and political implications for the powers of governments in jointly implementing rules on free movement of services, persons, labor, capital, and enterprises. It is therefore important in the long trajectory of African economic integration to think clearly and design a way forward in terms of relaunching the integration programs or modifying them in ways that achieve results. The state of regional integration in COMESA can hold out many best practices for the entire continent, but it can also raise some issues that need urgent attention. Addressing these issues can ultimately shape the entire continental integration process.


The Common Market for Eastern and Southern Africa is a regional economic community of 19 member states with booming regional trade, a population of 532 million, a combined GDP of US$718 billion (2017), and a land mass of about 11.6 million square kilometers, constituting about a third of Africa in demographic, economic, and geographical terms.221 Tunisia and Somalia joined the organization in 2018 to bring the total number of member states to 21. These figures mean that COMESA is a credible force in regional, continental, and international relations. It is also a potential force for good, according to Article 3 of the treaty, which states that COMESA exists to improve the living standards of the people in the region, and its various poverty-alleviating programs attest to that desire. COMESA was established in December 1994 as a successor to the Preferential Trade Area (PTA), which had existed since 1982. The origins of the PTA and COMESA can be traced to the impetus for regional integration in Africa in the 1960s and 1970s. Through its pioneering programs and institutions, COMESA has made an indelible imprint on the continental integration process. The most successful COMESA institutions include the Clearing House, which has now established an international payment system called the Regional Payment and Settlement System; the African Leather Products Institute; the Alliance for Commodity Trade in Eastern and Southern Africa; the COMESA Business Council; the COMESA Regional Investment Agency; and the COMESA Monetary Institute. The financial institutions of COMESA (the PTA Bank, the Re-insurance Agency, and the African Trade Insurance Agency) have spread throughout the continent and enjoy excellent global rankings. The COMESA Court of Justice is notable for its wide jurisdiction and the access it provides to individuals and companies, the Secretary General, COMESA institutions, and the governments of member states. The integration programs of COMESA include the FTA, investment, health and technical standards, customs, services liberalization, visa relaxation, infrastructure (transport, energy, ICT), agriculture, industry and SMEs, gender, peace and security, intellectual property, capacity building, peace and security, international negotiations, and science, technology, and innovation. All of these programs are embedded in the COMESA Treaty. Each year, the summit of presidents and the council of ministers issue decisions and regulations to advance these programs. These become binding once published. Ensuring the implementation of the programs is the foremost priority, and therefore, every year as a standing agenda item, member states report on how they are executing the programs.222 The reports have been made more structured than in the past to encourage comprehensive reporting and to allow ranking or assessment of performance and peer comparison. This mechanism provides invaluable information for Afro-pessimists and integrationists alike to debate whether the glass is half empty or half full. 89

In addition, the secretariat undertakes a comprehensive assessment of the laws, policies, and other relevant national instruments that are supposed to facilitate implementation of COMESA obligations. A general assessment has been that on average 60-70% of COMESA programs are being implemented by the best performing member states. A number of programs have been fully implemented by all member states, but at the same time, some member states have hardly succeeded beyond the minimum. This provides both room for improvement and reason for positive reflection on the work thus far.223 The vision of COMESA is to become a fully integrated, internationally competitive, prosperous, and peaceful regional economic community with high living standards. It is intended to fully support the continental integration process. COMESA’s objectives are “to attain sustainable growth and development of the member states by promoting a more balanced and harmonious development of its production and marketing structures; to promote joint development in all fields of economic activity and the joint adoption of macroeconomic policies and programs to raise the standard of living of its peoples and to foster closer relations among its member states; to cooperate in the creation of an enabling environment for foreign, cross-border, and domestic investment; to cooperate in the promotion of peace, security, and stability among the member states in order to enhance economic development in the region; to cooperate in strengthening relations between the Common Market and the rest of the world, and the adoption of common positions in international fora; and to contribute towards the establishment, progress, and the realization of the African Economic Community.”224 To achieve these objectives, the member states must tackle various areas.225 For instance, member states “shall, in the field of trade liberalization and customs cooperation, establish a customs union, abolish all non-tariff barriers to trade among themselves; establish a common external tariff; and cooperate in customs procedures and activities.”226 This undertaking is the subject of a specific provision in Article 45 that calls for the progressive establishment of a customs union within a period of ten years (meaning by 2004, since the COMESA Treaty entered into force in 1994). Article 46 specifically provides for the establishment of a free trade area by the year 2000. While the FTA was established on schedule in October 2000, the customs union was not. Under the principle of variable geometry, the customs union will be implemented through member state progress on specific aspects such as the customs law, commodity description, and common external tariff. But the FTA—by eliminating duties, non-tariff barriers (NTBs), and other restrictive regulations of commerce—is by definition part of a customs union. There are also initiatives in the fields of transport and communications, industry and energy, monetary affairs and finance, agriculture, and economic and social development—all of which are the subjects of detailed specific 90

provisions. Furthermore, “Member States agree to adopt, individually, at bilateral or regional levels the necessary measures in order to achieve progressively the free movement of persons, labor, and services and to ensure the enjoyment of the right of establishment and residence by their citizens within the Common Market.”227 COMESA concluded a protocol in 2001 on the free movement of persons, labor, services, and the right of establishment and residence that has not yet entered into force. The protocol on visa relations, however, is enforced and is the basis for dedicated COMESA desks that have been established and visibly marked at airport arrivals queues in the member states. COMESA aims for deeper market integration covering the establishment and operation of a free trade area, a customs union, and a common market, as well as an economic union involving integration through harmonization and coordination of policies in the various sectoral areas, which will progressively lead to “a payments union as a basis for the eventual establishment of a monetary union.”228 This scope of integration is not unique to COMESA; other regional bodies have comparable provisions and programs in line with the template for continental integration provided by the AEC Treaty. And it is worth recalling that Article 1 of the treaty inherently instituted the common market by providing that “the High Contracting Parties hereby establish among themselves a Common Market for Eastern and Southern Africa.” The task at hand is merely operational. Following the FTA’s establishment in 2000, 15 member states implemented national programs for tariff elimination as required by the COMESA Treaty: Burundi, Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia, and Zimbabwe. The FTA regime is binding and enforceable. Attempted breaches have been speedily addressed through interventions by the secretariat in conjunction with the member states concerned. One such case was referred to the COMESA Court of Justice. The judgment Polytol v Mauritius is explained later in this chapter. Eritrea reduced its customs duties by 80%. This means that imports into Eritrea from other COMESA member states attract a customs duty of 20% of the Most-Favored-Nation (MFN) rate. Ethiopia reduced its customs duties by only 10%, meaning that imports from other COMESA countries attract a customs duty of 90% of the MFN rate. Under the principle of reciprocity, imports from Eritrea and Ethiopia into the other COMESA member states equally attract duties of 20% and 90% of the MFN rates, respectively. Swaziland obtained a derogation from implementing the COMESA FTA because it was required to maintain the common external tariff of the Southern African Customs Union (SACU) to which it belongs, against the rest of the world including COMESA member states. Swaziland will remove duties on imports from other COMESA countries in accordance with the tariff liberalization under the COMESA-EAC-SADC Tripartite FTA, which covers all the 27 countries of COMESA, EAC, and SADC and includes the SACU. 91

The Democratic Republic of the Congo has enacted a law, which is in force, under which the country will eliminate customs duties on imports from COMESA member states in three phases, beginning with a reduction on MFN duties of 40%, then 30%, and finally 20%. The three phases were to achieve a 0% duty on imports from other COMESA member states in 2018. However, on the ground, customs authorities had not implemented the reductions, in contravention of the national law, by 2018. Capacity-building programs have been provided by the secretariat to customs and regulatory authorities, stakeholders who have a vested interest in the implementation of the FTA regime (such as importers and consumers), and users of inputs. The FTA regime is underpinned by a system for addressing NTBs. Between 2008 and 2018, 204 NTBs were reported in COMESA, and 199 were successfully addressed and eliminated.229 This process offers a counter argument to critics who have suggested that there is no rule of law in COMESA, citing that the court is inactive and has been reduced to an employment tribunal adjudicating cases by dismissed staff against the secretariat.230 The NTB system addresses most of the trade disputes using the online system,231 bilateral consultations, annual reports for consideration by technical and high-level committees, and facilitation by the secretariat through technical advisory opinions and ad hoc inspections. Testimony from the business community (annual declarations of the COMESA Business Council) indicates that they utilize market opportunities within the regime. COMESA is a leading export destination for a number of member states including Kenya, Rwanda, and Uganda and is at least comparable to traditional developed-country markets such as the EU.232 For small to medium enterprises and small-scale traders using the simplified trade regime, the trade liberalization programs of COMESA have facilitated and increased their trade in the region.233 Member states have been implementing the COMESA trade facilitation instruments, but there is still room for improvement. A time release study conducted at 33 border posts in 10 member states found that, on average, it takes 5 days, 1 hour, and 14 minutes to clear imports. Kenya has the shortest time of 4 hours and 29 minutes and Eritrea the longest time of 16 days, 6 hours, and 10 minutes. Exports, on the other hand, take 2 days and 6 hours to clear, with Kenya having the shortest time of 39 minutes and Democratic Republic of the Congo (DRC) the longest time of 7 days and 3 minutes.234 All COMESA member states have automated systems for customs clearance. All have websites for customs related information, except DRC and Eritrea. The following 10 member states have established national single windows: Burundi, Egypt, Kenya, Madagascar, Mauritius, Rwanda, Sudan, Uganda, Zambia, and Zimbabwe. The following 10 member states have schemes for approved economic operators: Burundi, Egypt, Ethiopia, Kenya, Mauritius, Rwanda, Sudan, Uganda, Zambia, and Zimbabwe. 92

The following 8 member states have established trade portals: Burundi, DRC, Kenya, Malawi, Mauritius, Seychelles, Zambia, and Zimbabwe.235 The following 12 member states use the COMESA yellow card scheme (a regional third party motor insurance): Burundi, DRC, Djibouti, Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia, and Zimbabwe. Tanzania withdrew in 2000 but has continued to implement a number of COMESA programs and to utilize COMESA institutions such as the Trade and Development Bank, where it is one of the most active beneficiaries.236 Nine central banks use the COMESA regional payment and settlement system, which is a new regional international payment scheme with initial volumes of transactions estimated at US$20 million and €1 million for 2017.237 These COMESA trade facilitation programs started well before the World Trade Organization’s Bali Trade Facilitation Agreement of 2013. COMESA has established a regional Trade and Trade Facilitation Sub-committee,238 which reports to the Trade and Customs Committee and meets at the director level. The committee in turn reports to senior officials at the level of permanent secretaries, who report to the council of ministers.239 This agreement entered force on February 22, 2017, and the following seven WTO members had ratified it by December 2017: Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Swaziland, and Zambia. All the COMESA WTO members had notified their category A obligations except Djibouti and Swaziland, but only Malawi, Mauritius, and Zambia had notified their category B and C obligations.240 Regarding the customs union, which will be discussed in more detail later in this chapter, the following member states have fully implemented the customs union law registering a score of 100%: Burundi, Comoros, Ethiopia, Kenya, Malawi, Rwanda, Seychelles, Uganda, and Zambia. The Common Tariff Nomenclature has also been implemented but to varying degrees, with Comoros achieving the lowest score of 52.5%, Djibouti the highest at 95.2%, and Burundi, Kenya, Rwanda and Uganda at 74%, with a regional average of 69.1%. The common external tariff has achieved the lowest regional average, at 34.1%, with the lowest score being Zimbabwe’s 7.1% and the highest score at 74% by Burundi, Kenya, Rwanda, and Uganda. Because the customs union is the worst performing trade liberalization program, this chapter will go into some detail in examining the challenges and solutions. COMESA established a regional agency called the Regional Association of Energy Regulators for Eastern and Southern Africa and designed a model energy policy framework that was later adopted. The following 13 member states have developed national energy policies that are based on and consistent with the COMESA regional model: Burundi, DRC, Egypt, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Uganda, Zambia, and Zimbabwe; this constitutes an implementation score of 63%. Other energy programs include the connection of the Eastern Africa Power Pool and the Southern Africa Power Pool through the Zambia-Tanzania-Kenya interconnector program. 93

In terms of agriculture, COMESA adopted the Comprehensive Africa Agriculture Development Program (CAADP) in 2001 under the auspices of the African Union to expedite agricultural modernization and achieve higher productivity, incomes, and food security. The following 15 member states have concluded the national compacts implementing CAADP: Burundi, Djibouti, DRC, Ethiopia, Kenya, Madagascar, Malawi, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. The CAADP, together with the Yamoussoukro Decision to establish a single air transport market over Africa, offers examples of frameworks that were adopted at the continental level and then pioneered at the regional level or implemented in collaboration with the regional bodies. COMESA adopted a legal instrument for granting the fifth freedom in air transport and for implementing the Yamoussoukro Decision in 1999. The African Union eventually established the Single African Air Transport Market (covering 70% of air travel in Africa) on January 28, 2018. The next chapter will deal with trade facilitation and transport programs. These examples of implementation of COMESA programs demonstrate that an overly pessimistic view of regional economic integration in Africa might be exaggerated. After all, economic development and transformation is a painfully slow process. Notwithstanding these regional integration programs, intra-COMESA trade has remained low. In 2016, it represented as little as 7% of total trade while intra-regional trade at the continental level was estimated at 11.3%.241 These are the lowest levels of intra-regional trade in the world. Most COMESA member states trade more with the EU, China, and the Gulf countries. While production has continued to increase in absolute terms in COMESA member states, much of the trade is with third-party countries. In stark contrast, intra-EU exports increased from EUR 732 billion in 1994 to EUR 2,978 billion in 2016, while extra-EU exports increased from EUR 517 billion in 1994 to EUR 1,685 billion in 2016.242 The explanation for low intra-Africa trade has been the lack of industrialization and regional interconnectivity of economic infrastructure, market intelligence, and information, as well as underestimating science, technology, and innovation to generate new products and industries. This also explains the prioritization of developmental integration, as discussed in Chapter 3. Secretariat surveys have examined the constraints to intra-COMESA trade. They include lack of market information and inter-connecting infrastructure. Using 2014 figures, the survey established that the potential for intra-COMESA trade in goods is high, estimated at US$82.3 billion.243


4.2 COMESA and the Economic Integration Development Strategy Following the adoption of the Lagos Plan of Action in 1980, successive instruments establishing regional economic communities in Africa have provided for economic integration as an overarching development strategy to be pursued by the member states. The strategy typically envisages deepening integration beyond FTAs into customs unions, common markets, economic unions, and monetary unions together with cooperation in key sectors such as infrastructure, industry, and agriculture. This template has been the consensus in Africa for decades, and COMESA is no exception. A number of studies have assessed the impact of economic integration in Africa.244 All of these studies have generally recommended that deeper economic integration will be beneficial.245 Before the conclusion of the 1991 treaty establishing the African Economic Community, studies by the World Bank, the U.N. Economic Commission for Africa, and the African Development Bank ascertained that deeper economic integration in Africa was the way forward and would be the appropriate economic development strategy. These studies continue today–e.g., the “Assessing Regional Integration in Africa� series.246 These flagship publications have consistently argued in favor of deeper integration.247 Since 2010, the above publications inspired the program now adopted by the AU heads of state and government for building a continental free trade area and a continental customs union. These programs rest on a number of pillars: market integration, industrial development, infrastructure development, and trade facilitation. Other notable institutions that have produced well researched and informative studies, which also recommend deeper integration on the basis of significant welfare gains, are the United Nations Conference on Trade and Development and the United Nations Development Programme. The analytical work is unanimous that the elimination of customs duties on trade among the member states is not enough to achieve all the welfare benefits available. By implication, this means that FTAs alone are not enough to achieve the developmental objectives of the member states. The work further demonstrates that market integration should be coupled with industrial and infrastructure development, trade facilitation, and policy coordination to address policy and regulatory constraints and to achieve more robust welfare gains of economic integration.248 A 2013 study, for instance, estimates that a Tripartite FTA involving the elimination of duties and nontariff barriers as well as trade facilitation will generate additional new trade worth US$7.7 billion and net benefits worth US$3.3 billion annually, constituting an increase of about 20% over the 2014 baseline; mere elimination of duties would generate just US$250 million annually. The analysis has shown further that every member state has industries that will benefit from the Tripartite FTA, where incomes will grow and jobs will 95

be generated.249 Indeed, evidence from meta-analyses are showing increases in the economic benefits of regional integration.250 The importance of not limiting integration programs to trade liberalization alone, or to free trade areas as such, is now accepted. COMESA, for instance, has always pursued various integration programs simultaneously rather than following the linear approach to economic integration of first completing the FTA and then the customs union before moving on to the common market and other stages of integration. Rather than water-tight or compartmentalized stages of regional integration, COMESA implements all necessary programs that support the achievement of its developmental objectives. Some of these key programs include services liberalization for essential welfare-generating activities; infrastructure covering surface and air transport, energy, and ICT; and industrial and agricultural development to improve the productive capacity of member states. Several other disciplines are covered as well, such as science, technology, and innovation; visa relaxation and the freer movement of people; macroeconomic and fiscal convergence; and peace and security for political stability and human safety. Using the linear model of regional integration, these other programs are supposed to be initiated and implemented during later stages under the common market or the economic union. This pragmatic approach that seeks to tackle the existing challenges in order to achieve the common developmental objectives is the template for continental integration, and it is embedded in the constitutive instruments of the RECs, including in the COMESA Treaty. COMESA launched its customs union in 2009. Progress on this regional integration program has been slow. Due to entrenched national trade or economic policies that are diametrically inconsistent with customs unions, such as the common external tariff, some member states, notably Egypt, Mauritius, Seychelles, and Zimbabwe, have been reluctant to implement the COMESA customs union. If forming the customs union is considered problematic, going any deeper into the common market or economic union or monetary union must be even more difficult, raising far more serious policy questions. Therefore, the real question is whether the road to regional and continental integration in Africa should come to an end. As indicated, the literature strongly demonstrates that deeper integration must continue. The case of the EAC shows such integration is feasible and can deliver practical benefits, as discussed earlier in Chapter 3, which also surveyed the entry points and achievements of other regional bodies in addressing some existential challenges at the time. 4.3 Concerns about the COMESA customs union The main problem confronting the COMESA customs union and eventually the continental customs union is that the national policies of some member states are unsupportive or even diametrically inconsistent. Such member 96

states fight those regional integration programs that they fear would unravel their national policies. This paradox is striking. One would expect collectively adopted regional integration programs to reflect consensus. Also, one would expect the regional integration programs, as a matter of course, to reflect the best practices at the national level and thus enjoy utmost ownership and support. But in reality, some member states have disowned regional integration programs on the basis of their national policies. What complicates matters is when those member states do not take the obvious step of seeking derogation or accommodation but instead set out to delay or block the program.251 Member states that aim to become duty free zones would find a customs union’s common external tariff (CET) with positive duties to constitute policy reversal. For Mauritius and Seychelles, about 85% of their tariff lines were already at a 0% MFN customs duty rate, and about 50% of their national tariff lines had rates that were different from the CET rates. Egypt and Zimbabwe had a large number of tariff lines with a 5% customs duty rate, which would need to be adjusted to the CET’s 0%, 10%, and 25% duty rates on raw materials and capital goods, intermediate products, and final products respectively. These two countries argued that raising the duties from 5% to 10% or 25% would reduce the competitiveness of their products (higher cost of inputs) and would reduce the welfare of the people because of higher consumer prices especially for essential products such as foods. On the other hand, reducing the 5% duty rate to 0% would cause revenue losses for the governments. Sudan and Zimbabwe pointed to the prevailing bad economic situation from 2012 to 2017 (when the customs union was supposed to be implemented) as an impediment to realizing this goal. Sudan indicated that it lost key oil assets to South Sudan, which was created as an independent country following decades of internal war, and Zimbabwe referred to the decimation of its economy under the prevailing international economic sanctions, which weakened the domestic industry and caused a shortage of government revenue. Some member states, especially Malawi and Zambia, initially implemented key customs union instruments, but after changes in government, new policy directions slowed down implementation. Zambia for instance reviewed its trade agreements as a new government policy, which included the customs union. Egypt and Mauritius were fearful of renegotiating their tariff schedules at the WTO, arguing that the CET would result in raising their tariffs beyond the bound rates at the WTO. In fact, the overall level of tariffs under the CET was lower than the overall level of national tariffs and therefore adoption of the CET would not require renegotiation. These were the arguments advanced to block progress on implementation of the COMESA customs union, and they are likely to be the arguments against any customs unions involving these countries, especially those with CETs with positive rates and rates that are different from those under the national tariffs of the member states. 97

A key issue is whether the short-term revenue losses from elimination or reduction of customs duties on certain tariff lines can be addressed. Analytical assessments clearly demonstrate that these revenue losses can usually be recouped from slight increases (e.g., 0.1%) on the rates of trade taxes such as value-added or excise.252 Even without a slight increase, the recent experience of the EAC demonstrates that an increase in trade resulting from the formation of the FTA or the customs union or an improvement in the overall economic performance will more than offset the temporary revenue losses from reductions in customs duty rates, through increased tax revenue from VAT. It is noteworthy that the more stable and deeper sources of government revenue tend to be domestic taxes on transactions, such as VAT, rather than customs duties. For instance, the EAC partner states experienced a rise in tax collection from increased trade resulting from the formation of the customs union in 2005.253 Furthermore, the COMESA Adjustment Facility has already been used by a number of member states to address their temporary revenue shortfalls resulting from entering the COMESA FTA or the EAC customs union. In the first round, Burundi and Rwanda got disbursements from the fund, and in the second round, all 14 eligible COMESA member states got disbursements for adjustments due to implementing COMESA obligations. By 2017, there had been a total of seven rounds of disbursements. The issue of loss of sovereignty is a critical concern to the governments of the member states, left over from a legacy of decolonization. This was addressed, however, by the principle of uti possidetis. Beyond that, members clearly saw the limitations they faced as individual states in light of grave political and developmental challenges. On this basis, they agreed to joint efforts under the OAU, which necessarily entailed a degree of limitation of sovereignty through joint decision-making. The African Union reinvigorated the economic integration programs by reorganizing the commission, setting clearer integration priorities (e.g., under the Minimum Integration Program and other convergence programs), strengthening relations with the RECs, launching initiatives for the Continental FTA and the Continental Customs Union, and adopting Agenda 2063. All these initiatives, by definition, entail some agreement to joint action in a manner that limits unilateral action. The promise is, of course, that member states are stronger together and can jointly address cross-border challenges whether they are political, social, or economic. Integration in Africa, both at the regional and continental levels, has remained an intergovernmental process driven and owned by the member states and has not entailed giving up policymaking to secretariats. In terms of challenges to sovereignty, neither economic integration, nor the FTA, nor the customs union will undermine the sovereignty of member states.


As has always been the case, weakened populations and governments resulting from underdevelopment and disunity will undermine sovereignty. Peace and prosperity resulting from regional integration are perhaps the most sustainable ways of ensuring the sovereignty of each member state in international relations, because they will be politically and economically stronger and richer as a group. 4.4 Challenges and convergence The 0%-10%-25% CET structure reflects the industrial policy that the COMESA region adopted. The 0% duty rate promotes the importation and use of low-priced raw materials and capital goods. The 10% rate attempts a balance between low-priced inputs and emergent industries in the region producing intermediate products, which increases trade in inputs and promotes vertically integrated production structures.254 The 25% duty rate protects industries that produce finished products. For each tariff line, a number of considerations were taken into account in determining the rate, including the need to promote competitiveness in the region, availability of or potential capacity to produce the product, and revenue implications. Before the launch of the customs union in June 2009, the key instruments required had been finalized and adopted, namely the CET, the Common Tariff Nomenclature (CTN), and the Customs Management Regulations (CMRs). The regulations governing the customs union were adopted, providing policy space and flexibility for dealing with contingencies. In particular, a provision was made for safeguard measures, and regulations for customs union non-members ensured that the CET would not apply against them in intra-COMESA trade— instead, the FTA regime would continue to apply. A Committee on the Customs Union was established to oversee the implementation of the three-year transition period and to address any outstanding and emerging issues. At its first meeting, the committee adopted a roadmap for the three-year transition period, which listed outstanding issues to be addressed and steps to be taken by the member states in order to achieve the customs union. The most important steps were domestication of the CMRs and the CTN as well as preparation and gazetting of schedules for alignment of the national tariffs to the CET. Three schedules were produced: the schedule for tariff lines with rates that were already aligned to the CET rates, the schedule with tariff lines where the rates were not aligned but were to be aligned within the transition period, and the schedule where the tariff lines would only be aligned in the long run or even excluded from the CET for religious and cultural reasons. The secretariat produced guidelines on domestication of the customs union instruments, setting out the steps to be taken at the national level, as well as draft schedules for alignment for each member state. The secretariat assisted member states with tariffs with specific duties to convert them to ad 99

valorem equivalents, working closely with the WTO Secretariat. The COMESA Secretariat undertook studies on the key outstanding issues of the 5% duty rates and how member states with a substantial number of tariff lines with rates below the CET rates could deal with the customs union. Studies recommended that the CET structure of 0%-10%-25% should be maintained and that once the concerned member states prepared their lists of sensitive and excluded products, it would be obvious that the policy space and flexibility of including safeguards could be applied to fully address any residual issues. The studies assessed the implications for competitiveness and revenue losses and found that fears were exaggerated. Their finding was supported by the empirical experience of the EAC, which has been operating a successful customs union since 2005. As a last resort, the studies recommended progressive alignment, providing detailed scenarios for partial alignment. To resolve all outstanding issues, the secretariat approached member states to assist them in facilitating national stakeholder workshops, where the customs union would be comprehensively discussed and consensus reached for the next steps. Successful missions and workshops helped to develop clear roadmaps for implementing the customs union. On its part, the Ministerial Council made a number of additional decisions to streamline the process of implementing the transition period. The decisions set thresholds for sensitive and excluded products of 20% and 5% respectively (the third schedule), clarified the policy space and flexibility available to member states, and recalled and reaffirmed the need to implement the transition period. Customs union opponents found fault with the studies produced and pushed for additional studies, for which there had been council decisions in favor. This trend didn’t stop even when the summit decided to set up a Ministerial Task Force on the customs union, made up of seven countries, to provide leadership by example and political guidance in the exercise of implementing the customs union. At its first meeting, some key members of the Ministerial Task Force raised concerns that practically undermined its stature and purpose. Sudan raised the issue that its revenue base had been greatly weakened due to loss of most of its oil reserves to South Sudan when the new country was created, Egypt voiced a concern that raising customs duties on food stuffs would result in food insecurity and possible civil strife, and Zimbabwe claimed that its economy suffered from sanctions. The argument was that the customs union threatened the revenue sources of these countries. This outcome diminished the prospects of the Ministerial Task Force serving as a catalyst for implementing the customs union. The most important decision of the task force was to set new timeframes for taking the precise steps for producing tariff alignment schedules and domesticating the CTN and CMR. These timeframes, however, were redrawn 100

as a subsequent extraordinary meeting of the Ministerial Council decided that the three-year transition period should be extended by another two years to June 2014. The secretariat addressed all issues raised against implementing the customs union over the three-year transition period in a comprehensive paper. The issues encompassed the following: loss of sovereignty, the belief that the existing FTA is adequate, the feeling that the Tripartite FTA suffices and should be prioritized over the customs union, the policy reversal for countries that would have to raise their duty rates in adjusting to the CET rates, the anticipated loss of revenue and decimation of domestic industries, poor economic situation in some member states, the lack of capacity in member states, and the issue of tariff lines with a customs duty rate of 5%. The secretariat addressed each of these concerns. It pointed out that there would be no loss of sovereignty but rather a sharing, in limited or selected areas, that would collectively strengthen the member states when they coordinated and worked jointly to address regional challenges with third parties. The secretariat clarified that the customs union would build on and consolidate the FTA and would not conflict with the Tripartite process, which similarly aimed to ultimately merge the three RECs into one. The secretariat explained that the policy reversal regulations already provide that the FTA acquis would be maintained under the customs union. The FTA regime would continue to apply among the member states, and the CET would not apply to trade among member states. The possibility of derogation was highlighted. The compensatory mechanism for temporary revenue loss (the COMESA Adjustment Facility) is available to help alleviate some member states’ concerns regarding initial losses on joining the FTA. As for the protection of domestic industries and the bad economic situation in some member states, experience under the FTA showed that trade was booming and had no adverse impact on domestic industries, besides the possibility of listing some key products as sensitive or needing safeguard measures. Another issue raised was the position of the four member states belonging to both the EAC customs union and COMESA: Burundi, Kenya, Rwanda, and Uganda. In fact, the two unions were similar, given that the EAC CET was largely based on the draft COMESA CET. For instance, about 74% of the tariff lines of the two CETs had similar descriptions and rates and were therefore harmonized. The remaining 26% were different due to misclassification or inconsistent descriptions and could therefore be amended. The other cause of difference was that, as a larger REC, COMESA had a few more tariff splits than the EAC. These too can be discussed and agreed upon by the two RECs for harmonization, especially during the periodic reviews required for the COMESA and EAC CETs. 101

On the CMRs, the analysis established that the main difference was that the COMESA CMRs granted more power to the member states while the EAC Customs Management Act (CMA) was specific and detailed. On this, the proposed way forward was that the four member states could use the EAC customs law as their national law that implemented the COMESA CMRs. This way, any perceived differences between the EAC and COMESA customs unions could be addressed, which would resolve an existential political issue—i.e., that the four member states could belong jointly to the two customs unions since they were harmonized, and they would not have to choose between EAC and COMESA. This outcome was important. It meant that the EAC formed a core group of countries spearheading regional integration in the southern and eastern African regions and perhaps Africa at large, given the fast progress and the membership of the EAC countries in other regional economic communities and in the African Union. There was a need to ensure harmonious development of future integration programs so that member states of any regional economic community were not confronted with inconsistent regimes. Member states discussed these issues and called for further studies. It is worth noting, however, according to the reports of the meetings, that member states rejected any findings or conclusions they did not expect or that were inconsistent with their prior positions. Following this debacle, the secretariat proposed the establishment of a Subcommittee of Heads of Customs. The idea was that customs officers were better placed to deliberate on customs matters, as opposed to officials from trade ministries who made up the Committee on the Customs Union as well as the subsequent Ministerial Task Force. The subcommittee was set up, and it adopted the approach of viewing the customs laws and the tariff nomenclature as trade facilitation instruments that could be implemented within the overall policy framework of the World Customs Organization and the CET’s duty rates on inputs and finished products. Significant progress was quickly made with this approach, building on the flexibility and policy space in the customs union regulations that ensured the continuation of the FTA treatment and provided for the possibility of safeguards and exclusions. This innovation demonstrated the importance of lessons and adaptability in addressing sensitive and complex issues in regional integration. 4.4.1 COMESA and EAC as supportive RECs A critical question was whether implementing the COMESA Customs Union would weaken the EAC Customs Union. The fear seemed to be that as the COMESA Customs Union was larger, it would swallow the EAC and make it redundant. However, this seemed unfounded, as the EAC was likely to continue moving much faster and deeper than larger RECs because it was 102

already a functioning common market and had concluded a protocol establishing its monetary union. This meant it would continue to lead on core integration programs, possibly until it became a federation as provided for in its treaty. The EAC established its customs union in 2005, completed the transition in 2010, and had vigorously embarked upon a program for the single customs territory to deepen the customs union toward free circulation. This illustrates another instance where the EAC would remain a relevant leader with a fast track for its member states toward a single customs territory with free circulation of goods. Lastly, the existence of EAC, COMESA, and SADC proved that the RECs with multiple memberships could still exist and have a role, though they would work more closely and converge in key areas.255 Indeed, this is the point of using the RECs as building blocs for the Continental FTA and the Continental Common Market. Within the latter, the RECs will still have a role as a system of local governance or subsidiarity on the basis of pragmatic considerations. In international relations, countries always act in their best interests. In the context of globalization, supporting and seeking the good of other countries may be in the best interests of a given country, as enlightened self-interest. The four partner states who are members of both the EAC and COMESA (Burundi, Kenya, Rwanda, and Uganda) have an abiding interest in COMESA. In trade terms, COMESA remains the leading export market for Kenya and Rwanda and the second or third leading market for Burundi and Uganda, respectively. It is in the best interests of the EAC countries to maintain or develop their market shares in COMESA, which is a much bigger market. Indeed, the EAC Treaty recognized this and provided for relations between the EAC countries and third-party countries. It is important to emphasize that the REC customs unions are supposed to be building blocs for the continental customs union. The Economic Commission for Africa’s 2012 study placed the COMESA Customs Union in the overall paradigm of the continental integration program. The study found that trade would more than double if the continental FTA was accompanied by trade facilitation measures such as customs facilitation and modernization measures, whereas the increase would be only to 15.5% without those measures. Under a continental FTA, however, even when accompanied by trade facilitation measures, Africa’s exports to the rest of the world would decrease by 18.8%. But with a Continental Customs Union—that is, with a continental common external tariff along the lines of the COMESA structure—intra-African trade would more than double, and exports to the rest of the world would increase to US$91.0 billion.256 It was decided that as a practical matter, member states should formulate key next steps to take at the national level in implementing the COMESA Customs Union. Such steps could include immediate submission of explanatory briefs to management and policymakers in key relevant ministries, retreats and 103

national task forces made up of all relevant stakeholders (taking into account any existing committees on implementing COMESA programs, stakeholder awareness activities, preparation of action plans, organization of national workshops, and continuous monitoring and evaluation of the national action plan), review and preparation of national laws, enactments by parliaments, dissemination to customs posts, capacity building for relevant implementing agencies, and continuous liaising with the secretariat on any key issues arising. The real reasons The reasons why some member states were reluctant to move forward on the customs union and on regional integration were different from what they stated in the formal meetings. In addition, some member states prioritized access to important markets of third-party countries. The CET would affect those FTAs. Egypt, for instance, is a member of the Arab FTA and would find it problematic to apply the COMESA CET because ensuring Arab unity is a key piece of Egypt’s foreign policy. Besides, the Arab FTA is to become a customs union in due course and work on this is advanced. Other FTAs are with the EU, the European Free Trade Association (EFTA), Turkey, and the South American trade bloc MERCOSUR. Mauritius likewise has a free trade area with India and other third-party countries, against which it would not want to apply the COMESA CET. Mauritius also pointed out that its economic liberalization programs are underpinned by donor and partner funding and conditionality against policy reversals, such as implementing the CET. Zimbabwe, Madagascar, Mauritius, and Seychelles have concluded and ratified economic partnership agreements with the EU, which provide for bilateral FTA market access arrangements. The COMESA Treaty has the standard provision that recognizes this possibility but requires notification to COMESA and consistency with the objectives of COMESA. In this case, the objectives include establishment of deeper economic integration covering the COMESA FTA, a customs union, and a common market. It is important that the treaty incorporates these requirements, because FTAs with some third-party countries are resulting in adverse implications for the COMESA integration program. The third parties involved obviously would not support this, particularly not the application of the customs union’s CET. This trend is observed in many other AU states and is likely to come back to haunt the continent’s integration process. The political fallout would be obvious, and the entire paradigm for continental integration would be put in question, if not abandoned. In reality, influential individuals with vested interests, especially industries that need patronage or protection from competition, have access to leaders in government. Implementation of regional integration programs takes place in 104

this context. Trade negotiations increasingly occur first at the national level between governments and influential private sector operators. These may commit governments to pursue certain national positions reflecting objectives that are favorable to influential stakeholders, such as the private sector.257 This is not surprising given the priority programs that governments have been pursuing, such as attracting investment and improving business environments. This has given the private sector access to executive and government officials at the highest political level. In fact, government officials from trade ministries may in a number of cases enter meetings with mandates that ignore the broader objectives of inclusive development but instead are narrowly limited to increasing the number and size of investments and to protecting important domestic industries. Instead, to ensure inclusive development, governments would be advised to fully accommodate all stakeholders in a balanced manner, including consumers who are usually left out of major discussions due in part to lacking consumer organizations and lobby groups in some member states. This is why trade agreements always provide a degree of policy space and flexibility. This allows governments to handle such situations by accommodating the need to protect certain industries without leading to overall welfare loss or rent-seeking behavior. Governments must first undertake proper analysis based on adequate data to make informed decisions that they can implement transparently, after notifying other member states. But inadequate analysis and data can result in opaque positions that do not promote constructive engagement or regional integration programs. In most member states, regional integration falls under the docket of the trade ministries. In the absence of adequate ownership and involvement by the influential ministries of finance and planning and foreign affairs, regional integration has not been appropriately prioritized in development planning and national budgetary allocations. It is not uncommon for trade ministries to get a mere 1% allocation of the national budget. Apart from more financial and human resources, this calls for the establishment of an inter-institutional framework to mobilize all relevant ministries to the regional integration effort. Unfortunately, most member states’ units dealing with COMESA matters have weak human resources and financial allocations. The approach in the EAC to have entire ministries dedicated to EAC affairs is a good practice to consider. Above all, treaty obligations and adopted decisions by the heads of state and government and by the council have not been implemented. Without implementation, there cannot be much progress. Member states must follow through with their commitments not only for internal welfare gains and the region as a whole but also in the name of African solidarity, the longstanding spirit of pan-African liberation, and the solemn matter of duty and law.


Implementation obstacles There are several reasons why implementation has lagged. The overarching legal reason is that the COMESA instruments are not domesticated by the member states. Domestic policy instruments and action plans should help operationalize the COMESA obligations within internal legal, economic, and political systems. This lagging inertia can be attributed to, among other things, dysfunctional government or civil service following years of economic survival that has diminished the work ethic. In other cases, there is a culture of impunity where no rule of law holds governments accountable to stakeholders; international obligations are forgotten before the ink dries; treaties are not enforced in regional courts (although the EAC Court is increasingly generating important jurisprudence and establishing itself as the linchpin of the EAC integration program); and there is a paucity of integration lawyers in government (civil service, executive, parliament, and judiciary) and in private law practice.258 There are institutional reasons for slow progress as well. Integration instruments and programs are not in the national long-term, medium-term, or annual plans; there is a lack of dedicated ministries or inter-ministerial coordinating committees that would otherwise enable laws within appropriate ministries; regional integration is not adequately mainstreamed into national decision-making processes as a regular agenda item; there are weak or no parliamentary committees on regional integration (to demand accountability of implementation and prioritization); and multiple memberships exist, which causes the possibility of conflicting sets of regimes to have to rectify. The more hefty reasons, however, include the following socio-political factors: unsupportive or integration-blind foreign policies of member states (regional integration is not as important a priority as relations with some thirdparty countries who are important cultural, trade, or development partners), weak coordinating ministries without clout, human and financial constraints, no dedicated training on regional integration in institutions of higher learning in the member states, weak participation and ownership by stakeholders (private sector associations and entrepreneurs), and a lack of cogent public relations machines for COMESA to market regional integration among influential stakeholders. A national policy and planning tool is, therefore, required to prompt governments to ensure that regional integration is fully factored into all the planning, budgeting, and implementation or operational processes at the national level, covering public and private sector stakeholders. The poverty reduction strategy papers could serve as a template for similar papers for regional integration. Malawi and Swaziland have recently attempted this with the technical assistance of the Economic Commission for Africa. In the COMESA region, no one will lose an election with a platform that disregards regional integration. Regional integration has yet to be a visible factor 106

in the national and regional socio-political processes such as media, education, or local government. But the business community is far ahead of government, in a parallel domain, in terms of their regional cross-border enterprises and their struggle to survive the inaction or misfeasance of governments in the form of nontariff barriers. Funding for regional integration is shamefully inadequate. It is donors who largely fund the integration programs, and this is not unique to COMESA. Donors fund more than 70% of the African Union budget, yet alternative sources of funding proposals have been vigorously resisted by some heads of state and government at the African Union summits. The Obasanjo Report recommended an additional charge of US$2 per hotel stay and US$10 on air tickets into and out of Africa, which unsurprisingly drew some objection. Best practices from ECOWAS, however, offer hope. Its community levy is functioning successfully, yielding upwards of US$630 million a year, and at the AU level, governments in 2015 finally agreed on a levy to contribute to the continental Peace Fund and integration programs. At this time, member states have not yet fully embraced integration. The policy and law apparatus has not adequately been mobilized to the integration effort. We argue that those who resist or downplay regional integration are vigorously advancing political and economic weakness. Frameworks are required for harnessing economic improvement, and regional integration is a prime framework. In addition, governments are legally required to implement integration obligations. In 2001, Mauritius replaced the existing 0% duty rate on imports of Kapci paints from Egypt with a rate of 40% under a bilateral arrangement between the two member states instead of invoking the provision for safeguard measures, namely, Article 61 of the COMESA Treaty. On February 15, 2012, Polytol Paints, based in Mauritius, brought a case in the COMESA Court of Justice against the government of Mauritius complaining that the government imposed a customs duty of 40% on its imports of Kapci paints from Egypt from November 16, 2001 up to November 20, 2010. Over this period, the company had paid the duties, which it now sought to be refunded. The Mauritius Revenue Authority had declined the claim for the refund. The Supreme Court of Mauritius supported this rejection, in a case in which it decided that “non-fulfilment by Mauritius of its obligations, if any, under the COMESA Treaty is not enforceable by the national courts.� In a landmark judgment, Polytol Paints v The Government of Mauritius, delivered on August 31, 2013, in Lusaka, the COMESA Court of Justice decided that the Government of Mauritius, by imposing a customs duty on imports of a product (car paint) from Egypt, acted contrary to Article 46 of the COMESA Treaty.259 The treaty required that member states eliminate by the year 2000 all customs duties and other charges of equivalent effect on goods that originate from the member states that are in the COMESA Free Trade Area. 107

The Court ruled, in addition, that an agreement between two or more member states to reinstate customs duties on trade among themselves, in this case between Egypt and Mauritius, breaches the treaty. Instead, member states should invoke Article 61 of the treaty, which allows countries to use safeguard measures against import surges for one year after informing the Secretary General, and for additional years if approved by the Council of Ministers. The company contended that since Mauritius joined the COMESA FTA on November 1, 2000 and eliminated duties on products originating from COMESA member states in the FTA (including the Kapci paints imported from Egypt), the government had contravened the Treaty. The court dealt with a number of specific issues. First, the company’s right to bring the suit against the government of Mauritius was challenged. In this case, the court held that only the Secretary General or a member state could sue a member state for failing to fulfil its obligations under Article 24 of the treaty. The court decided, however, on the basis of Article 26, that any individual or company could bring a case against a government for breaching the treaty. Thus, there is a distinction between not implementing a treaty obligation (nonaction) and putting in place a measure that infringes the treaty (wrong action). The Court addressed the question of whether or not the government of Mauritius acted consistently with the treaty when it introduced a customs duty on imports of the car paints from Egypt. The government argued that obligations under the COMESA Treaty are to be implemented progressively “irrespective of the Treaty timeframe,” because only some member states joined the COMESA FTA and not others, and also because the COMESA Council of Ministers had extended the transition period for the customs union. The COMESA Court of Justice rejected both arguments above on grounds that “Mauritius infringed Article 46 by reintroducing duties on Egyptian products including Kapci paints even if it was for the protection of its industries.” The government of Mauritius had tried to argue that the COMESA Treaty was not enforceable in Mauritius as it had not domesticated the treaty. The court explained that the government’s actions had breached the treaty and caused prejudice to the company in rights provided by the COMESA Treaty and that the government could not use its own internal laws as an explanation or a defense for not implementing the COMESA Treaty. Another important issue the COMESA Court decided on was whether or not the bilateral agreement between Egypt and Mauritius could be relied upon by the government of Mauritius. The agreement imposed customs duties on imports from Egypt contrary to the COMESA rules, which required that no customs duties or charges of equivalent effect should be imposed on imports that originate from other member states. The COMESA Court again explained that bilateral agreements between member states should aim to promote the achievement of the objectives of the COMESA Treaty, and that by instead 108

seeking to reverse the rules under the COMESA FTA, the bilateral agreement could not stand. The court explained that Article 61 of the treaty provides for the possibility of a safeguard measure that a member state facing import surges can use, instead of seeking bilateral agreements that are inconsistent with the object and purpose of the treaty. Article 56(3) of the treaty allows member states to enter into agreements among themselves only if some basic requirements are met. First, whatever agreement the member states enter into must contribute towards the achievement of the objectives of the common market. Second, the agreement should relate to a preferential treatment. Third, such preferential treatment should be extended to all the other member states provided that the other member states reciprocate. That there was communication between the States of Mauritius and Egypt on this matter is admitted by the applicant’s counsel. The argument is that even if there was such an agreement, it was contrary to the requirements of the treaty. The court then went on to cite Articles 18 and 41 of the Vienna Convention on the Law of Treaties, which provide that any such bilateral agreements can be entered by member states if it is not prohibited by the treaty and if the bilateral agreement does not create a derogation that is incompatible with the effective executive of the object and the purpose of the COMESA Treaty as a whole. In conclusion, the COMESA Court of Justice issued an order that the government of Mauritius should refund to the company the customs duties paid for the period from April 1, 2005, when the company first sent a letter formally complaining about the customs duties, to November 20, 2010, when the law was removed, with interest at the rate applied by the courts in Mauritius and to pay 70% of the costs the company incurred in pursuing the case. Looking ahead There should be strong political oversight to ensure ambitious FTAs and deeper integration. By increasing intra-regional trade, generating investment supported by larger regional markets, building cross-border infrastructure, pooling resources, ensuring critical market sizes for large energy projects, and collectively tackling conflicts and cross-border challenges, regional integration programs assist political leaders in achieving important public policy objectives of peace and prosperity. This helps create employment and wealth, especially for the youth, and provides the macroeconomic and political stability prerequisites for an improved economy. COMESA’s mandate is to deliver development in the region through the overarching strategy of economic integration and a focus on facilitating regional trade and investment. The vision of COMESA as a regional economic community—of being fully integrated, internationally competitive, prosperous, peaceful, and essential to the continental integration process—should rally all member states and stakeholders to the effort and provide the overarching framework for action. 109

Governments exist to provide peace and prosperity. COMESA provides a means of cooperation and integration for a large geographical space, population, and number of countries and is therefore a prime institution in which to operate. A critical challenge for governments at the moment is to provide employment, especially for the youth, and to ensure inclusive development so that all sectors of the economy and the population benefit from economic development and advances in technology and in the arts. COMESA’s regional integration programs aim to provide a seamless economic opportunity—a policy space that facilitates trade and investment—for job and wealth creation. Of all the known ways for improving living standards and delivering prosperity, trade is the most legitimate and sustainable. Opportunities to trade in goods, services, and assets should continuously increase; this resonates naturally with the inherent drive of individuals to empower themselves with the capacities they need to pursue their dreams and to serve society. Regional markets provide these increasing opportunities. It is well established that larger markets assist in generating and sustaining higher levels of production, which creates more jobs and raises incomes. The economic consensus in Africa is that regional markets assist in overcoming the size limitations of national markets. This is understood in the context of a developmental approach to regional integration that covers market integration and industrial and infrastructure development. This approach is the template for continental integration and is reflected in the instruments and programs of the regional economic communities and the African Union at large. Facilitating regional trade and investment requires a number of complementary interventions, given the complex development challenges. To this end, the COMESA Treaty provides for integration and cooperation in a number of areas, which improve the advantages of COMESA as a seamless economic space for trade and investment. Peace, security, and monetary harmonization programs have been designed to promote political and macroeconomic stability in the region—two essential prerequisites for economic activity. Transportation, energy, and information and communication technology programs, together with industrial and agricultural development programs that prioritize SMEs, have been designed to promote competitiveness while improving the capacity of operators to produce and move their products around the region efficiently. There will not be a regional market, however, if trade barriers are prevalent, if there is not a harmonized policy space across the countries, and if there is not a rule-based system to secure it. To assist government and economic operator planning, there should be predictability and rule of law, which COMESA addresses through its treaty and its institutions, particularly the policy organs (the Authority of the Heads of State and Government and the Council of Ministers). As a result, the FTA has been in place since November 2000 with clear rules that prohibit the re-imposition of customs duties and nontariff barriers as well 110

as systems for addressing any trade barriers that crop up.260 The most common nontariff barriers have arisen in the areas of rules of origin, health and technical standards, and customs administration and cooperation. A seamless economic space provides the required policy regulatory regime that facilitates trade and reduces the cost of doing business. Thus, there is always a fundamental reason to enact a deep FTA that provides for elimination of customs duties and nontariff barriers and addresses regulatory issues in order to adopt and implement coordinated policies in key complementary areas that facilitate trade and investment. In the context of regional trade, this must occur at the regional level. To produce and trade goods, services, and assets in the context of a regional market requires a policy space that covers customs cooperation, transfer of services, advancement of capital and investment, and movement of persons and enterprises. COMESA has been implementing a holistic approach to regional integration that addresses these issues. Moving forward, the priority is to advance and complete the program on customs cooperation since it is a key trade facilitating program embedded with an important industrial policy (the tariff bands of the CET) for the economic development of the region. With this program ongoing, there is merit in quickly facilitating the free movement of services, capital, investment, persons, and enterprises to continuously promote better resource mobility, allocation, and use in the region. In light of sociopolitical realities, the extensive work leading to the adoption of the CET structures, the allocation of duty rates to each tariff line, and the additional extensive work done to address hesitant member concerns will be critical. Any decision should seek appropriate derogations from or accommodation within the customs union while the rest of the willing member states proceed to implement the customs union progressively in line with adjustment programs. Just as the COMESA FTA was started by nine member states in 2000 with other member states gradually joining over the years, similarly member states that are ready can start the customs union with a commitment to report on annual progress. Member states can take an initial step to lock in what parts of their national instruments are aligned with the customs union instruments, namely, the customs duty rates, the common tariff nomenclature, and the Customs Management Regulations. The COMESA Secretariat produced relevant draft tariff alignment schedules for each member state to use as a starting point, and there is a council decision that each member state should implement that schedule within the transition period. Lastly, member states are required by council decision to produce the schedule of tariff lines and excluded products that they will not align to the CET rates for religious and cultural reasons. The Council believed that each member state would be in a position to readily produce this schedule, as they have laws 111

in place that prohibit certain imports or regulate and restrict certain products, and therefore know these products. The customs union should not be abandoned simply because a few member states have concerns. Those concerns should be addressed while the rest of the member states could proceed with the implementation. Some critical areas now deserve the fullest attention of the region. The volume and value of intra-regional trade in COMESA and Africa at large has been increasing over the years, but the percentage remains low, because trade with the rest of the world has increased much faster. There are a number of issues that should be addressed to increase intra-regional trade. The existing potential for intra-regional trade is constantly set back by the prevalence of NTBs, which restrict trade or increase the cost of doing business. A robust program addressing NTBs remains a priority. The COMESA trade facilitation program has been implemented over the years and provides clear guidance on its broad scope, which includes adoption of common simplified transit procedures, adoption of simplified procedures for small-scale traders, standardization and reduction of the number of documentation procedures, a common definition of transportation standards, adoption of health and technical standards, establishment of one-stop-borderposts, and consistency of other trade-related infrastructure. Robust programs to address constraints that SMEs face will cover financing, skills, management, marketing, and formalization limitations. COMESA has developed a regional SME policy and fund as concrete interventions. Given that SMEs comprise up to 90% of the private sector in many member states, these interventions are critical. The strong economic growth rates in Africa have attracted a lot of attention. It appears that African development has taken off. It is estimated that by 2050, Africa’s GDP will be at US$29 trillion or equal to the combined GDP of the US and the EU in 2012. There are risks of reversal, arising especially from civil unrest and climate change. Economic growth in Africa stemmed from political stability, macroeconomic stability, business reforms, and a rising consumer class.261 Regional integration has been part and parcel of this story through the peace and security, monetary harmonization, trade facilitation, infrastructure, industrial, and agricultural development programs. Trade in natural resource products has contributed to this boom, although estimates are that mineral resources constitute only 14% of this growth. Nevertheless, regional integration should step in to provide member states with appropriate policies for jointly developing and benefitting from the vast natural resources of the region. Resource-based industrialization has been discussed at length. What is required is a robust program for ensuring that Africa appropriately benefits from its natural resources. This ranges from terms of access contracts to the major policy interventions relating to taxation, value 112

addition and beneficiation, employment, sustainability, and corporate social responsibility. In addition, it is crucial to ensure that members’ bilateral investment treaties avoid limiting policy space and preventing pertinent policy interventions. Some of these clauses include prohibition of performance requirements and extravagant rights for investors such as expropriation and requirements for compensation. Any contract should account for the rights and interests of both local and foreign investors. Africa’s economic performance can be scaled up and better sustained if the science, technology, and innovation (STI) programs are appropriately prioritized. Prospects for STI programs are good. A recent mapping of institutions including the NEPAD Agency are working in the area of STI in COMESA and Africa at large and have shown that there is a critical number of these organizations and science communities led by the African Academy of Sciences, the Africa Science Observatory, and the AU-NEPAD science programs. Member states must now work to better connect these programs with local communities. The forces that sustain STI are prevalent in Africa: a large, rising, youthful middle class; philanthropists who provide funding; do-it-yourself innovators generating new products; and breakthrough platform technologies in the information and communications field that are positioned to address critical global challenges in agriculture, energy, housing, education, and health. Rwanda provides a good case study of how to rigorously implement STI programs with immediate visible results to set the tone and framework for national development initiatives. Lastly, any program that is adopted must also be implemented. There is merit in considering a system of regular peer review of the implementation of regional integration obligations. The COMESA program on producing reports on member states’ status of implementation of treaty obligations and council decisions can be scaled up and institutionalized. 4.5 Conclusion COMESA is a trade and investment organization. As such, it can offer three lessons regarding the FTA and free movement of goods. First, variable geometry was used to launch the FTA in 2000, which has now grown to cover all member states except DRC, Eritrea, Ethiopia, and Swaziland. Second, a robust regime was put in place for dealing with NTBs, which assisted in freeing the movement of goods. Third, in order to support the FTA, various complementary programs and specialized agencies needed to be established. The complementary programs addressed productive capacity constraints on industrialization such as the SME and cluster programs, agriculture, and private sector development; facilitated trade such as the Regional Customs Transit Guarantee and the Yellow Card; and built infrastructure. The specialized agencies include the Trade and Development Bank, African Trade Insurance Agency, the Re-insurance Company, and the 113

Regional Payments Clearing House. Together, these programs and institutions supported and promoted the performance of the FTA and the movement of goods. The fact that a regional economic community continues to exist, providing a framework for countries to address key issues, is a feat that should never be downplayed. On this ground, COMESA has been a resounding success. Ownership by all relevant players is necessary to match the vision with performance. Government, the private sector, academia and embedded research institutions, and outside partners should be involved in all stages of design and implementation of programs. Such ownership will come from the full knowledge that the regional integration programs will accommodate the political economy priorities of member states by building flexibility into the agreements and programs. Raising awareness among all stakeholders, especially those with vested interests, particularly in the private sector and in government, is critical to assure them that the regional integration programs are beneficial and respect global geopolitical realities. Economic integration is an ambitious program that requires complementary specialized agencies and institutions to assist stakeholders. In addition, programs that complement trade and investment will be required, such as those on infrastructure, industrialization, and modernization of agriculture. Other complementary programs should assist governments that experience adjustment challenges with short-term support in cases of revenue losses before collections from trade taxes (especially VAT) begin to rise with increased trade from the regional integration programs. Regional integration programs should be part of the social political processes for forming public opinion and defining national priorities. To achieve this, member states’ education systems must engage in comprehensive curriculum reforms that ensure the adequate teaching of regional integration from primary schools to institutions of higher learning. These capabilities should be complemented with adequate human and financial resources in government. Poorly staffed governments will not implement regional integration programs satisfactorily nor will governments without the required financial resources. Above all, a key lesson is that analytical work is critical if regional integration programs are to be evidence-based and if issues are to be transparently addressed. When leaders have clear facts and analytical data, they can make decisions more easily and calm fears to pave the way for program implementation.


5. Trade facilitation 5.1 Meaning and importance of trade facilitation 5.2 The COMESA FTA framework for trade facilitation 5.3 COMESA trade facilitation programs 5.4 Negotiating the TFA – Africa’s concerns and priorities 5.5 Freight and logistics 5.6 Conclusion Having looked at the common vision for continental integration in part I, the book turned to experimentation and learning at the level of the regional economic communities in part II, beginning with the entry points for key economic integration programs in Africa. The last chapter presented COMESA as a case study in experimentation and learning at the regional level. While COMESA prioritized market integration at the beginning, intra-COMESA trade stubbornly remained low. The lesson from COMESA is that the creation of regional institutions does not automatically lead to increased trade. This is partly because countries continue to rely on national institutions that were created under previous trading regimes. The regimes focus on domestic production and consumption as well as on linkages with former colonial markets for raw material exports and finished product imports. To foster trade, regional trade flows require a new set of facilitation mechanisms. This chapter focuses on trade facilitation as a critical aspect of promoting the exchange of goods, services, resources, and ideas at the regional level. It is a slow process that involves learning new practices and putting in place new institutional arrangements. This chapter mainly addresses the interface of the World Trade Organization’s Trade Facilitation Agreement with ongoing trade facilitation initiatives in the context of regional integration in Africa, taking the Common Market for Eastern and Southern Africa as a case study. It came as no surprise when the Ninth WTO Ministerial Conference adopted the Agreement on Trade Facilitation in December 2013 in Indonesia. The case for trade facilitation was overwhelming and the necessary changes long overdue 115

for Africa, which ranks as the costliest continent in the world to do business in, despite its low competitiveness. Even with this trade facilitation disadvantage, foreign direct investment in Africa is rising, increasing by 4% in 2013 to reach US$57 billion.262 In fact, in 2014, about 85 million jobs were expected to move out of China as the cost of labor rose to match the higher socioeconomic development levels. The question was whether Africa could get those jobs by improving logistics263 and the business environment, introducing a cluster-based industrialization strategy, and strengthening regional markets that, through the economies of scale generated, could support high investment levels. Long before the WTO adopted the Trade Facilitation Agreement in 2013, COMESA and other regional bodies including ECOWAS, SADC, and EAC had been experimenting and developing comprehensive trade facilitation programs, drawing on international best practices from the World Customs Organization and spurred by actual regional bottlenecks and challenges. Corridor and customs programs and facilitative institutions existed in the regional bodies. Trade facilitation has been identified as integral to market integration, for products could hardly be expected to move across borders without the enabling national and regional policy frameworks. For COMESA, trade facilitation was an early entry point. The predecessor organization, the Preferential Trade Area for Eastern and Southern Africa, established in 1981, already started a number of flagship trade facilitation programs. These interventions were carried forward into COMESA when it was established in 1994, and they were continuously improved and scaled up. This chapter first sets out the meaning and importance of trade facilitation and then the COMESA framework for trade facilitation. The chapter then examines the priorities of Africa in negotiating the trade facilitation agreement, and after looking at the challenges faced by the logistics industry, follows up with a case study of a one-stop-border-post project at Chirundu as a key tradefacilitation initiative in the region. 5.1 Meaning and importance of trade facilitation Facilitating trade requires reducing and simplifying the documentation for exporting and importing goods; shortening the time spent at border crossings for goods, vehicles, and persons; publicizing information and applicable rules; digitizing documentation and processes; using tested international best practices in management of border operations; and having efficient border customs, standards, environmental, immigration, and statistical agencies that address constraints faced by importers, exporters, and logistics people.264 The cost of doing business in Africa is high in contrast to other regions, and this has significantly contributed to the perceived unattractiveness of Africa as an investment destination. Investment impediments include such nuisances as 8 116

documents to export an item, 9 documents to import, 31 days to export, 37 days to import, US$1,990 to export a 20-foot container, and US$2,567 to import a 20-foot. container. These figures are twice or three times those of some other regions of the world. For this reason, improving the business environment to reduce the cost of doing business is an important priority for national African governments as well as for the regional economic communities. Within the framework of regional economic integration, in COMESA for instance, trade facilitation has consistently been a key priority, both in terms of overarching programs and of specific projects. The ultimate objective of trade facilitation is to reduce the cost of doing business and improve the competitiveness of products. Efficiency and reduced costs increase profitability for producers and traders. In turn, this promotes investment, productivity, and development of enterprises, resulting in decent jobs for the people. Trade facilitation also benefits consumers through low prices and better efficiency, including faster product delivery and improved access to basic goods and services. Governments see trade facilitation as an important means to achieve the public policy objectives of wealth creation, prosperity enhancement, and job creation. Facilitating trade across Africa will help sustain the current positive trends toward continental socioeconomic development. Indeed, boosting intra-African trade, including through trade facilitation265 and establishing a continent-wide free trade area, is a top priority officially adopted by the January 2012 African Union summit. In the agricultural sector, for example, boosting trade-related infrastructure— supported by regional economic integration initiatives to create regional markets—would help facilitate trade in agricultural products and would lead to agricultural modernization. Facilitating trade in agricultural products is vital to improve food and nutrition security and to improve rural livelihoods. Because up to 70% of the population derives its living from agriculture, this is a direct intervention for improving human wellbeing. Trade facilitation can also address the malaise of corruption. In The Bottom Billion, Paul Collier points out that trade barriers or restrictions are a source of corruption: The corruption generated by trade restrictions works on both grand and petty scales. On the grand scale, governments confer protection on the businesses owned by their friends and relations, or ones that pay for the privilege. At the petty level, actually running the system of protection day by day can be lucrative. Becoming a customs officer is about the best job you can possibly get in these countries.266


Strategic leaders have seen trade facilitation as a possibility for building entire cities or hubs and creating jobs and wealth. Gateways can service hinterlands or landlocked countries. Landlocked countries can become landlinked countries if transit trade is voluminous enough. Zambia, for instance, is a landlocked country with eight neighbors, including the vast Democratic Republic of the Congo and its mineral-rich provinces. But geographical proximity or land-lockedness is not the only factor. Despite great port cities such as Mombasa, Dubai still manages to hold itself out as a gateway to Africa. Other successful hubs include Singapore, a global trade facilitation hub, developed as part of the transformative programs under the leadership of Lee Kuan Yew, Singapore’s founding prime minister. Malaysia has established a Digital Free Trade Zone, to operate as a trade facilitation hub for the Eastern Asia region and the world at large, in a successful partnership between the government of the country and Jack Ma, the chief executive of Ali Baba, an online trading platform. In fact, political and private sector leadership is key. Better trade facilitation can reduce stress-causing delays and complications for exporters, importers, logistics people, and business persons who need to cross borders including small-scale traders and truck drivers. It is therefore an important economic, social, and political issue requiring action. Facilitating trade requires both political commitment at the highest level and resources to formulate and implement policy and institutional reforms. In 2012, The Fastest Billion suggests that by 2050, the African economy will be US$29 trillion, which will be equal to the current combined GDP of the US and EU. The authors note, “Africa is getting richer faster than ever before and faster than most of the rest of the world, and it is achieving this against a background of improved stability and sustainability that is hard to match anywhere in the world.”267 Trade facilitation involves freedom of transit for goods, fees, and formalities as well as publication and application of trade regulations.268 It also addresses African countries’ critical public policy objectives relating to socioeconomic development through boosting intra-African trade and investment, food and nutrition security, social and political stability, and by sustaining the current booming economic performance. Political determination and acumen at the highest level are important, as is learning from best practices from around the world. 5.2 The COMESA FTA framework for trade facilitation Let us now look more closely at trade facilitation in the Common Market for Eastern and Southern Africa. COMESA has been in place since 1994 and is both an important institution for its member states and a weighty continental and global player. Its geographical location, spanning Northern, Eastern, and 118

Southern Africa, means COMESA has strategic importance in global trade and security. The overall framework for COMESA trade facilitation programs is the Free Trade Area, which started operating in November 2000 as a rule-based, dutyfree-quota-free (DFQF) and exemption-free regime with a clear prohibition of nontariff barriers.269 The COMESA FTA has been used by the business community, as evidenced by a stakeholders’ consultation forum held in Lusaka in April 2009 with about 120 participants from the private and public sectors and parliaments. Although it was the height of the 2008 financial crisis, the representative of the Kenya Association of Manufacturers noted, “We have continued to make money in COMESA, though export business to our traditional markets has been adversely affected by the current financial crisis.” In terms of the broader framework, the macroeconomic convergence program has assisted in the macroeconomic stability of the COMESA region. At the same time, political stability was assisted by the COMESA conflict prevention and resolution mechanisms under the auspices of the African Union Architecture for Peace and Security. This success has been underpinned by the rule-based system that sees COMESA as a public good. COMESA holds annual summits of heads of state and government as well as ministerial and technical meetings to review progress and chart ways forward on the integration agenda.270 This rule-based system has promoted predictability and better planning, and it has generated confidence in the regional market, which has resulted in increasing cross-border investment and trade flows. The COMESA Court of Justice, as indicated in the previous chapter, has shown that the rules can be upheld if challenged. In the case of Polytol v Mauritius, the Court, in record time, delivered its judgment that the Government of Mauritius had breached its obligations under the COMESA Treaty to maintain the free trade area regime by levying customs duties on originating imports from other member states in the COMESA FTA. The court called upon Mauritius to refund the duties levied on the company that brought the case. Elimination of nontariff barriers (NTBs) also greatly facilitates trade. The most common barriers in the COMESA region relate to restrictive practices, clearance of imports and exports, rules of origin, and transit traffic issues. The World Bank has estimated that 25% of border delays arise from poor infrastructure and 75% from poor trade facilitation. Elimination of nontariff barriers has therefore been a key priority of COMESA to ensure the success of the FTA. COMESA established an online system for reporting and monitoring nontariff barriers.271 The system operates on the basis of transparency and clarifies issues to assist the parties to resolve the matters and to facilitate trade. In addition to the online system, which is now complemented by SMS reports to 119

allow economic operators to report NTBs instantly using their mobile phones, the secretariat has organized on-the-spot verification missions for experts from member states to ascertain the disputed facts and to provide advisory technical opinions with recommendations. At the COMESA annual meetings of trade officials and ministers, there is a standing agenda item on nontariff barriers, where any member state can raise matters on any nontariff barriers for consideration. Bilateral consultations can take place in the margins of the meetings and are usually helpful in resolving issues. Altogether, these mechanisms on addressing NTBs have a success rate of over 97% in COMESA. From 2008 to 2018, all reported NTBs in COMESA (a total of 204), had been removed except for five, two of which remain unresolved since 2003 due to vested interests, namely those relating to trade in Ultra-HighTemperature (UHT) processed milk from Kenya into Zambia (health standards) and palm oil from Kenya into Zambia (rules of origin). The rules of origin disputes are about whether these products undergo sufficient value addition to meet the minimum threshold for qualifying as products produced in those countries; whereas the standards dispute is about whether Kenyan UHT milk is safe for consumption given that the bacterial load in the raw milk exceeds the maximum set under the domestic standards of Zambia. Some NTBs remain in place because influential economic operators are trying to protect the domestic market for their products against competing imports. Other nontariff barriers have been about customs procedures and documentation, re-imposing of customs duties and other charges, and discriminatory internal taxes. These have been readily addressed through better information and clarification. In the case of sanitary and phytosanitary (SPS) measures, varied privateand public-sector capacity to implement them in line with best practice and international standards remains a key obstacle to eliminate or reduce NTBs in this area. Often, the implementation of SPS measures, particularly in border controls, is considered a public health protection matter, with less focus on trade facilitation, even though the WTO SPS Agreement requires that, where there is more than one option, member states should choose the SPS measure that is least restrictive to trade or least costly to traders and in a non-discriminatory manner (by treating like situations alike). The Trade Facilitation Agreement places more emphasis on the need to balance public health and trade facilitation objectives with specific provisions on greater collaboration between SPS authorities, customs officials, and other border operators. The agreement also stresses the need for dissemination of information on SPS import requirements and notification of laws and regulations to promote transparency and facilitate trade. It is important to note than many of the transparency provisions are already obligations under both the SPS Agreement as well as the COMESA Treaty.272


5.3 COMESA trade facilitation programs Under the treaty, member states must explicitly cooperate in customs procedures and activities, adopt a common customs bond guarantee scheme, simplify and harmonize their trade documents and procedures, establish conditions regulating the re-export of goods, establish rules of origin, make regulations for facilitating transit trade, adopt a third party motor vehicle insurance scheme, adopt common standards for measurement systems and quality assurance practices, remove obstacles to free movement of services and capital, and harmonize the methodology of collection, processing and analysis of information, among others. These undertakings are elaborated upon in detailed provisions throughout the treaty, including Chapter 6 on cooperation in trade liberalization and development, Chapter 7 on customs cooperation, Chapter 8 on re-exportation of goods, Chapter 9 on simplification and harmonization of trade documents and procedures, and Chapter 11 on cooperation in the development of transport and communications. There are four specific annexes to the treaty, namely the Protocol on Transit Trade and Transit Facilities, the Protocol on Third Party Motor Insurance Scheme, and the Protocol on Rules of Origin. These protocols provide the mandate for the key COMESA trade facilitation instruments, which have been developed and implemented over the years. The trade facilitation instruments in COMESA include the following: the COMESA Customs Document (which simplified and collapsed a total of 13 different regimes into one), the Simplified Trade Regime for small-scale crossborder traders (operated on the basis of an agreed list of commonly traded products along borders and an even simpler customs document for statistical purposes), Yellow Card (a regional third party motor vehicle insurance scheme), the Regional Customs Transit Bond Guarantee Scheme (allowing transiting through all participating COMESA countries with only one transit guarantee or bond instead of multiple transit bonds for each country transited), Harmonized Road Transit Charges, Regional Carrier’s License, Transit Plates, Harmonized Axle Loading and Maximum Vehicle Dimensions, Common Statistical Rules, Automated System for Customs Data, simple and flexible rules of origin and a Protocol on Rules of Origin, online and standing mechanisms for reporting and removing nontariff barriers, Competition Regulations administered by the COMESA Competition Commission, Public Procurement Rules and a system of regional publication of tenders called PROMIS, the Fifth Freedom for regional air travel (to liberalize the skies), One-Stop-Border-Posts, COMESA Regulations on Sanitary and Phytosanitary Measures, programs on formulation of regional technical standards, and e-governance programs. These programs are in place and have been used by a number of member states to facilitate trade, but they need scaling up and replication in order to comprehensively cover the entire regional market. As one example of what more needs to be done, member states are using a Single Administrative Document 121

(SAD) based on the COMESA Customs Document; however, the national customs declaration forms in a number of member states differ in various ways including number of fields (boxes), field (box) numbering, field (box) order, and printed and on-screen presentation. The lack of harmony in implementing the regional trade facilitation instruments may create disparities in the institutional and regulatory frameworks, causing many of the NTBs to persist and remain unresolved. For example, by including the development of a commodity-specific Green Pass (GP) certification scheme in its SPS Regulations, COMESA introduced a mechanism that, while protecting health and life, has the potential to facilitate trade. The greatest challenge, however, is when member states do not adopt common criteria or an approach to operationalize the certification scheme so that it becomes an effective trade facilitation tool. COMESA is piloting approaches that can assist member states to define specific criteria for implementation of the GP scheme, including a legal framework that does not conflict with obligations under international standards and related treaties such as the International Plant Protection Convention. A number of other programs have been adopted and are at the stage of being rolled out or piloted. Two such key programs are the COMESA Virtual Trade Facilitation System, which has been piloted on the Northern (Mombasa, Kampala, Kigali), Central (Dar es Salaam, Kigali, and Bujumbura) and Djibouti (Djibouti, Ethiopia) corridors; and the COMESA Electronic Market Exchange System. The virtual trade facilitation system contains a comprehensive package of trade facilitation instruments including remote cargo tracking, advance declaration, and online customs and regulatory requirements. In addition, the electronic market exchange system provides buyers and sellers with virtual buyer-seller meetings. A third set of trade facilitation programs relate to the COMESA Customs Union, namely, Common Tariff Nomenclature based on the 2017 World Customs Organization (WCO) Harmonized System (HS), and the Customs Management Regulations based on the WCO’s Revised Kyoto Convention. A gap analysis between the COMESA Customs Management Regulations and the Revised Kyoto Convention has established that the regulations are consistent with the convention, but 10% of the regulations need updating. The Customs Union is not yet fully functional as member states are still grappling with the adjustment process. The good news, though, is that these customs programs are based on international instruments and best practices and should therefore not pose significant conceptual challenges, although there will be resource implications. There is a fourth category of trade facilitation interventions. Under COMESA’s Science, Technology, and Innovation Program, annual awards are given for innovations that have the potential to significantly contribute to the economic and social welfare of the region. At the annual awards ceremony of 122

2014, some innovations showed tremendous potential for facilitating trade. In particular, one of the innovations for the youth category was a remote weighing bridge system. By 2017, a total of 17 innovation awards had been given out. In fact, the region has produced ground-breaking innovations that the private sector has taken up avidly, resulting in efficiency, jobs, and economic development. One obvious example is M-Pesa, introduced by Safaricom of Kenya, which allows for money transfers and payments using mobile phones. The system is now replicated by a range of mobile telephone operators across the continent and beyond. A fifth category relates to COMESA’s specialized agencies. To support the integration program, COMESA established financial institutions to provide not just the much-needed credit (the PTA Bank), but also to provide insurance for noncommercial risks (the African Trade Insurance Agency) and reinsurance (the COMESA Reinsurance Agency), to facilitate international payments (the Regional Payment and Settlement System), and to underpin competition in the region (the COMESA Competition Commission). These institutions are hugely successful and profitable, and receive high credit ratings by leading credit rating agencies. The PTA Bank has been rated BB+ by Global Credit Ratings (GCR) and BB by Fitch Ratings; the African Trade Insurance Agency is rated A by Standard and Poor’s; and COMESA Reinsurance Agency is rated B+ by A.M. Best. Within a year of operation, the Competition Commission got US$7,482,810 in merger fees in 2013, and it processed mergers estimated at US$1 billion. Still, there is room for the institutions to improve further and to be more supportive of COMESA programs. A sixth category relates to trade facilitation programs that member states have initiated autonomously, such as the single windows of Kenya and Rwanda. Finally, hard infrastructure in terms of surface and air transport, energy generation and distribution, and prevalence of information and communications technologies can greatly facilitate trade and improve competitiveness. Under the Program for Infrastructure Development in Africa, the African Union and the regional bodies have identified a number of projects for resource mobilization and implementation. In sum, because of these several COMESA trade facilitation programs, some officials believe that the region is well ahead of the WTO Trade Facilitation Agreement. That said, one major area for improvement is integrated, or at least coordinated, border management, involving all agencies, which COMESA must prioritize. Furthermore, there is continuous need for training and capacity building for new entrants in the public and private sectors, especially in regard to new international developments coming from the World Customs Organization. To scale up and replicate the programs across all member states, there will always be resource requirements and the need for financial and technical partners. 123

5.4 Negotiating the TFA – Africa’s concerns and priorities Turning to the negotiations on the Trade Facilitation Agreement, there were good reasons for the Africa Group of countries as well as some other groups of developing countries to express concern during the negotiations. First, Africa has resource constraints that are bound to impede the implementation of resourcedemanding international obligations, a breach of which can attract a case before the WTO Dispute Settlement System. Taking their WTO obligations seriously, members of the Africa Group did not want to agree to obligations that they knew their governments could not implement. The Africa Group meant to implement agreed obligations in good faith as required by the Vienna Convention on the Law of Treaties. For this reason, they asked for assistance from development partners and, in terms of the WTO system, predictable assistance that matched the obligations to be entered. Earlier, this chapter highlighted the broad scope and the importance of trade facilitation, noting how it can assist governments in Africa to achieve key public policy objectives, and the importance of political determination. For Africa, trade facilitation is much more than freedom of transit, publication of documents, disciplines on fees, and quickening of imports from the rest of the world. It is about building robust regional markets that boost intra-African trade, which requires hard and soft infrastructure, integrated border management, and modernization of customs and institutions, as well as regulatory reforms. The surveys by the secretariat on how well member states are implementing their COMESA obligations have shown that member states face financial, technical, and institutional constraints. Limited financial and human resources and lack of or inadequate institutions pose challenges to implementing obligations, including the COMESA trade facilitation programs. The member states have indicated that they need model instruments to assist in the domestication of the COMESA regional instruments, to build human capacity in government through training and staff exchange, to build the required institutions, and to undertake awareness campaigns for stakeholders to improve usage of COMESA trade facilitation instruments. The WTO Trade Facilitation Agreement was concluded in December 2013 in Bali. It is a balanced and flexible instrument that allows developing and least-developed countries to prioritize which obligations they will implement immediately upon the entry into force of the Agreement (Category A), which they will implement after a transition period (Category B), and which they will need assistance to implement after a transition period (Category C). The agreement has 13 broad provisions in section I covering: publication and availability of information, opportunity to comment on laws and regulations before entry into force, advance rulings, appeal and review procedures, other measures for impartiality and nondiscrimination and transparency, disciplines on fees and charges, release and clearance of goods, border agency cooperation, 124

movement of goods under customs control intended for import, as well as formalities on importation, exportation and transit, including single window, freedom of transit, customs cooperation, and institutional arrangements. Section II has provisions on special and differential treatment for developing and leastdeveloped country members, giving, as already indicated, some flexibility in implementing the agreement. The obligations read like international best practices already, given their prevalence in the customs laws of many countries and the RECs. Obligations include the importing, exporting and transiting of goods; applied rates of duties and taxes; fees and charges; classification rules; rules of origin; restrictions and prohibitions; penalties; appeal procedures; agreements with other countries; administration of tariff quotas; and uploading to the internet the descriptions of the export, import, and transit procedures, of the forms and documents, and of enquiry points’ contact information. The challenge now is for both African countries and development partners to rise to the occasion to put in place the institutions and to implement these critical rules that could assist governments in meeting the public policy priorities of wealth creation and poverty eradication.273 5.5 Freight and logistics In recent years, African policymakers have begun to focus more on logistics and trade. Global trade statistics help explain this shift. Over the past decade, US exports increased by 303% since 2000, or 11.3% annually. Merchandise exports to sub-Saharan Africa increased to nearly US$24 billion in 2013, and SMEs contributed nearly 40% of the total value of goods. Furthermore, for West Africa, the EU has become its largest trading partner, with Ivory Coast, Ghana, and Nigeria accounting for 80% of the region’s exports to the EU, and Central African oil accounts for 70% of exports to the EU.274 Although Africa’s global trade has increased significantly, intra-African trade remains problematic. Trade within the continent only accounts for 18% of its total exports in 2015, compared to Europe and Asia, where global trade accounts for 70% and 52% respectively. In addition, 16 of 55 African countries are landlocked, causing transport costs to skyrocket. According to the 2016 World Bank’s Doing Business Index, getting a container across the Congo River costs almost US$4,500, and the total can top US$10,000 once the cost of inland transportation is added. By contrast, moving an identical container with the same cargo from Malaysia to Singapore costs less than US$1,000. Shipping a container from Africa is typically twice as time-consuming as shipping one from India and about six times slower than getting it through an American port. On average, containers sit waiting in African ports for three weeks before being taken to their final destination—compared to a week in other emerging markets.275 Delays in ports add roughly 10% to the cost of imported goods, higher in many cases than tariffs. For exports, the harm is 125

worse. In northern Mozambique, the banana industry could be 20 times larger if Nacala—a natural deep-water port—were as cost effective as ports in Ecuador. Much of the delay and cost is caused by bureaucracy, lack of competition, and lack of infrastructure. At the Kenya Ports Authority, importers have to deal with the Kenya Police, the revenue authority, and the standards bureau, all of which can delay a shipment. Arguments over the valuations of products or the tariffs applicable can last for weeks. The initial barrier is high cost of trade within the region, which is made worse by the lack of trade lane options due to poor infrastructure development. At Mombasa, the old British-built narrowgauge railway can only take 5% of the containers that are offloaded. In Lagos, Nigeria’s commercial capital, the terminals are in the city center, and it can take an entire day for a truck to get from the terminal to a warehouse. The importance of freight logistics is critical and yet often overlooked as a driver for economic development policy. Development in local sectors such as manufacturing, agriculture, textiles, and oil is restricted by borders. Facilitated freight logistics can open up local industries to global markets, which in turn supports local economic development. Among the suite of programs to improve logistics, easing movement around Africa is one requirement. The African Development Bank’s Visa Openness Report 2016 highlighted that, on average, Africans need visas to travel to 55% of other African countries and can only get visas on arrival in 25% of those countries.276 Given the importance of regional cooperation, the International Federation of Freight Forwarders Association (FIATA) has created its own regional body, Region Africa Middle East (RAME), encompassing 23 national associations out of 55 African countries.277 RAME has been active in the region, signing a Memorandum of Understanding with COMESA, which will see the two organizations optimize their respective strengths to facilitate trade and improve the delivery and management of goods and services through more efficient, safer, and sustainable logistics. FIATA emphasizes the importance for regional bodies such as COMESA to work with private sector regional bodies such as RAME in efforts to harmonize trade rules, advocate for investment in transport infrastructure, and reduce trade barriers. Education plays a pivotal role in the development of Africa’s regional trade and integration. An essential part of FIATA’s mission is to position training, development, and research in freight logistics as a priority with the aim of promoting sustained, inclusive, and equitable economic development. Several entities and programs at FIATA are committed to improving accessibility, quality, and affordability of education in Africa. These include the Advisory Body Vocational Training (ABVT), the FIATA Logistics Academy, the FIATA Foundation, the Young International Freight Forwarder of the Year Award, and the ICAO FIATA Dangerous Goods by Air Training Programme. These 126

structures both build and rely upon transformative relationships with FIATA’s Association Members. The FIATA Foundation Vocational Training’s (FFVT) Train-the-Trainer (TOT) courses are one of FIATA’s main contributions to the improvement of freight logistics across African countries. The TOT approach has been described as an instrument that changes mindsets by providing a global vision of the sector and targeted practice-oriented improvement mechanisms of the freight forwarders’ daily practices. International facilitators come from universities in Germany, Hong Kong, Singapore, Switzerland, and from international organizations including the United Nations Conference on Trade and Development (UNCTAD) to teach a 16-day course based on the FIATA Minimum Standards in Freight Forwarding, as well as elements of andragogy and practical advice on how to set up a teaching program. To ensure that the transfer of knowledge also integrates the local culture and industry situation, local trainers including customs experts, lawyers, practitioners, and governmental stakeholders are invited as guest lecturers. By 2017, a total of 13 programs had been held since the FFVT’s inception in 2003, and 241 trainers trained. In Africa, TOT programs have been held in Morocco (2016), Zimbabwe (2015), Tanzania (2012), Ethiopia (2010), Ghana (2005), and Kenya (2004). Continuous improvement is ensured by monitoring and evaluating the projects. For instance, the Ghana Institute of Freight Forwarders has become a powerful training center in the region with hundreds of graduates holding the FIATA Diploma in Freight Forwarding and the FIATA Higher Diploma in Supply Chain Management. They understood that if Ghana was to become successful among other aspiring logistics centers in the sub-region, it was important to provide adequate infrastructure and sufficient manpower for the various services related to transportation of cargo and logistics management. They supported individual companies in the enhancement of their efficiency and quality of their services in order to survive in a competitive logistics business environment. Another example is the Shipping and Forwarding Agents Association of Zimbabwe. Recognition from other stakeholders such as government and industry improved greatly on account of the TOT. Their training center has created a cadre of skilled industry professionals. As in Ghana and Zimbabwe, several other FIATA Association Members have been empowered by the TOTs to create training centers offering courses to skilled industry practitioners, young individuals interested in a career in the sector, and public sector officials looking to expand and certify their knowledge. Those who acquire the FIATA Diploma hold a global qualification that enables thousands of professionals to seek opportunities in a number of countries. The FIATA Diploma assures the prospective employer that job seekers have minimum standard knowledge of the required procedures in multimodal, 127

air, land, road, and sea transport as well as dangerous goods, customs, ICT, geography, insurance, and trade facilitation. The pool of certified professionals holding the FIATA Diploma is constantly expanding and was estimated at 15,000 in 2017. Courses are also available in electronic format, which is an evolving paradigm for FIATA. Digital learning and massive open and closed online courses (MOOCs) will enable FIATA to further promote the FIATA Diplomas globally— along with their lessons of lifelong learning, mobility, and innovation—and to equip young people worldwide with the skills and competencies the industry needs. FIATA has held 13 of its 17 Annual RAME Field Meetings in Africa. These meetings help grow logistics within the host country but also emphasize the importance of trade to the entire international community. The 2017 RAME Field Meeting, held in Casablanca, Morocco, highlighted the importance of private sector involvement in policy formulation prior to implementation. In addition, the hosting association, Association des Freight Forwarder du Maroc (AFFM), signed agreements to work with private sector associations in United Arab Emirates, Ethiopia, Tanzania, and others. Such events promote the international community’s awareness of the region’s activities through the participation of international organizations such as the World Bank, UNCTAD, UNECA, and others to identify collaborative areas. Key position papers on the continent have also served to convince policymakers to consider the logistics industry’s input. For example, FIATA’s “Keys to Unlocking Africa” and “Revisiting the Yamoussoukro Decision” have given national associations a common message for community and local governments in efforts to create common ground on regional policy that strives for integration.278 RAME has also played a leading role in engaging the youth on the continent. Africa’s population is expected to more than double from 1.1 billion to 2.4 billion by 2050, with a median age of 19.5 years old. In South Africa, the shortage of supply chain skills is one of the top five constraints to supply chains and the single biggest constraint on competitiveness. FIATA has implemented a program called the Young International Freight Forwarder of the Year (YIFFY) Award to help address this. Young professionals under the age of 32 participate in an international competition by submitting a dissertation on one key import commodity or cargo for their home country and one key export commodity or cargo. The competition has produced dissertations that realistically analyze complex issues related to the cargo transport (e.g., bulk cargo, over-sized or overweight project cargo, time sensitive cargo, reefer or perishable goods, hazardous goods, and terms of sale) and involve multimodal transport. Candidates show that young professionals are very capable of overcoming difficulties related 128

to cross-border issues such as customs formalities, bond issues, and highway ordinances, as well as complex regulatory issues such as security, pollution, and environmental protection. Realizing the importance of grooming the next generation, FIATA has started a tradition of hosting a Young Logistics Forum prior to its annual meeting. This forum invites all interested youth to participate in a dialogue with industry professionals who share their experiences. The forum has been widely successful and has been hosted at FIATA’s Regional Africa Middle East meetings. This forum and dialogue with the young candidates has helped FIATA recognize several essential aspects of how to engage millennials and postmillennials in the industry. It is important that employers recognize that young employees have fresh knowledge of their curriculum and are more current in terms of technologies and strategies. They can lay a foundation for innovation that will reflect the future development of an organization. The expansion of further higher education intakes has meant that young people represent the highest qualified age cohort of potential recruits ever. Employers find younger people more willing to learn and more open to new processes and practices. It is important to recruit young people who can grow into viable internal candidates for succession. With time, they will understand the organization and help reduce risks associated with unplanned retirements and potential staff and skills shortages. The lessons learned from the analysis of the TOTs conducted over the past 15 years lead to several conclusions. Current financing of vocational training by public authorities is inadequate to achieve competitiveness and to fill jobs in the freight logistics sector. In Africa, the private sector associations play an important role in developing training opportunities. The contribution by technical and industry partners should encourage public authorities to support the subsequent development of training centers. The development of several dedicated regional training centers would help boost education and build capacity in Africa. The participation of local and cross-regional experts helps raise awareness among participants of the job’s global nature and encourages participants to envision new opportunities. For FIATA, project monitoring and evaluation has shown that new strategies need to be set in place to ensure the sustainability of trainer pools in African countries. One idea is the development of a digital train-the-trainer course that enhances the competencies necessary for these courses to have a cascading effect, resulting in more trained trainers. The digital TOT also should be made available in French to cater to the needs of French-speaking countries. FIATA Association Members in the region have asked for an upgrade of the training tools to implement e-learning as a way to address the issue of distance and cost to students based in faraway areas. Hopefully, incorporating digital professional 129

training and education will expand and enable accessibility to the hinterland in a completely new achievable method, which would not have been possible through a classroom approach. On the policy front, FIATA members historically have been more focused on policy implementation rather than policy formulation. FIATA members need to be involved in discussions to ensure that policies cover critical issues. Intergovernmental bodies should involve private sector logistics to allow members to share industry perspectives in policy formulation. Chirundu one-stop-border-post Measures to build logistical capacity need to be accompanied by measures that reduce the delay of freight at national borders. One way to improve efficiency in the movement of freight is to create one-stop-border posts (OSBPs). An example of this is the Chirundu OSBP in Zambia.279 Chirundu is located at the border with Zimbabwe. It is a strategic point on the Great North Road sitting at two of the five major road or rail bridges across the Zambezi River. Waiting time for trucks at Chirundu reduced from up to nine days to a mere 20 minutes for accredited clients and a maximum of two days for clients who did not declare their documents in advance.280 The planning and design stage involved all relevant agencies and the local community and officials through consultation and outreach. Numerous factors were at play: logistics operators, importers, and exporters all understanding how the system works and the benefits the system provides; the legal agreement for joint sovereignty over the common control zone that gives the mandate or basis for the system; installing scanners and weighbridges; allocating funds for and the construction of the physical and soft infrastructure—e.g., the buildings and operating systems; and training officials to operate the system. The Chirundu OSBP brought down the waiting time by introducing the scanner, which scans containers in 3-5 minutes, replacing a days-long manual physical check process. It also introduced an advance declaration system, so trucks arrive when the paperwork is already done. It introduced a system of accredited clients (approved importers), which allows trucks to cross the border without prior duties payment and other checks based on the accreditation system, which provides for subsequent reconciliation and collation on dues and products. (This category is 20% of total clients but contributes 80% of the total revenue collected as duties.) The OSBP helped build trust among Zambian and Zimbabwean officials, which has promoted closer cooperation and reduced suspicion and the need for cross- or rechecking. Zambia introduced the system of payment of duties through various banks, and both countries use the Automated System for Customs Data (ASYCUDA system). Other measures included harmonizing procedures between Zambia and Zimbabwe, introducing commercial cargo gate pass, and introducing fast lanes for fuel tankers, vehicles 130

carrying hazardous substances, empty trucks, and vehicles not going to be scanned. That said, there is still room for improvement, such as the need for one desk (single window) so that all agencies can network online to reduce the number of disparate offices; reorganization of the entry and exit traffic flows and the location of the weigh bridge and scanner in order to reduce congestion or traffic jams within the common customs zone; training of new officials on the existing systems and rules and training of old officials on new developments such as the Trade Facilitation Agreement; assistance with hardware such as computers and software including strong and reliable internet connectivity for all concerned border agencies; extension of working hours for the border post to 24/7; and continuous sensitization of operators to use the advance document lodging. 5.6 Conclusion This chapter has identified the trade facilitation programs in place in COMESA to make the point that trade facilitation is not an alien initiative in the region. On the contrary, it has been embraced as a key plank of the architecture of regional integration to improve economic development and competitiveness, generate investment and jobs, and achieve important public policy objectives. Information on all COMESA trade facilitation programs is published and is in the public domain. Each member state has a coordinating ministry that works closely with stakeholders, including the business community and regulatory agencies, to provide documentation and information. The secretariat has prioritized an active awareness-creation program, under which national stakeholder workshops can be organized upon member states’ request. COMESA also prioritized the scaling up and replication of one-stop-borderposts, single windows, secure electronic cargo tracking, remote or in-motion weigh bridges and scanners, computerization of customs offices and procedures, high speed or broadband internet, training of agencies that can facilitate trade and staff exchange with countries with best practices, and development of model instruments to guide implementation. COMESA member states can continue to implement their rich array of regional trade facilitation programs. Partnerships for scaling up and replicating the programs across the entire region will be required, especially where gaps occur. COMESA is not an island isolated from the other RECs. Trade facilitation by definition should encompass the entire regional and continental markets so economic operators who wish to utilize them can do so. Indeed, in the COMESA-EAC-SADC Tripartite FTA negotiations, the approach taken was to elaborate and agree upon a common set of rules on customs cooperation and mutual administrative assistance, on transit trade and documentation, and specifically on how to implement the trade facilitation obligations under the WTO’s Trade Facilitation Agreement. If different countries adopted different approaches, the result would be differing rules applied by each country with 131

the dire consequence of nontariff barriers impeding trade and denying the achievement of a sizeable economic space with a harmonized policy and regulatory regime, the very raison d’être of the Tripartite. This experience shows that a large number of trade facilitation programs were developed to facilitate trade. The programs responded to practical challenges that faced economic operators, as a case study of the logistics industry shows. However, it remains a continuous process of improvement, upscaling and replicating across the region.


6. International trade relations 6.1 Africa’s strategies for international trade negotiations 6.2 Trade relations with the European Union 6.3 Bilateral trade relations with India 6.4 Trade relations with the United States 6.5 Bilateral relations with China 6.6 Conclusion Introduction The previous chapter analyzed how regional integration provided the impetus for trade facilitation among African countries, using COMESA as a case study. This process helped to define new departure points for Africa’s trade relations. There was a realization in Africa that creating larger markets through integration needed to be complemented with trade-facilitating measures and institutions that addressed practical problems on the ground in order to have an effectively functional free trade area. The process was part of a larger effort by African countries to engage with the rest of the world on new terms that reflected their broader view that trade was an important part of the development process, as regional markets needed to be supplemented with global markets. Expanding the markets, however, posed formidable challenges such as high tariffs on processed products, lack of information, and stringent government and private sector standards meant to protect public health or ensure good quality. African countries realized as well that they needed to address their own constraints, such as low productivity and low competitiveness. This chapter extends this analysis by examining Africa’s trade negotiations and relations with the European Union, India, the United States, and China. The search for new pathways was as vivid in trade negotiations and relations with traditional development partners as in the regional and continental institutional engineering. In the trade negotiations, African countries sought to address imbalances from the old order that structured Africa into largely a producer and exporter of raw materials and an importer of finished products. With its new partners, Africa has, through its diplomatic agency, projected its 133

priorities, seeking mutually beneficial outcomes. As all this happens in a fastchanging world, learning is critical to ensure the requisite technical, diplomatic, and organizational capacity to mount successful negotiations and maintain mutually beneficial partnerships. After explaining Africa’s strategies, this chapter examines trade negotiations and relations with the European Union, India, the United States of America, and China. The chapter demonstrates an emergent Africa shaping its destiny in relationships with traditional and new partners, through creative new pathways characterized by mutual benefits, as well as the developmental impetus prioritizing infrastructure, industrialization, new platform technologies, and innovation. 6.1 Africa’s strategies for international trade negotiations Africa’s relations with the EU, India, and China show both the potential and challenges associated with redefining its place in the global economy. Relations between Africa and the EU involved tensions between EU’s interest to maintain continuity and Africa’s attempt to advance new relations that reflected its larger developmental objectives. These tensions are reflected, for instance, in the negotiations and implementation of the Economic Partnership Agreements (EPAs).281 The cases of India and China show how Africa tried to leverage similarities between the two sides to forge mutually beneficial trade relations. The vivid omnipresence of China in Africa in the natural resources sector, but equally in infrastructure and industrialization, and the threat this seems to have posed to other partners such as the European Union and the US, has led to claims that Africa is undergoing a new wave of recolonization. This can only signal further departure points away from the equilibrium. In redefining its place in the world—especially since 2002, when the African Union was formed—Africa has sought to diversify its partnerships and entered arrangements that address its development challenges, especially regarding infrastructure and industrial development. China and Japan have, in particular, been active in infrastructure development. There are of course areas for further learning, especially in terms of restructuring infrastructure projects to promote skills transfer and sharing and of framing procurement processes within the overall human resource strategies of Africa. This will be addressed in the section on China. Evidence strongly suggests that Africa has been able to identify and put its concerns and proposals on the global agenda, which have been translated into global governance structures in areas such as international trade, intellectual property, and climate change. For example, to address the challenge of access to life-saving medicine for diseases such as malaria, tuberculosis, and HIV/AIDS related ailments, Africa strongly advanced its proposals, especially since 2001, for amending Article 31 of the World Trade Organization’s Agreement on Trade Related 134

Aspects of Intellectual Property. With support from other developing countries, the efforts resulted in a new Article 31bis, in 2005, which allows regional production and trade of medicines otherwise protected by patents and bulk importation of medicines from third-party countries produced specifically for African markets.282 This was achieved through diplomatic agency at the WTO and throughout the world to mobilize other governments, academia, and civil society, including the media. It also involved analytical work and specific negotiation proposals.283 In seeking policy space for development, Africa prepared 88 proposals in 2002 for improving special and differential treatment provisions in the WTO Agreement. Negotiations on these proposals continued well into 2017, but some progress had been achieved. In 2005, the WTO Ministerial Conference agreed that trade-related investment measures could be used for developmental purposes. Other proposals sought to reform the WTO dispute settlement mechanism, as well as improve rules for trade in manufactured, agricultural, and services products. A strategy Africa has used is to negotiate as a bloc by forming the Africa Group of Ambassadors (or Ministers, depending on the hierarchy of the meeting), who work from a written common position developed systematically in preparatory meetings facilitated by rigorous analytical work. In this regard, various think tanks such as the Economic Commission for Africa and universities and experts around the world have been given space to prepare papers and present them to Africa’s intergovernmental meetings as background or working documents. More active involvement in global trade became an important goal for Africa. Market and investment opportunities were particularly important in relations with emerging economies. Benefits of stronger relations included diversification of export markets, establishment of countervailing powers against monopolies, access to new development finance, access to FDI and subsequently to new trade, and more active participation in international businesses and competition. Africa has important economic relations with traditional partners, especially the European Union and the United States, but equally with new partners such as China, India, Turkey, Brazil, Japan, and South Korea. According to 2015 figures by the UN, COMESA exports to China stood at US$2 billion with imports at US$21 billion; exports to Turkey at US$1.3 billion with imports at US$4 billion; exports to Japan at US$448 million with imports at US$3.4 billion; exports to Brazil at US$101 million with imports at US$2.9 billion; and exports to South Korea at US$1 million with imports at US$4 billion. The picture that emerges is one of a serious trade deficit with trade partners and low trade volumes, calling for interventions to boost production and exports. There are major barriers facing African exports in third country markets. Even though raw materials and fuels exported to the rest of the world are typically subject to zero or very low tariffs, exporters still face plenty of market access 135

restrictions. First, marketing arrangements differ greatly among importing countries. Second, Africa typically lacks adequate information about foreign markets, and that lack of information may be linked to a lack of transparency by the importing country. Third, negotiations with foreign countries may be constrained by the refusal to offer reciprocity to Africa. Fourth, products other than raw materials and fuels continue to be subject to import duties and even quotas. Fifth, in negotiating better market access for their products, Africa should target tariff escalation of importing countries. There are also productspecific restrictions on some exports from Africa. Trade disciplines of importing countries may also be a major impediment to African exports. Those disciplines involve, in particular, rules of origin and SPS and TBT standards. Sixth, specific barriers affect exports of services, and should be addressed from a different perspective to that of barriers to exports of merchandise. Finally, importing country or customs area-specific issues should be taken into account. Additionally, financial and other economic constraints and risks arise from greater engagements with third parties. They include: fiscal revenue concerns and concerns about aid dependence; effects of competition on the stability of domestic markets; possibility of currency appreciation in commodity exporting countries due to strong demand for African exports and strong inflows of FDI, especially in oil and other mineral producing countries; and change in government priorities. These macroeconomic risks can be mitigated by applying stabilization policies and strategies, including exchange rate management, diversification programs, and adjustment compensation mechanisms. Many countries and regional economic communities are currently negotiating or have concluded FTAs with third-party countries to create market access for goods and services. For example, African countries have negotiated free trade area arrangements with the European Union. A proposal for a free trade area with India has also been considered. Relations with China and Japan are conducted through the Forum on China-Africa Cooperation (FOCAC) and the Tokyo International Conference for Africa’s Development (TICAD) respectively, which operate on the basis of specific action plans that are regularly reviewed to monitor progress. China, in particular, has assumed the mantle of defending multilateralism and globalization, vocally participating in and hosting global events. The one-belt-one-road summit of 2017 was one such projection of Chinese influence and global intentions to create and secure important land and sea trade routes across Asia into Europe, as well as across the Indian Ocean, the Red Sea, and the Mediterranean Sea. In relations with third-party countries, each African member state still operates separate trade instruments. The key question is how tariff reductions will be achieved without compromising individual members’ policy space. Second, within Africa, there exists asymmetry in development. In this regard, the principle of asymmetry will need to be built into the framework of negotiations. 136

Third, Africa needs to build its productive capacities in various sectors such as agriculture, mining, forestry, and fisheries. Fourth, currently most partners still operate a number of production and trade enhancing instruments. Such instruments include incentives, export-import banks, and direct or indirect subsidies, among others. Fifth, within the multilateral setting, a number of partners have offered duty-free and quota-free market access to least-developed countries (LDCs). Very few LDCs in the African region have been able to access these markets under this multilateral arrangement. The LDCs in Africa that have been given duty-free access should be able to see additional benefits out of the trade and economic relations. The COMESA customs union, development of SMEs, trade in goods, trade in services, and investment offer specific examples that policymakers can draw on in negotiating a beneficial agreement. COMESA’s Common External Tariff (CET) has three bands: imports of raw materials and capital goods attract a 0% duty rate, imports of intermediate products attract a 10% duty rate, and imports of finished products a 25% duty rate. These rates were determined after a rigorous exercise based on the industrial development needs of the region. Since raw materials and capital goods are important inputs for production, their cost affects the competitiveness of final products. This is why a rate of 0% was set. The rate of 10% for intermediate products reflects a balance of the fact that some of the products are largely imported, although regional products are also encouraged. Finished products attract a rate of 25% in order to provide a certain degree of protection to domestic industries. Another important consideration is that such a rate can attract tariffhopping foreign direct investment to the region, which seeks to benefit from the regional market while enjoying the protection of the tariff from certain imports. This CET structure allows partners to trade with COMESA beneficially, for their capital exports to COMESA would face a 0% duty rate. India, for example, plans to continuously upscale its production and exportation of machinery, equipment and other technologically sophisticated products. Indeed, COMESA’s policy is to welcome such products on a massive scale. A wide range of intermediate products can also be competitively and beneficially traded. Regarding the 25% rate for finished products, partners can take solace in the fact that this rate will afford their investment in COMESA a degree of protection from certain imports while providing the investor with the entire COMESA market. This should constitute an important consideration for COMESA in engaging partners—the attraction of investment into the region. Tariff-hopping has been recognized as an important location factor to which investors give weight. This is crucially beneficial for COMESA, because regional integration is preserved and promoted, while partners benefit as well.


Although COMESA is not yet a functional customs union, member states can still negotiate collectively as a bloc, giving them strength in numbers. However, after the negotiations, it will be up to each individual member state to decide whether or not to sign the concluded instrument. If a country signs it, then it must decide whether to approve it in accordance with its domestic constitutional arrangements for concluding international agreements. 6.2 Trade relations with the European Union Africa and Europe are linked by geography and a long, sad history of slavery and colonialism. The links extend to a post-colonial history that grew stronger in its incarnation as the Africa-EU Strategic Partnership based on the 2007 Joint Africa-Europe Strategy. The partnership covers peace and security, governance and human rights, trade and regional integration, and development issues such as human development, energy, water resources, climate change, science, space and UN-agreed upon development goals, and is complemented with action plans, financing instruments, and monitoring and evaluation mechanisms. Africa-Europe links were also strengthened through economic partnership agreements.284 The European Union has been the largest donor and export market for Africa. It has been the largest source of imports as well, although China is increasingly a contending player. A number of European countries have met or exceeded the UN target of giving 0.7% of GDP in overseas development assistance set in 1970. Those countries are Denmark (0.85%), the Netherlands (0.75%), Norway (1.05%), Luxembourg (0.95%) Sweden (1.4%), and UK (0.7%). This has been highly commended by African leaders at their meetings. It proved difficult for European countries to let go of their colonial links, which resulted in some vicious wars for political liberation. And after decolonization, it was even more difficult. As Ghana was getting its independence in 1957, the European countries were concluding the Rome Treaty to form the European Economic Community, just days apart. Six years later, independent African countries formed the Organisation of African Unity to institutionalize and upscale the liberation struggle against European colonizers. From its longstanding policy of assimilation, France pursued the objective of maintaining association arrangements with its former colonies and carried this into the European Economic Community. The YaoundĂŠ Convention was concluded to provide the framework for this arrangement, while the EEC Treaty contained enabling provisions for the association. The United Kingdom, too, brought along its former colonies into the association arrangement when it joined the EEC in 1973, and the LomĂŠ Convention was concluded to this effect, which was succeeded by the Cotonou Agreement in 2000, a treaty between the European Union and the African, Caribbean and Pacific Group of States.285 In 2020, the Cotonou Agreement will end. A fundamental question for the European Union and the African, Caribbean, and Pacific (ACP) countries is 138

what comes next. The Cotonou arrangement could be substantially revised, or each of the three blocs could conclude separate agreements with the EU, or they could agree upon a successor EU-ACP arrangement, providing one agreement but three partnerships for the three regions, could be put in place covering political, security, and economic cooperation. The EU Raw Materials Initiative adopted in 2008, supplemented by regular publications by the European Commission of lists of critical raw materials, is an important security, political, and economic pillar of the EU’s foreign policy and trade relations. The raw materials are to be imported into the EU for its security programs and for its economic development and prosperity, hence bolstering its standing in the world. It should not be surprising that this initiative has serious implications for the economic development and structural transformation programs pursued by Africa, such as processing raw materials to add value. In negotiations and relations with the EU, this has been a bone of contention. The EU has been against the idea of African countries using export taxes to promote exporting processed products rather than low value unprocessed raw materials. This was a particularly bruising issue in the negotiations for Economic Partnership Agreements (EPAs) between groups of African countries and the EU. The tension and bifurcation points between African countries and the EU are inescapable. On the one hand, African countries are fighting to be free from colonialism, charting their own destiny through socioeconomic structural transformation programs, and forming their own continental institutional arrangements. On the other hand, European colonizers are fighting to keep or maintain a hold over their colonies through association arrangements. A key trade aspect of the association arrangements was the preferential access to the EU market. Following longstanding legal battles (the banana cases) against the EU at the World Trade Organization and in its predecessor, the General Agreement on Tariffs and Trade, the preferential arrangements have been terminated and will be replaced by economic partnership agreements. The complaint against the EU was that it discriminated against other countries in similar economic conditions as ACP countries, thereby breaching the rules requiring nondiscrimination between similar products in global trade. However, least developed countries (LDCs) from all over the world could still have the preferential access on the basis of their UN categorization as such, under the Everything-but-Arms scheme. Under this scheme, all imports into the EU from LDCs enter on a duty and quota free basis except munitions. The transition from preferential to reciprocal free trade arrangements was to be achieved through negotiating and concluding economic partnership agreements between groups of ACP countries and the EU. In addition to the Caribbean and Pacific groups, Africa had five such groups—EAC, Central Africa, SADC, West Africa, and Eastern and Southern Africa (ESA). Of these 139

groups, EAC, Central Africa, and West Africa coincided with the membership of the regional economic groups recognized as the building blocs for African continental integration, that is, EAC, ECCAS, and ECOWAS. The SADC EPA group had a different membership from the SADC regional economic community, as a number of countries negotiated as part of the ESA group, which had 11 out of the 19 member states of COMESA. The EAC group was the last to be formed when it broke away from the ESA group. The proposal by the African Union to negotiate as one group against the EU failed due to opposition from some Francophone countries, especially in Central Africa. The creation of these five groups showed some serious fault lines in the cohesion of the regional economic communities and in the commitment by African and European political leaders to the African continental integration vision. Each of the five African groups was to conclude separate agreements with the EU, which would have some fundamental implications for regional economic integration in Africa. The EU has argued that the economic partnership agreements support regional integration in Africa, through rationalization of the regional bodies. However, the rationalization approach was rejected by African leaders in preference for the convergence of programs approach. Second, the EU has pointed out the flexibility in the EPAs, such as long transition periods that can allow for regional integration programs to play out first before the reciprocal trade regimes kick in. These transition periods, however, do not cover all products and the reciprocal arrangements will kick in at a designated time, regardless of the integration programs’ stage. Third, through generous EU funding, infrastructure programs support the interconnectivity of African economies, though this support is not necessarily part of the economic partnership agreements. Indeed, the demand for commensurate, predictable, and committed resources under the EPAs failed, as the EU insisted on using its internal European Development Fund (EDF) arrangements rather than including binding provisions in the agreements. The reciprocal trade obligations mean that African countries give preferential access to the EU, and the common external tariffs under the customs union programs will not apply. This already renders the African customs union programs redundant and takes away the welfare gains envisaged. The ECA computed that the continental customs union would help lead to both the doubling of intra-African trade by 2022 and a positive trade balance with trade partners.286 Assessments have found also that EPAs will result in welfare losses for African countries including in terms of deindustrialization and decimation of agricultural sectors as a result of cheap subsidized imports from the EU. 287 It also means that the EU has put itself in a position where it would be a challenge to support customs unions and closer trade integration programs in Africa. While African countries negotiated in groups, each individual country concluded a separate market access arrangement with the EU. EPAs, therefore, 140

constitute multiple trade arrangements that African governments and economic operators have to manage. Yet under their regional integration programs, African countries were to coordinate and harmonize their trade relations with third-party countries including the EU.288 As the EU is a major export market for African countries, they had to take EU policies into account. These policies have shaped African agricultural production and export trade, especially as there have been bans on imports from Africa on grounds of protecting public health in the EU. For example, in 1997, 1998, and 1999, EU banned importation of fish from the Lake Victoria region countries, including Kenya and Uganda. There were immediate drops in export volumes and foreign exchange earnings for these countries.289 EU policies for food safety were catalyzed by crises such as the mad cow disease and the foot and mouth disease. This has meant tailoring production to meet specific EU regulations, which in many cases vary from global standards or standards in other important export markets, which in turn ties African producers to the EU or requires different production lines for different export markets. Trade negotiations for the new reciprocal arrangements began in September 2002, and a first phase ended in December 2007 when 35 of 79 African, Caribbean, and Pacific countries initialed interim economic partnership agreements with the European Union. For these countries, the new trading arrangements replaced the 25-year LomĂŠ Convention. Fifteen nations comprising the Caribbean Forum (Cariforum) initialed a comprehensive economic partnership agreement. Due to major outstanding areas of disagreement, the rest of the countries could not initial comprehensive agreements; they simply initialed interim or framework EPAs. These interim instruments had a rendezvous clause that provided for continuation of negotiations to conclude comprehensive partnership agreements. The interim agreements have provisions on objectives and principles, development, market access, mandate for continuation of the negotiations, institutions, dispute settlement, and final provisions on signature, ratification, entry into force, and depositories. The annexes have the rules of origin. According to the parties, the main justification for the interim agreements was to establish a market access regime to replace the preferential trade regime under the Cotonou Agreement.290 The interim agreements were concluded in a rushed manner in order to meet the deadline of December 2007, which the EU had set for terminating the preferential arrangements. The interim agreements would provide a trade regime between the ACP and EU that was safe from legal challenge at the WTO, which is expected to assist the sustainability and predictability of the new trade regime. All the interim EPAs set out the objectives and principles meant to be pursued and achieved. In their provisions on objectives, the interim EPAs are not different from the full Cariforum-EU EPA. The agreements share the 141

following similarities: they focus on developmental aspects such as poverty eradication, gradual integration into the world economy, economic adjustment and diversification, trade building policies and trade related capacity, and the establishment of legal frameworks consistently with WTO rules, with the drive to generate trade and investment. Additionally, they equally focus on maintaining or promoting market access for ACP products into EU markets. Equal focus is placed on promoting regional integration in ACP regions and on solidarity and mutual interest between ACP countries or regions and the EU. The interim EPAs share the principle that they should build on the achievements or the acquis of the Cotonou and previous ACP-EU agreements. They specifically mention the areas of regional cooperation and integration as well as trade and economic cooperation. That said, there are differences in certain respects. The EAC EPA additionally includes the principle of contributing to addressing the production, supply, and trading capacity of the EAC. However, the EAC EPA does not include the references to special and differential treatment in the level and pace of trade liberalization for LDCs, whereas the ESA EPA takes into account the vulnerability of small, island, and landlocked countries. The EAC EPA does not include the principle that LDCs should benefit from the agreement even where they have not yet submitted tariff offers, and that they may submit these offers after signing the agreement. The EAC EPA doesn’t contain the principle of variable geometry where some countries can undertake faster trade liberalization. EPAs are supposed to be development tools to assist in the socioeconomic development of ACP countries. Both the ACP and the EU avowedly accepted this in the negotiations and have endeavored to incorporate development provisions in the EPAs. However, the ACP groups had different approaches to incorporating development objectives into the various interim EPAs, which resulted in differences in development provisions. EU negotiators on their part did not seem to share the same understanding of development and how it might be built into the EPAs as the various negotiating groups. Development was, therefore, a hotly contested issue in the EPA negotiations. On the whole, ACP regions understood development to mean strengthening their regional integration in accordance with ongoing integration programs, providing adequate resources to address structural bottlenecks and build required infrastructure, allowing flexibility and preservation of policy space for undertaking development programs as well as asymmetry in obligations, and gaining the fullest possible market access to EU markets while refraining from prejudicing market access to global markets and south-south trade. EU negotiators, on the other hand, seemed to understand development to mean that ACP countries would adopt substantial reciprocal trade liberalization and nondiscrimination obligations in the areas of competition, investment, 142

transparency in government procurement, and services sectors. The EU believed that EUâ‚Ź22.7 billion under the European Development Fund (EDF) 10 and the additional EUâ‚Ź2 billion earmarked annually for developing countries by the year 2010 amounted to considerably increased development assistance for ACP countries. EU negotiators regularly indicated that they supported regional integration, and they had no commercial interest in the negotiations as Africa was a small market, though it never seemed clear whether they wholly supported the integration process on the basis of ongoing economic integration programs. What seemed clear was that support for economic integration was in terms of funds provided for various programs including for infrastructure development, rather than ensuring that customs unions and programs for deeper integration were not disrupted. The interim EPAs have the following provisions: (1) market access or trade in goods; (2) the objective to liberalize trade; (3) the scope is limited to signatory countries; (4) a definition of customs duty, which is any duty or charge in the form of a tax in connection with the import or export of goods but excludes internal taxes; (5) fees and other charges may be levied but should never be more than the cost of the service; (6) the basic duty is indicated in the schedules; (7) duties and tariffs should be eliminated on products or according to the schedules over transition periods and differs from EPA to EPA, but the Cariforum and Pacific EPAs specifically note that schedules for tariff elimination on imports from the EU may be modified; (8) rules of origin will be finalized over a next phase of the negotiations; (9) countries must abide by a standstill obligation in which they will not increase duties or introduce new ones; (10) goods are to circulate freely and duties should be levied only once; (11) export taxes and duties are prohibited; (12) better treatment under other free trade agreements is to be given to the other party, and there will be consultations where that is the case. This last provision is problematic. Where the African country offers another country, such as Brazil or China or India, better conditions of access to its market than it has offered to the EU, then the obligation is for the African country to give the EU the same conditions of access to its market. Such a requirement on small African economies could be based on equity in dealings, but the relation between Europe and African countries is expected to fully take into account the trade and development needs of African countries. The requirement may raise certain difficulties for a given African country. In negotiations for trade liberalization agreements with other countries, including high-income developing countries, the African country will have always to consider the impact on its economy of extending similar trade terms to the EU. Brazil raised this matter at a meeting of the WTO General Council.291 The effect might be to discourage south-south trade between African countries and high-income developing countries of Asia and Latin America. It has been demonstrated that south-south trade is increasing more rapidly than north-south trade. 143

The market access provisions were important also because they directly affected ACP regional integration processes, particularly the ongoing programs in Africa that would culminate in a continental monetary and economic union. EPAs had implications for this program, because they were free trade areas of indefinite duration with third-party countries that allowed the EU preferential trade and economic relations with Africa. In contrast, the regional economic communities and Africa at large were supposed to negotiate and, as appropriate, maintain a common external regime against other countries, including the EU. By the conclusion of the interim agreements in December 2007, the Conference of African Union Trade Ministers had adopted four declarations on negotiations for economic partnership agreements: the Mauritius declaration of 2003, the Cairo declaration of 2005, the Nairobi declaration of 2006, and the Addis Ababa declaration of 2007. The African Union Assembly of Heads of State and Government also adopted declarations on EPAs at their sessions in January 2007 and January 2008. The declarations constituted the common African positions on economic partnership agreements, and they were prepared with the participation of the member states engaged in the EPA negotiations and the secretariats of the negotiating groups, which, along with the commission of the African Union, constituted the committees that prepared the drafts for the negotiations. After acrimonious internal meetings, the East African Community partner states decided, at the ministerial level, to negotiate as a bloc in compliance with a longstanding directive from the Assembly of the East African Heads of State and Government. The reason for the difficulty in finally agreeing to negotiate as a bloc is unclear, but it has been pointed out that COMESA is increasingly becoming the leading export market for some East African countries, particularly Kenya, even ahead of the European Union market. For this reason, membership, or at least close association with ESA, was considered crucial. This argument may not be valid, because as an institution, COMESA is different from ESA and leaving ESA did not constitute leaving COMESA. Thus, others argue that the complication was political, for, in 2007, Kenya was chairing the ESA ministerial council, and for this reason, it appeared discourteous to leave ESA. The transition period for the EPAs of 15 or more years could make time for consolidation of African regional markets and for the creation of the regional and the African common market in accordance with the time frame established under the African Economic Community treaty.292 However, the bulk of the tariff elimination is planned for an earlier period. Botswana, Namibia, Lesotho, and Swaziland in the SADC EPA, for instance, were to eliminate tariffs on 86% of imports from the EU by 2016. Countries in the ESA group must eliminate their duties by 2022, as follows: Comoros (98%), Madagascar (89.3%), Mauritius (96.6%), Seychelles (97.7%), and Zimbabwe (87%).293 The EAC countries are to eliminate duties on 80% of the value of 144

imports within this period and 64% within the first two years of the EPA— duties on these items, being 38% of the tariff lines, are already 0%. Ghana is to eliminate duties on 80.5% of the tariff lines and Côte d’Ivoire on 88.7% within the period. This means that by the time the African common market is established, many African countries will already have obligations of long duration to eliminate customs duties on imports from the EU. The rest of this section looks at specific areas of the agreements and suggests what could have been done as lessons to carry forward. The EPAs followed two broad approaches in provisions on principles. On the one hand, the EAC and ESA interim EPAs set out basic principles allowing special and differential treatment and granting of regional preferences without extending these to the EU and building the agreements on the acquis of the Cotonou Agreement. Other principles included promotion of regional integration and ensuring asymmetry in trade liberalization, trade related measures, and trade defense instruments. The ESA EPA went further with specific and additional special and differential treatment provisions for LDCs. On the other hand, the Cariforum, Pacific, and SADC EPAs incorporated the fundamental principles and essential elements contained in the Cotonou Agreement. To address the special circumstances of SADC, the EPA provides for the application of the Trade and Development Cooperation Agreement already concluded between South Africa and the EU. Some African countries were uncomfortable with EU demands on human rights, democracy, and good governance, particularly in the context of a trade agreement. A good reason for this discomfort was that African countries had home-grown initiatives in these areas, under the Constitutive Act of the African Union and complementary instruments such as the New Partnership for Africa’s Development (NEPAD) and its African Peer Review Mechanism. They didn’t need additional conditions imposed upon them by the EU negotiators. A standard response of the EU negotiators was usually that these were important matters that should be openly addressed by the parties, and conditions of democracy, respect for human rights, and good governance were prerequisites for socioeconomic development. It was plausible that the Cotonou Agreement could continue to apply until 2020 notwithstanding the modification of its trade chapters by the EPAs; therefore, there shouldn’t be any strong reason for including its principles in the EPAs. EU negotiators have made this argument in declining to undertake financial obligations that exceed those in the Cotonou Agreement. If countries were uncomfortable with references to Articles 2 and 9 of the Cotonou Agreement, there were equivalent African Union instruments covering these principles that could be incorporated. It was feasible for African EPAs to contain the same principles with the same wording. The principles could include: special and differential treatment 145

and asymmetry in obligations and commitments for LDCs and the other African countries that are not high-income countries, the promotion of regional integration, building upon the acquis of ACP-EU trade agreements, and development cooperation to assist African countries fulfil and implement their obligations and commitments, as well as respect for internationally accepted African practices regarding social and political governance contained in relevant African Union instruments. Another approach would be to list principles de novo without reference to other instruments, along the lines of the ESA and EAC interim EPAs, in a manner that produces the same principles for all the African EPAs. The interim EPAs, as well as the full Cariforum EPA, contained dedicated sections on development. The approaches taken had both similarities and differences. The EAC approach more or less followed what EU negotiators initially proposed, that is, to have just a few clauses setting out basic principles on development cooperation. However, it clearly recognized that further work was required and provided for further consideration in the next phase of the negotiations. Cariforum, and to some extent the Pacific EPA, included a scheme for development cooperation that set out a basic understanding of sustainable development and priorities for cooperation against the background of key objectives and principles for the entire agreement, as well as commitments on regional integration and monitoring. The SADC EPA went one step further and described an even more detailed scheme and included development finance cooperation. The ESA’s approach was the most detailed, setting out the understanding of development, specific commitments and obligations, detailed areas for development cooperation including a development strategy and matrix that were incorporated into the EPA as annexes, and a specific undertaking by the European Union and the member states to contribute resources. Although each approach may have merit, more detailed approaches are best as they clearly set out the expectations, shared understandings, and commitments of the parties, as well as render the provisions into, at least, obligations that can be justified or monitored. They already reflected the considerable work and thought put into the development component of the EPAs, providing clearer guidance for the implementation exercise and for any further refinements. The market access provisions on trade in goods were also similar and different across the EPAs. The similarities mainly occurred in the treatment of customs duties, nontariff measures, and the special provisions on administrative cooperation, as well as in the provisions on trade remedies. Also, EU market access was similar in the EPAs—entry of all goods free from customs duties at the commencement of the EPA, except for the products subject to transition periods. Some of the differences were fundamental and provided useful areas for improvement in certain EPAs. These included exceptions such as those in the 146

Pacific and Cariforum EPAs on free trade agreements with major economies or for small island countries and LDCs, the duration of certain provisions and measures, and the idea of special cooperation on priority products and sectors included in the SADC and Pacific EPAs. There were also differences with respect to the additional areas covered in the full Cariforum-EU EPA, such as investment and trade in services and government procurement. Other groups had taken positions that made such provisions controversial in the negotiations. The provisions on trade in goods contained some far-reaching obligations that had fundamental implications for ACP countries under the EPAs, such as the obligation to eliminate export taxes and duties, the prohibition of quantitative restrictions, the requirement to accord national treatment to EU imports, the maintenance of current subsidy levels in the EU, and the offer to phase them out over unspecified periods for some ACP countries on products for which they undertook to eliminate customs duties. There was scope for the ACP groups to learn from each other and harmonize provisions in key areas, drawing on the important provisions in the various interim EPAs, for instance, the exceptions made to some of the far-reaching obligations and exceptions made to the length of the periods in various areas. In many cases, though, it was difficult to see whether the periods were based on good objective criteria for setting their duration. Negotiations for full economic partnership agreements continued after the initialing of the interim agreements, but not as many countries concluded the full agreements. This was in large measure a result of lessons learned from the negotiation and nature of the interim agreements. The 2016 UK vote to leave the EU also played a role. Tanzania for example, started to reexamine the welfare benefits of a comprehensive agreement with the EU. A parliamentary session in November 2016, facilitated by three experts from the university of Dares-Salaam, called upon the government not to sign the agreement. Benjamin Mkapa, a former president, also argued against the EPA. The main case against the EPA was that it would destroy the nascent industries, which were being nurtured under policies for industrialization and structural transformation.294 It was pointed out as well that in the EU, the UK was the main export market for Tanzania. In 2017, EAC member states decided not to sign the EPA and designated the President of Uganda to pursue further negotiations with the EU. In the case of the EAC, Rwanda and Kenya had already signed the EPA but were unable to convince the rest of the members to join the agreement. It is this kind of strife within the RECs that has led to the view that the EPAs are likely to undermine regional integration in Africa, in addition to their impact on nascent economies.295 The EPAs would, in effect, narrow Africa’s policy space for continental integration.296 A new approach would need to be adopted that meets Africa’s development aspirations in order for the EPAs to be viewed as compatible with regional integration. 147

The paucity of countries signing the comprehensive economic partnership agreements illustrates that Africa has taken its international trade relations seriously and continues to build on lessons from years of engagement with partners. It shows as well that the developmental objectives of Africa matter, and African leaders will take them into account when designing trade arrangements with partners. Countries that were overly dependent on EU markets were readily amenable to sign the comprehensive agreements in order not to lose their key export market; but others were cautious, calculating that their domestic economies would be ravaged to a cost exceeding the importance of the EU export market. The differences in the various interim and the comprehensive agreements, as well as the separate bilateral market access arrangements each country concluded with the EU, demonstrate a serious threat to regional integration in Africa. Regional and continental integration is supposed to continuously deepen into customs unions or common markets, and intra-regional trade boosts regional value chains and subsequently industrialization and social economic transformation; however, differing EPAs could be detrimental to accomplishing full regional and continental integration. Another lesson is that the EU remains an important partner and neighbor, and global geopolitics call for mutually beneficial engagement in tackling political, social, and economic issues. In this vein, the next section now turns to India, whose request for negotiations for a free trade agreement COMESA turned down after analysis by experts and introspection at ministerial level. 6.3 Bilateral trade economic relations with India Africa is emerging as one of India’s growing trading partners.297 The issue is whether the growing relations reflect Africa’s aspirations and approaches to international trade cooperation. According to 2016 figures by the World Bank, COMESA countries imported goods worth about US$7 billion from India but exported about US$1.2 billion to it. Most of this trade was conducted by one member state, Egypt, which imported goods estimated at US$2.3 billion and exported about US$896 million, again showing a huge trade deficit. At the other extreme, Burundi exported to India goods worth only US$149,000 and imported goods worth only US$67,000. India approached COMESA seeking negotiations for a free trade area. In 2011, COMESA ministers considered this request. After analysis and introspection, they decided instead that focus should be on promoting sectoral cooperation with India, especially in sectors that support the socioeconomic transformation of member states, such as pharmaceuticals, telecommunications, and agriculture, as well as industry and infrastructure more broadly. This further demonstrates that Africa is in charge of its destiny and engages partners from a point of information and strength through the auspices of regional integration bodies such as COMESA and the African Union. 298 148

The Africa-India Framework for Enhanced Cooperation, adopted in May 2011 at the Second Africa-India Forum Summit, builds on the 2003 Memorandum of Understanding (MoU) and sets out new opportunities for collaboration between Africa and India in the following areas: economic (agriculture, trade industry and investment, SMEs, finance, regional integration); political (peace and security, civil society and governance); science, technology, research, and development (science and technology, ICT); social development and capacity building; health, culture, and sports; tourism; infrastructure, energy, and environment; and media and communications. These new areas of cooperation, together with the political Joint Declaration from the summit, show India’s increasing global importance. The COMESA Council of Ministers considered the matter of trade and economic relations with India at several meetings. At the thirtieth meeting in October 2011 in Lilongwe, the Council constituted a Task Force of member states, its bureau, and the secretariat to engage India and to produce a report covering the following: identification of strategic and economic benefits from an FTA or a Preferential Trade Arrangement (PTA) with India; exploration of the feasibility of a comprehensive FTA or PTA covering goods, services, investment, intellectual property, health and technical standards, competition policy, and government procurement; review of the existing institutional framework and recommendation of measures to facilitate and optimize such cooperation; expedition of the expansion of trade through removal of tariffs and other barriers; expedition of the expansion of trade in services through liberalization consistently with WTO rules and covering movement of natural persons and mutual recognition agreements; development of an investment framework and modalities for increasing investment flows; and identification of areas and sectors for an early harvest such as agriculture, pharmaceuticals, and capital goods. At its thirty-first meeting in Kampala in November 2012, the Council of Ministers received the report of the first joint COMESA-India meeting held in July 2012 in Lusaka, which underscored both the need for caution in engaging India and for a coherent approach to trade relations with all third-party countries. The Council decided that a joint COMESA-India study group should prepare a comprehensive position paper for COMESA, which should form the basis for future negotiations. COMESA’s vision is to be a fully integrated, internationally competitive, and prosperous regional economic community of the African Union. Its member states’ visions are to become prosperous middle-income countries from 2020 to 2040. Various strategies are in place to achieve these visions; on the whole, they seek pro-poor and inclusive socioeconomic development through higher rates of economic development and social justice under a developmental state. The overarching continental development strategy is to widen and deepen regional 149

integration through the regional and continental common markets. These aspirations of COMESA and Africa at large will inform any trade and economic relations with India as an important partner. India’s vision, on the other hand, is to be the global technology superpower and to become a developed country by 2030. To this end, India is committed to strengthening its technological base in various key areas that are posited to be core drivers of global progress and international development. These include information and communication technology, mobile telephony, and computing, networks and sensors; nanotechnology; biotechnology to ensure food and nutrition security and to feed the world; health, building on its strong pharmaceutical base and medical expertise accumulated from dedicated training institutions under policies implemented since the 1970s; and manufacturing technologies. India has an engaged diaspora across the world, which wields significant influence in various international organizations and governments including the United States. According to the Declaration of the Second Africa-India Summit, the shared vision of Africa and India is to achieve self-reliance and inclusive development. It highlights India’s and Africa’s key objectives in the engagement. The engagement has high ambitions, covering agreed areas of cooperation as well as highlighting key international issues and forums where joint positions will be pursued, notably UN reforms, multilateral trade negotiations, climate change negotiations, reform of the international financial architecture, and peace and security. It is notable that the Indian Navy is assisting in fighting piracy on the waters of the Indian Ocean well into the neighborhood of coastal and island COMESA member states. Likewise, India expects support from Africa in other strategic areas. India’s short- to medium-term global priority is to double its global merchandise exports, including those going to COMESA, within three years. To this end, India approached COMESA seeking a trade agreement and proposed that the agreement should cover liberalization of trade in goods and services and investment regimes, as well as government procurement and intellectual property. These five areas constitute the core avenues of market access in international trade and economic relations. In the history of international trade relations, trade in goods is widely accepted, but the rest are controversial. Developing countries on the whole have had serious reservations about opening up government procurement, and they have only agreed to services and intellectual property under carefully balanced agreements that ensure that they have adequate policy space. Investment has been addressed under autonomous national regimes, but generally binding international rules have usually been rejected when proposed. At the WTO, India has led the opposition to bringing investment and government procurement under binding WTO rules. COMESA brings considerable development potential to its engagement with India. The mining sector, for instance, has constituted only 14% of this 150

growth, whereas 53% comes from services, especially telecommunications and banking—the areas most closely related to India’s goal of becoming a global technology superpower.299 As the new growth pole of the global economic system, Africa now enjoys a degree of leverage that it can bring to bear in relations with the rest of the world. COMESA’s Council of Ministers set out a number of general principles for governing engagement with India after considering the report from the COMESA-India joint meeting in July 2012. First, caution is needed to ensure that the arrangement is mutually beneficial. Second, consistency is necessary across the range of agreements and relations with third-party countries to ensure that COMESA remains a solid and coherent bloc that effectively pursues its regional integration programs. Third, the relation with India should be based on clearly identified priorities and benefits for COMESA, on the basis of comprehensive analytical work including a Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis. Fourth, all COMESA member states should participate in the preparations and the negotiations, which should be undertaken on the basis of common positions. The report also proposed several specific principles that member states should follow. First, any engagement should meet COMESA’s development and integration objectives. The engagement should use the areas of cooperation set out in the MoU between COMESA and India as a basis for negotiation. Second, no engagement should disrupt the regional integration agenda. Third, COMESA must be transparent and inclusive in its preparations for engagement, involving all member states and noting common positions. Finally, before an engagement is concluded, a report must analyze the feasibility of the proposed engagement and provide recommendations. Other principles were also proposed, such as accounting for different levels of development of COMESA member states vs. India, and numerous specific trade measures such as special and differential treatment, variable geometry, sequencing on the basis of timeframes, transparency, reciprocity, MFN and national treatment, early harvest, priority investment areas, standards, safeguard measures, and impact on regional integration. Together, these principles call for preeminence of the regional integration programs of COMESA as the basis for engaging third-party countries and ensuring that any such relations are considered on the basis of demonstrable and tangible benefits for COMESA. Additional principles could include the following: predictability, sustainability, legal certainty, compatibility with international rules, and consistency with international trends. These principles basically require compatibility of the arrangement with rules of the World Trade Organization Agreement governing regional trade agreements. Regarding goods, these rules include GATT Article 24 and the Enabling Clause. Article 24 requires elimination 151

of duties and other restrictive regulations of commerce on essentially all trade, sometimes taken to mean about 90% of the tariff lines; whereas the Enabling Clause, which governs preferential trade arrangements among emerging countries, is considered more flexible. India and COMESA have enjoyed good relations over the years, built on geographical proximity and history, and more recently on increasing trade and investment. In 2003, a memorandum of understanding was signed between India and COMESA covering the following areas: pharmaceutical products, information technology, agriculture, biotechnology ensuring of food security, human resource development (provision of technical training facilities, development of professional courses and curricula), housing (including provision of low-cost housing units by the use of local available materials), tourism, industry (including SMEs development), energy, infrastructure (railways, roads, ports), and promotion of cooperation between the Chamber of Commerce of India and COMESA Business Council. The COMESA region has been an increasingly attractive location for Indian foreign investment, but again, the question is whether African producers are able to take advantage of economies of scale that could arise from access to a market as large as India. That said, the COMESA region can take advantage of the fact that over the coming decades, India will face two great challenges: mitigating climate change and securing a stable energy source. India relies on imported oil, and its rapidly growing economy (expected to average a 9-10% annual increase), will lead to a significant increase in energy demand. This may force India to diversify to alternative sources of energy. As a result, COMESA can export more of its oil and copper ore, which are abundant in many member states. Furthermore, India continues to import large amounts of agriculture goods such as pulses and edible oils, which are consumed by the vast majority of its population. They are relatively easy to grow and the climate in the COMESA region is favorable for the cultivation of these crops. In response to its persistent negative trade balances with the rest of the world, India developed a strategy to double its exports over three years (beginning in 2011). Its major export-driving commodities will be electrical and engineering goods, plastic and linoleum products, iron and steel, automotive components, petroleum products, pharmaceutical products, machinery and instruments, transport equipment, textiles and cotton fabrics, and rubber. Broadly speaking, the range of goods that COMESA can supply to India (including aluminum, copper, mineral fuel, metalliferous ores and slag, coffee, resins, nuts, spices and sugar, leather, organic and inorganic chemicals, and marine products) may be limited in scope because India is now pursuing import substitution to minimize its balance of trade deficits. This is the main explanation of India’s impetus to seek a Free Trade Area arrangement with COMESA.


The balance of trade has been in India’s favor, although there was a sharp increase in COMESA exports from 2006 onward due to the revival of India importing oil from African countries. (Between 1999 and 2005, India preferred to import oil from non-African suppliers.) Oil is produced by three COMESA member states (Egypt, Libya, and Sudan), and it accounts for more than 60% of total COMESA exports to India. The five major countries in the COMESA region that trade with India are Egypt, Libya, Kenya, Mauritius, and Sudan. The majority of COMESA member states’ economies are largely agrarian, and trade with India in engineering goods can provide the COMESA region with access to relatively cheaper inputs for agricultural purposes. India wants to expand domestic production of its export-driving goods such as tractors, combine harvesters, and other agricultural machinery, while the COMESA region may be interested in importing agricultural machinery. Having widespread mechanized agricultural practices in the COMESA region will enhance productivity and efficiency by taking advantage of the region’s extensive arable land. Development of the COMESA region’s economies is dependent on the availability of infrastructure and technologies. These engineering goods can be used to improve the efficiency of most industries in the region as well as agriculture. According to a study by the Export and Import Bank of India, India’s total trade with COMESA rose more than threefold (from US$2.55 billion in 2004-05 to US$8.48 billion in 2009-10), accounting for 38.2% of India’s total exports to Africa, while India’s total imports from the region stood at 13.1%. This suggests that COMESA was in substantial deficit in favor of India to the tune of US$1.8 billion in 2009-10 alone. India’s exports to the COMESA region broadly included electrical and electronic goods, plastics, articles of iron and steel, automotive components, petroleum products, pharmaceutical products, machinery and instruments, and cotton fabrics. On the other hand, India’s imports from COMESA region were broadly listed as aluminum, copper, mineral fuel, coffee, resins, nuts, spices, sugar, leather, organic and inorganic chemicals and marine products. The study also recommended broad areas of further cooperation in agricultural and natural resource development and energy, besides recommending the broadening of further linkages with trade and investment promotion institutions. The evidence shows that COMESA’s top exports to India from 2007 have been dominated by fuels, followed by manufactures, ores and minerals, agricultural raw materials, and food items. The pattern of the flow of exports from 2007 also shows that the region’s exports of food items, ores, and metal products have tended to grow faster relative to other exports over the years. COMESA exports have varied depending on its member countries’ respective product endowments and competitiveness. For instance, Egypt and Libya have mainly exported fuels, ores, and metals, while Madagascar, Malawi, and 153

Uganda mainly export food to India. Ethiopia, Kenya, Mauritius, Zambia, and Zimbabwe mainly export manufactures. In all cases, however, the countries altogether export ores and minerals as well as food items to India. The pattern of COMESA’s imports from India demonstrates a concentration mainly in manufactures, followed by fuels and food items. These imports increased steadily between 2007 and 2011. For instance, Burundi, Ethiopia, Malawi, Rwanda, Sudan, Swaziland, Zambia, and Zimbabwe largely import manufactures, while the others have a mix of manufactures and food products, except Mauritius, whose largest imports from India constitute fuel products. Africa has emerged as an important investment partner to India in recent years, with the bulk of Indian investments directed to the services and manufacturing sectors, as well as to mineral resources, including the oil sector.300 The synergy that exists between India and the COMESA region points to robust trends in bilateral trade and investment relations observed in recent years. India today is the world’s 21st largest outward investor. Severe Indian domestic competition and the growth of Indian corporations have increasingly triggered larger, strategic asset-seeking, cross-border mergers and acquisitions in several sectors including automotive, telecommunications, and metal. India’s outflows of investment into the COMESA region grew substantially during the period 2000-2009, with much of the investments flowing to five member states: Egypt, Kenya, Libya, Mauritius, and Sudan. Direct investments in joint ventures and wholly owned subsidiaries in the COMESA region amounted to US$5.2 billion, accounting for well over 10% of India’s total global overseas investments. Among the major destinations that attracted India’s investments include Mauritius (the dominant recipient), Egypt, Ethiopia, Kenya, Libya, Madagascar, Malawi, Rwanda, Sudan, Swaziland, Uganda, and Zambia. Small and medium enterprises (SMEs) became an important policy focus for COMESA’s work given Africa’s stage of industrial development. SMEs constitute about 90% of the private sector of the member states. SMEs provide significant employment in member states, especially among vulnerable sectors of society, and they are crucial players in eradicating poverty and creating wealth. The prevalence of SMEs in COMESA economies and the promise they hold for promoting the attainment of key public policy objectives mean that SMEs will be beneficiaries of the major areas of cooperation between COMESA and India. The development of SMEs is therefore an important priority in COMESA. COMESA has prioritized the textiles and clothing, footwear, and agrofood products clusters, in which regional value chains will be created and interventions developed to assist diversification and value addition. Activities have already been undertaken to profile the clusters, and pilot projects are running in several member states. Management training and skills development courses have been offered. The PTA Bank is expected to develop innovative


financing lines for SMEs to address the critical challenge of lack of adequate and affordable credit facilities for SMEs. India has a strong policy regime on SMEs. This can be a source of experiencesharing and partnerships with member states, as well as joint ventures in the private sector to address challenges to developing SMEs in COMESA. Engagement with India that covers SMEs could support implementing the COMESA theme on SME development to generate some concrete results. The main challenges member states face in developing their SME sector include the following: inadequate credit facilities for SMEs, resulting in low levels of capitalization or lack of trade finance; poor management and business skills, leading to high mortality rates; poor quality products that may not be competitive; low levels of technology and innovation; information gaps regarding inputs and markets; inadequate access to regional and global markets; nontariff barriers in export markets; and inappropriate policy and legal regimes on SMEs. These challenges can be addressed through direct interventions, which can be improved through learning from the Indian experience and through twinning programs. Such programs could focus on twinning up local government authorities, civil society organizations, microfinance institutions, and other grass-root level institutions with Indian counterparts. Linking up SMEs with retail outlets in India could directly address market access constraints; and if accompanied with mentoring and hands-on capacity building, it could address the capacity of SMEs to meet market requirements and other regulatory requirements in export markets. Above all, effective preferential market access for SME products through a duty-free-tariff-preference (DFTP) regime, for example, can provide a much-needed advantage to COMESA’s prioritized clusters of textile and clothing, footwear, and agro-food products. Such products could be considered for preferential market access in partners’ export markets when supply constraints are addressed. There are also SME clusters in the fields of computer programming, research and innovation, and light manufacturing. Opening up markets for goods has been comparably more straightforward and acceptable than opening up markets for services. International practice clearly shows this distinction in approaches on goods and on services. Opening up markets for goods has tended to take a negative list approach—all goods are covered except those that are excluded; while opening up markets for services has tended to take a positive list approach—all services sectors are excluded except those that are explicitly specified as opened up, and they are only opened up according to set terms and conditions. The two exceptions to this approach are NAFTA and common markets where free movement of services is incorporated. Recognizing the importance of services, COMESA initiated a regional services liberalization program. It is important to highlight that the program 155

takes a positive list approach, and covers four sectors initially: communication, transport, finance, and tourism, with professional services, construction and energy services to be negotiated subsequently. It can only be politically appropriate that any services agreement with India should also be based on a positive list approach and that COMESA should not liberalize more sectors than those it selected to start the regional liberalization program. It would be welcome if India would open up more sectors to services exports from COMESA, especially given the strength of India’s economy, which can absorb exports in a range of sectors that can support its strong manufacturing base. Professionals from COMESA, for instance, could support the manufacturing sector of India through their services. Indian investment in COMESA will likely occur in the manufacturing and services sectors as well as in extractive industries. Regarding investment in the services sectors, infrastructure should be prioritized, particularly information and communication technologies, along with networks and sensors, transport, financial services, and tourism. COMESA offers critical location advantages for India’s investment through its programs and has progressively improved the political, economic, and social conditions in the region. The peace and security program, in collaboration with the African Union and other RECs, has supported the improvement of democracy and good governance in the region.301 The macroeconomic convergence criteria have provided benchmarks for macroeconomic stability. Massive education programs have generated a young, skilled, and ambitious workforce (professionals, entrepreneurs, and innovators) across the region. Member states have all prioritized infrastructure development, and various Tripartite programs on corridor development are ongoing. Road and rail networks, water transport, and air travel have improved over the years. Interventions to improve competitiveness have resulted in stronger banking sectors, tax reforms, energy reforms, and wider availability of internet and telephone services. Important partners such as the EU, United States, Japan, Canada, and China have launched preferential market access regimes from which most COMESA member states benefit. But above all, COMESA programs have produced a vibrant Free Trade Area in which intra-COMESA trade continues to boom. This is beneficial for Indian investment in COMESA. However, COMESA will need to develop an investment regime that maximizes benefits accruing to the region, including employment generation, skills transfer, environment protection, welfare and decent treatment of workers, and corporate social responsibility.


6.4 Trade relations with the United States Trade relations between Africa and the US show how misalignment of interests and institutional arrangements resulted in limited benefits, as illustrated by the case of the Africa Growth and Opportunity Act (AGOA). The Act was passed in 2000 and will expire in the year 2025 following a ten-year extension in June 2015, after which indications are that the US will seek free trade area agreements or reciprocal market access arrangements with African countries. This means that African countries will be required to reduce or eliminate duties on imports from the US and possibly agree to obligations in investment, competition policy, government procurement, and financial markets. AGOA aims to promote economic development in Sub-Saharan Africa (SSA) through providing eligible African countries with preferential market access to the US$3 trillion American market. The foreign assistance measure, enacted as a tax exemption instrument as opposed to a multilateral agreement, allowed most of SSA exports to enter the US duty-free. This was expected to bolster the region’s exporting and manufacturing sectors, as well as entrepreneurship, and hopefully jumpstart economic growth and create jobs. This separation of Africa into Sub-Saharan Africa and North Africa, then attaching North Africa to the Middle East has, over the years, raised political concerns in Africa as being divisive and inconsistent with the continent’s regional integration aspirations. It means, for instance, that Egypt and Libya— who are full members of COMESA—are excluded from AGOA upfront. In July 2017, 38 out of 55 African countries were eligible for AGOA, of which the top exporters were South Africa, Nigeria, Angola, Chad, and Kenya. Total exports to the US under AGOA in 2001 were estimated at US$8.2 billion, reached US$66.3 billion in 2008, and fell to US$9.3 billion in 2015. The sharp drop could be attributed to the US financial crisis and ensuing recession after 2008, as well as the fall in oil prices during that period to as low as US$35 a barrel. Non-oil exports rose from US$1.4 billion in 2001 to US$4.1 billion in 2015, comprising mainly automobiles, apparel, fruits, cocoa, vegetables, footwear, and cut flowers. In terms of ranking as an export market, Africa exports more to the EU, China, and other African countries than to the US. AGOA eligibility is based on criteria set out in the Act and can be reviewed annually by the US president. The criteria include: protection of human and workers’ rights, elimination of child labor, being and remaining a market-based economy, maintaining the rule of law and political pluralism, elimination of barriers to US trade and investment, protection of intellectual property rights, combating of corruption, and putting in place and implementing policies to reduce poverty and promote health care as well as educational opportunities. Eligibility can be lost on any of these grounds, especially putting in place policies the US considers inimical to its interests or inconsistent with certain standards of good governance, including democracy and rule of law as well as protection 157

of intellectual property and labor rights. A number of African countries have lost eligibility due to unconstitutional change of government (i.e., Madagascar in 2010) or inadequate protection of labor rights (i.e., Swaziland in 2015). Like all such initiatives which give priority to opening up markets, AGOA is big on promises and potential, but a lot remains to be done towards achieving its market access objectives for Africa. Without equally prioritizing the building of technological, financial, and industrial capabilities to produce and export high technology content and high value products, as a process of accelerated industrialization, the markets remain largely unutilized and, therefore, hardly contribute in practical terms of increasing beneficiary countries’ exports. Moreover, over 90% of exports under AGOA have been oil and fuels, leaving the other 10% to a few active users such as South Africa’s exports of automobiles (Mercedes and BMW cars), and Mauritius’s textile exports. In June 2017, the US announced that it would review the eligibility of four of the five East African countries for AGOA. This was triggered by the new policy adopted by the EAC presidents banning importation of second-hand clothes. The objective of the ban was to promote industrialization in the textile and apparel sectors in East Africa by recreating a market that had hitherto been swamped with second-hand clothes imported from diverse sources around the world. Kenya moved fast when it got wind of the impending review by hiring a US-based public relations firm, at a cost indicated by some sources at US$3 million, to lobby the US government, because Kenya stood to lose US$350 million worth of exports annually if it were declared ineligible. The US government’s announcement of the review indicated that Kenya would be excluded. The other four countries, upon hearing the announcement, acted quickly to prepare for a public hearing scheduled for July 13, 2017. Through the EAC video conference facility, high-level consultative and planning meetings were held. In the case of Uganda, President Yoweri Museveni took charge of the matter, requiring that it be discussed urgently by the cabinet. The trade ministry prepared a cabinet memo overnight and fast-tracked it through the bureaucratic procedures. The cabinet’s secretariat was chafed at this and had removed the paper from the cabinet meeting’s agenda. To their dismay, though, the president demanded to start with that paper as the meeting’s first agenda item. In this manner, coordinated representations were made by the East African countries to the US embassies and to Washington. What this example shows, though, is how insensitive the AGOA can be to the industrialization impetus in beneficiary countries. When Madagascar lost its eligibility in 2013, the value chains around the exportation of textiles under AGOA suffered immediately and dramatically, impacting neighboring Mauritius. COMESA discussed this matter in the context of the regional dimension of decimating established value chains and, together with SADC and the AU, worked to organize elections in the country and restore democracy. 158

Therefore, there has been quite some discomfort about the uncertainty or unpredictability of AGOA, by African governments and private sectors alike. The extension of AGOA to 2025 in part addressed this uncertainty by providing an extended period of ten years that could allow forward planning of exports. However, the fact that eligibility can be lost at the stroke of the US president’s pen remained a challenge. This uncertainty relates as well to initiatives by the US government that have eroded the AGOA preferences. Granting similar preferential access to more competitive non-African countries, though based on considerations of levels of development, has resulted in African loss of market share in the US market. This goes back to the period 2005 to 2010, when Africa’s exports fell by 52% following the expiry of the Multi-Fibre Agreement. This expiry lifted quota restrictions on a number of Asian countries, which increased exports into the US from China, Vietnam, Bangladesh, and Cambodia. More uncertainty then set in when it remained unclear whether the US would extend AGOA, which was then due to expire. A study of the impact of AGOA shows “that receiving AGOA status has a strong positive and significant impact on overall trade with the US. Interestingly, however, the analysis also shows a disproportionate impact of crude oil imports from the oil-producing countries of Angola, Gabon, and Nigeria, which is clearly not the intent of the Act.”302 This outcome tends to reinforce the traditional commodity-based patterns of US-Africa trade. This is not unique to the US. The difference, however, is that the promise of manufacturing exports did not take into account the need to build industrial and trading capacity on the African side, so the countries could incrementally benefit from the Act. It is notable that while African countries were seeking long-term and predictable trading relations, AGOA fell short of this expectation despite evidence of diversification in the apparel sector. 303 The Act was subject to periodic review and reauthorization, which created investment uncertainty on the African side. Investing in manufacturing capacity to export to the US required African entrepreneurs to make long-term commitments. But such commitments were negated by the threat of AGOA expiring. This challenge was compounded by the fact that AGOA was pegged on US tax law and therefore subject to differences in political views. Critics of AGOA on the US side questioned its benefits to the country, for instance concerns raised by the Trump Administration which viewed it as form of foreign assistance to Africa. The US responded to the criticisms by seeking to shift the Act from being preferential to becoming reciprocal. This was achieved through its renegotiation and subsequent reauthorization in 2015 by the Obama Administration as the Extension and Enhancement of the AGOA Act. 304 On the whole, AGOA offered Africa the opportunity to explore how to increase its trade participation in the global economy. However, the idea of preferential arrangement, lack of manufacturing capacity, and uncertainty in continuity did not align with 159

Africa’s nascent industrial status and long-term integration aspirations. The rise of economic nationalism in the US will continue to put pressure on the arrangement in ways that might further reduce its viability. 6.5 Africa’s relations with China The emerging relationship between Africa and China represents an important step in the continent’s articulation of agency through its catalytic institutions such as the AU and the RECs.305 The exercise of agency involves complex relationships.306Africa’s exercise of agency is not uniform, as demonstrated by the case of investment in uranium in Niger and Namibia.307A large part of the differences can be accounted for by state capacity. But on the whole, Africa’s relations with China reflect the continent’s growing ability to advance its interests in line with the pan-African vision of self-sufficiency and overall development. The case of China shows a transition from trade to investment. Much of this has been driven by convergence of interest between Africa and China, a phenomenon that has been largely missing in relations with the EU or India. The convergence of interests between Africa and China has been shaped by the global marginalization of Africa.308 Timing played a key factor. As Berhe notes, “China’s opening up and re-discovery of Africa coincided with Africa’s deteriorating economic performance as a result of conflicts, mismanagement, as well as structural adjustment policies. China brought a viable alternative of social, political, and economic development formula to the uni-polar world of the 1990s. Frustrated by complex donor policies and the high overhead costs of multilateral development projects, African governments continue to appreciate the alternative presented by China in an increasingly multipolar world.”309 China’s trade relations and overall diplomatic engagement with Africa has been a highly debated topic in international diplomacy.310 One of the most common arguments has been equating China’s involvement in Africa with colonialism.311 Much of the reliance on colonial metaphors is largely a result of poor understanding of the differences between Afro-Chinese cooperation and Western relationships.312 They are an expression of the mindsets of those using them more than a reflection of the realities of Afro-Chinese cooperation. The intensity has been amplified by the rapid rate and sheer scale of trade cooperation between Africa and China.313 In 2009, China overtook the US as Africa’s largest trading partner. Much of this growth in cooperation has been done through the structure of the Forum on China-Africa Cooperation (FOCAC). The forum has created the political and diplomatic mechanisms through which agency relations between the two are transacted. “China has consistently doubled its financing commitment to Africa during the past three FOCAC meetings—from US$5 billion in 2006 to US$10 billion in 2009 and US$20 billion in 2012. Half of the US$20 billion committed in 2012 had been disbursed by the end of 2013, 160

leading to China increasing the credit line by another US$10 billion in 2014.”314 Equally dramatic has been China’s trade cooperation with Africa. In 1980, Afro-Chinese trade volume stood at US$1 billion. In 2000, it rose to US$10 billion. By 2010, China surpassed the United States as Africa’s largest trading partner with a total volume of US$114 billion. In 2012, the total China-Africa trade volume reached US$198.49 billion, an annual growth of 19.3%. Of this, China’s export to Africa accounted for US$85.319 billion while Africa’s export was US$113.171 billion.315 By 2013, trade between the two stood at over U$S210 billion. For every US$100 worth of goods Africa exported in 2013, about US$20 of them were sold to China. The figure was only US$3 in 2000. China’s foreign direct investment (FDI) in Africa was US$25 billion in 2013 and Africa’s FDI in China was US$15 billion. The fact that Africa is investing in China received little attention partly because of the focus on China as the principal player in the agency relations between the two actors. African investment in China is also linked to the increase of Africans living in China. It is estimated that there are up to 200,000 Africans living in Guangzhou alone. This figure excludes the rapidly expanding number of African students in China, with the projected allocation of 18,000 full scholarships between 2013 and 2018.316 The first area of convergence relates to foreign policy objectives. China’s engagement with Africa goes back to the early 1960s at the height of Africa’s liberation movements.317 Its original foreign policy was guided by five principles covering sovereignty, non-aggression, non-interference in each other’s internal matters, mutual benefit, and peaceful co-existence. The principles reflect China’s own history. These historical foreign policy objectives over time become part of China’s larger strategy of asserting itself as a global economic, political, and diplomatic force. This makes Africa an important sphere of strategic engagement.318 For example, the principle of non-interference is derived from experience with the former Soviet Union. China’s post-war reconstruction was based on extensive technical assistance and credit from the Soviet Union. The implementation of the First Five Year Plan adopted in 1950 owed its success largely to Soviet support. The existence of Soviet technical expertise, equipment, and joint state companies in fields such as energy, mining, transportation, and aviation brought with it considerable ideological influence.319 China’s economic policy’s divergence from the Soviet approach led to a split in 1960.320 One of the key lessons of the split was the close connections between technical assistance and ideological conditionality. China sought to maintain foreign policy consistency towards Africa in light of its rivalry with the Soviet Union.321 Seeking to impose conditions on Africa’s internal affairs would have been inconsistent with its stand regarding the Soviet Union prior to the split. This approach would later suit Africa, which had 161

historically been denied diplomatic space because of the conditions attached to foreign assistance from the West. Natural resources became a second area of convergence. China’s increased demand for natural resources took a turn at a time when Africa was seeking new outlets for its natural resources.322 China’s growing demand for Africa’s raw materials helped to bolster Africa as a source of valuable commodities for the global market.323 It provided the continent with the opportunity to help its economies to grow by building on its natural endowments.324 This period was marked by two key trends. Africa’s position in the global economy was being dramatically affected by fluctuations in commodity markets, substitute sourcing, and tariff escalation that prevented the continent from adding value to raw materials. Finding new markets that stabilized prices and guaranteed long-term export opportunities in China was therefore an important area of convergence and agency articulation. The third area of convergence related to trade is diplomatic engagement. The European Union, Africa’s major diplomatic partner, shifted its attention to Eastern Europe with the end of the Cold War. The first impact of the shift was in trade cooperation. For example, Africa’s share in the European Union’s foreign trade dropped from 3.2% in 1989 to about 1.3% in 2009. Much of this drop occurred with long-standing African partners such as the UK and France. The creation of the World Trade Organization also affected preferential trade cooperation between the Europe Union and its former African colonies. These shifts also affected Africa’s diplomatic engagement with its European partners. The entry of China as a diplomatic player gave Africa a chance to exercise its agency differently, especially given the fact that it had no colonial relations with the country.325 The timing of the cooperation with China created opportunities for Africa to articulate its interests and expand the scope of its influence on the international scene. But the same timing issue also raises important questions about the extent to which African states adequately exercised their agency function in the interest of their citizens. This is a question of great relevance to public policy. It is being asked of the relationship between Africa and the Western countries, especially in the context of the role of foreign assistance. It is an equally legitimate question to be raised in the case of relations with China.326 The cooperation started to take on a more significant economic function at a time when Africa was also undergoing significant international political change with the advent of multi-party politics as well as widespread reforms in national constitutions to widen liberties. Equally important has been the growing attention being given to governance, especially the impact of corruption on economic development.327 Understanding the role of China in Africa’s governance requires more detailed knowledge of yet another convergent factor: infrastructure. There is a deterministic view that democracy is a prerequisite for economic development. 162

This view is widely held and often with little consideration of the diverse ways by which national economies and political systems co-evolve. Much of the confusion arises from the failure to appreciate the critical role that investments in fundamentals, such as infrastructure, influence both economic transformation and democratic governance. Infrastructure development has been a major feature of the evolution of the Chinese economy.328 Research on regional growth differences in China showed that “transport facilities are a key differentiating factor in explaining the growth gap and pointed to the role of telecommunication in reducing the burden of isolation.”329 The investments were a shift from earlier efforts to socialize production through agrarian revolution. The focus on infrastructure entailed significant investment in creating engineering capacity as well as engineeringoriented state-owned enterprises (SOEs). This capacity would later become important in China’s relations with Africa, as the continent started to realize the importance of infrastructure in economic transformation.330 Unlike other regions of the world that made their major infrastructure investment earlier, China has standing capacity, which it is deploying at short notice to respond to Africa’s needs. At face value, China’s infrastructure investments evoke the specter of 19th century British and German investments designed to serve colonial interests. However, China’s presence is supplemented by a diversity of other investors including “states, multinational corporations, and regional development funds. The broader market economic system in which China and Africa engage today entails that Chinese unfettered access to projects is complicated by the interests of multiple stakeholders. The Chinese presence has been exaggerated at the expense of other actors and thus, in any future conflict, it cannot be assumed that China will be able to mobilise this infrastructure in its interests.”331 One of the most important features of contemporary international relations is the extent to which African countries are increasingly looking to China as an inspirational role model for their economic programs.332 This is not just because China itself has only recently emerged as a major player on the global industrial and technological scene. Part of its recent history includes important lessons that resonate with Africa’s own bid to leverage its natural resources for industrial development. In fact, some of the features of Africa’s relations with China mirror previous cooperation between China and Japan. The rise of China as an industrial power owes a great deal of its success to Japan as a source of technology at a critical moment. Following the Sino-Soviet split, Japan emerged as a source of technology in the early 1960s. By the 1970s, Japan accounted for nearly 70% of China’s technological imports. The imports also included strategic know-how as well as management practices. In a way, Japan served as an industrial role model for China at a time when the country was isolated from much of the world. 163

Technology cooperation between China and Japan was characterized by at least four features. First, the two countries developed a supplier-buyer relationship at a time when the US and European countries were reluctant to sell technology to China for ideological reasons. Second, the trade concentrated on complete plant transfers with Japan helping China to build large industrial systems. Examples include the Baoshan Iron and Steel Complex in Shanghai, the Qilu Petrochemical Complex in Sandong province, and the Daqing Petrochemical Complex in Heilongjiang province. Third, much of the technology was for civilian use despite the fact some of it may have had dual purposes. With the building up of local technological capacity, China was able to transition from importing whole plants to acquiring technology through licensing. This cooperation also signaled the existence of a large technology market in China that played a part in improved Sino-US relations in the late 1970s. African countries have in recent years entered into resource-for-infrastructure swaps with China. The swaps offer access to low-cost, large-scale financing for infrastructure development at times when governments are faced with a large infrastructure gap and limited availability of external finance. Infrastructure improvements will lower the cost of doing business and, in turn, will improve international competitiveness. There are risks related to the quality and pricing of infrastructure projects, but research shows that these risks have and can be managed.”333 Infrastructure investments are not sufficient to trigger sustained economic development unless they are accompanied by complementary strategies that leverage their potential. This requires long-term commitment to development objectives and consistency in their implementation. Nigeria, for example, tried to leverage its natural resources to secure support for infrastructure projects. Under President Olusegun Obasanjo, Nigeria and China signed oilfor-infrastructure agreements despite China’s initial hesitation to enter such arrangements. When President Obasanjo left office, his successor, Umaru Musa Yar’Ardua, suspended the deal and replaced it with oil-for-cash arrangements. The termination of the arrangement exposed the “incompatibility between this model and the Nigerian electoral cycle, which is designed to alternate every ten years between northern Muslims and southern Christian elites.”334 The case of Nigeria is a glimpse into how political systems and cultures can undermine the ability of a country to exercise diplomatic agency in ways that could be beneficial in the long run. This is particularly the case when strategic infrastructure investments are needed to build foundations for long-term development. The issue is often whether a state has the capacity to distribute the means of long-term development, such as infrastructure and higher technical education, or whether the focus is on meeting short-term revenuesharing arrangements. On the whole, the effectiveness of the arrangements will, 164

in the long run, depend on the extent to which African countries are able to exercise greater influence over factors such as local content, labor practices, debt management, and environmental impacts. Such an infrastructure market size provides a major opportunity for Africa to exercise its diplomatic agency not only with China but also with the rest of the world. The potential for diplomatic influence goes beyond the construction of transportation, energy, telecommunications, and other related public works projects. It involves training people to design, build, and maintain the infrastructure. One possible way to ramp up the needed capacity would be to create free education zones along the lines of export processing zones (EPZs) that would attract technical universities from around the world to locate their campuses in Africa. Similarly, such a large market will hardly work efficiently without upgrading Africa’s manufacturing capabilities. This would require creating competence in key fields such as product design and manufacturing. Doing so would require long-term focus on industrial development in Africa that would mirror China’s recent economic history. This would come with considerable demand for policy discipline that has not been seen in the past. It is notable that China is shifting its focus from trade to investment in response to the policy aspirations of host countries. Evidence from Ghana showed a steady increase in the shift from trade to investment: “Small and large manufacturing projects can be found in different sectors, from plastic, and steel to pharmaceuticals and others. All the manufacturing investments target the local and regional market, either taking advantage of local raw materials or seeing opportunities in the market of little competition.”335 Furthermore: “Chinese firms have local suppliers of simple raw materials, but the industrial supplies are all imported from abroad. Learning from Chinese business models, a few local businessmen start their own manufacturing projects, mostly in the sector of plastic recycling, but lack of capital appeared to be the main obstacle keeping local players from moving up the value chain.”336 Evidence of technology transfer and learning is also emerging in Nigeria.337 These efforts are building extensive collaboration between China and Africa in building industrial parks. The cooperation is based on China’s own history of using special economic zones (SEZs) as vectors of industrial transformation. Africa’s own history of SEZs has showed little impact on employment creation or prosperity improvement. However, the zones are enjoying a new phase of revival using lessons learned from China. “In part due to the cooperation between African countries and China, SEZs are currently experiencing a renaissance in a number of African countries. Promising developments can be found in Ethiopia, Nigeria and Zambia, where some SEZs have unleashed broad interest of international investors in the respective country’s economy.”338 It is notable that China’s involvement in SEZs in Africa covers a wide range of 165

countries, most of which are not important exporters of raw materials. An important opportunity for Africa to exercise agency in industrial development lies in the nature of its FDI in China, which covers technologyintensive fields such as “petrochemical engineering, machinery and electronics, transportation and telecommunications, light industry and household appliances, garments and textiles, bio-pharmaceuticals, agricultural development, entertainment and catering.”339 Africans investing in China could become important sources of industrial development in Africa by starting to transfer technology and know-how to Africa. Such new investment flows would also help strengthen Afro-Chinese industrial cooperation, as it would involve investors from both sides. The case of Afro-Chinese cooperation is a significant departure from the trade relations with the EU. This is mainly because Africa had the opportunity to reflect its emerging vision for economic development in new relations with China. These relations reflect Africa’s regional integration priorities, such as infrastructure development, industrialization, and the overall use of trade as a vehicle for economic transformation. This was made possible because of the convergence of interests regarding diplomacy, natural resources, trade, and industrial development. China’s own experiences as an emerging economy have offered Africa a variety of contemporary lessons on how it could shape its own transformation. It is notable that Afro-Indian relations did not advance as expected despite similarities in their economic circumstances. Part of the challenge has been the lack of congruence in vision between the two. These examples illustrate the growing stature of Africa as a global player. This change is a reflection of enhancement in state capacity as well as the adherence to the continent’s development vision as articulated through the AU. It is also an indication of the positive impact of interactions between national and regional institutions in international engagement. 6.6 Conclusion Africa’s efforts to define trade as part of its larger effort in development became a central theme in its multilateral and bilateral trade relations. This focus was not always in line with the expectations of its trading partners. The EU, for example, tried to accommodate Africa’s needs through the EPAs. It promoted trade as well as development assistance. But Africa’s long-term interests seemed to focus more on expanding trade relations more broadly. Development assistance was considered as part of the cooperation but not a central part of the relations. At the center of Africa’s concern was how the relations affected its interest in industrial development. COMESA attempted to address these issues through new trade partnerships with India, which also emphasize the role of SMEs as an entry point for industrial development. 166

Negotiations with traditional partners will be tough, as they try extending the status quo that secures them a privileged position in Africa, even if contrary to the new impetus for social-economic transformation through regional integration and regional value chains. The strength of Africa, projected through regional bodies and common positions, can be deployed effectively if it is backed by analytical work, is evidence-based, and if it catalyzes support from key power centers and actors around the world. New partnerships, represented by China and India, must equally be examined and structured to deliver mutual benefits. On the whole, the scourge of colonialism provides a point of departure for engaging new partners, along new pathways into a future that is full of creative possibilities. The paths travelled by new partners such as China and India provide lessons that can infuse the engagement with Africa, while ensuring that African developmental objectives and programs are always advanced in mutually beneficial outcomes. Successful partnerships require adequate negotiation capacity and diplomatic skills on the part of Africa. The capacity should entail technical expertise on the priorities—especially the overarching goal of social-economic transformation through regional economic integration—the regional value chains, and the minds-not-mines trajectory into the future.





Having set out the long-term vision and roadmap in part I for the progressive establishment of the African Economic Community using regional bodies as building blocs and having explained how pan-Africanism was the ethos for regional integration in Africa, part II delved into the experimentation and learning at the regional level. It explained how programs for economic integration actually took off in various parts of Africa, through identifying entry points representing the actual critical challenges on the ground at the time and addressing them as a pre-requisite for implementing and making progress on the whole regional integration agenda. Progress was made, though the experimentation and learning were understandably slow and quite painful. The economic integration perspective increasingly became the point of reference in engaging partners, both traditional and new, though there remained room for improvement in terms of better articulation of Africa’s common priorities in the negotiated outcomes and frameworks. Engagements with partners vividly represented the creative search for new pathways away from the chaos and disequilibrium of the old order and were therefore expected to require creativity, institutional engineering, and innovation. As such, they carried along lessons learnt and sharpened the required diplomatic, technical, and organizational skills. Part III now turns to consolidation at the continental level, which harvested the progress achieved and the lessons learnt from regional experimentation. Starting with entry points—on which work continued into more effective instruments and programs—and diversifying into a whole range of complementary or core integration programs with increasing complexity, regional bodies started to engage each other in order to promote inter-regional convergence and coordination. The overall continental framework provided by the OAU and the African Union provided a forum for cross-learning and devising new approaches and programs to be implemented by the regional bodies all over Africa. This represented increasing consolidation of regional integration at the continental level. Part III addresses inter-regional convergence, which achieved a landmark step in June 2011 when COMESA, EAC, and SADC decided to negotiate and, in June 2015, concluded the Tripartite Free Trade Area Agreement embodying the developmental approach to economic integration anchored on market access, infrastructure, and industrial development. That landmark 170

step raised expectations and left strategists fainting with excitement at the prospect of replication at the continental level. A decision to negotiate the African Continental FTA (AFTA) was made in 2012 by the African Union, and negotiations subsequently launched in 2015 just five days after the Tripartite FTA was launched; and in March 2018 the Agreement was signed and the AFTA commenced. The pathway from decolonization, elaboration of the long-term vision and roadmap, regional experimentation and learning to eventual consolidation at the continental level (overseen by regional and continental institutions functioning as complex adaptive systems), shows a clear progression from chaos to order through an ever-continuing process of creativity, institutional engineering, and innovation. It was never meant to be an event; it remains a process. Development work tends to be painfully slow, and while poverty, unemployment, and overall social-economic transformation call for a sense of urgency, catalyzing the required change through the social-political processes is itself a challenge to contend with. Changing the mind-set to achieve the required critical tipping points for change—through capacity building and mobilization, covering entire populations—is critical. The book therefore ends with a concluding chapter on outlook.


7. The Tripartite Free Trade Area 7.1 Preparations for the Tripartite negotiations 7.2 The negotiation process 7.3 The text and scope of the agreements 7.4 Trade remedies 7.5 Conclusion Of the strategic entry points, the trade and investment regime appealed to a growing number of countries. Experience showed that three Regional Economic Communities—SADC, EAC, and COMESA—had convergent interests, activities, and standards.340 They also had common members, making the case for the creation of a free trade area covering the 27341 member countries feasible. The creation of a single market covering the three RECs offered great potential for economic expansion by allowing countries to trade with each other on better terms. But it also posed the risk of eroding local industries by exposing them to competing products. The negotiations therefore had to address both the future prospects for development arising from enlarged markets and the risks of deindustrialization from the process. 342 The negotiations for the Tripartite FTA lasted three and a half years. Though launched in June 2011 in Johannesburg, they started in earnest in December 2011 in Nairobi, Kenya, and ended in June 2015 in Sharm-el-Sheikh, Egypt, when the heads of state and government signed the Agreement establishing the Tripartite FTA and the Declaration Launching the Tripartite FTA. The Agreement was the legal instrument, while the Declaration was the political statement marking the milestone achieved and giving directions on the way forward. The years of negotiation were dramatic in many ways, especially in how they were undertaken, the learning that went into them as they evolved, setbacks resulting from the stances of one big reluctant country, and the role the secretariat played in facilitating the entire process. This chapter provides an overview of the negotiation process and issues. Then it highlights the link between the Tripartite FTA and the Continental FTA, indicating how the former inspired the latter. The Tripartite FTA paved the way 172

for the Continental FTA (AFTA) negotiations, a two-year process that was launched in June 2015 in South Africa and was at the time scheduled to finish by 2017. The AFTA was launched in March 2018. Next, this chapter details the preparatory work undertaken to launch the Tripartite negotiations and underscores the importance of adequate preparatory work before embarking upon a process as technical and demanding as regional integration negotiations. The chapter ends with a discussion of the trade remedies built into the trade agreement to address the risks of integration. This chapter is important because it documents a critical juncture in the history of Africa, namely, the negotiations that resulted in a Tripartite FTA covering 27 of the 55 African countries—about half the continent. 7.1 Preparations for the Tripartite negotiations Preparation of draft instruments Soon after the first Tripartite summit in October 2008, the three REC secretariats commissioned a consultancy study for the roadmap and the instruments to underpin the Tripartite FTA. The documents produced were found unsatisfactory. In recommending and adopting certain positions, such as the form of the instrument, the general approach, and key provisions, the study did not explore all the options available, nor did it provide an analysis of which option(s) would be best—on the legal instrument, institutional structure, or movement of business persons. For instance, there was no analysis of the various types of international agreements or the existing powers of the current Tripartite institutions or an analysis of why the bulk of the Tripartite communiqué could not simply be refined into an appropriate form of international agreement.343 On the legal framework, no case for the two annexes—the treaty and the agreement or protocol—was made, and the arguments advanced were equivocal. On the legal instrument establishing the single FTA, there could have been more emphasis on combining the existing FTAs with the obvious caveat that there would be trade remedies for adverse effects as well as adjustment measures. The issue then would have been how to assemble a minimum set of provisions drawn from the three or four FTAs that all the member states could agree upon. In addition, there should have been a clear indication of the nature and force of the instruments that existing Tripartite organs could make, followed by a decision as to whether or not such existing organs could issue relevant instruments establishing or supporting the implementation of such an FTA. For instance, the Tripartite Summit and the Council already had certain functions and powers as intergovernmental meetings and, as such, could provide a forum for certain decisions that would constitute international agreements. On the name, “CES” was based on the idea that the secretariats of the RECs would conclude the Tripartite FTA—a very dangerous approach. Some member 173

states could argue that the secretariats do not represent the people of the region and do not reflect the system of international accountability in interstate or intergovernmental relations, where states are the actors as embodied in governments represented by designated officials. The language of the draft instruments needed overhauling. The policy issues also needed to be thoroughly addressed before the legal provisions could even be considered. For instance, the services provisions didn’t build on existing regulations in the region and were mostly far weaker, because they envisaged a GATS level of opening up rather than a common market approach, the approach of priority sectors already adopted in SADC and COMESA, or the common market approach in the EAC. On the institutional structure, there were no details on the organs proposed— particularly the secretariat, which was already heavily criticized for being weak—and there was no apparent improvement in the proposed provisions. It was important, also, to locate the elaboration of the Tripartite institutions within the broader framework of the continental integration process. The alternative of a rotating presidency along the lines of the EU could be considered, but the study didn’t have adequate material on this, and this option would also require standing secretariats. There was no reasonable basis for the consultant’s report that the exercise on movement of business persons could not be undertaken. Existing regimes (such as certain visa relaxation measures) provide adequate material for analysis, and, in any case, recommendations could be made even without regionally existing practices. WTO proposals on GATS or business visas could also be helpful. The regimes in ECOWAS and elsewhere could also be informative and provide sources to draw on. Lastly, the study proceeded from some conceptually difficult premises. The discussion on the Lagos Plan of Action (LPA) and the African Economic Community (AEC) was largely inaccurate. There should have been a full account of the state of play on implementing the Tripartite decisions to see in which direction the region was headed and to learn some best practices so far. FTAs don’t govern relations with third-party countries, contrary to what the study suggested repeatedly. Instead, it should have indicated how the rules of origin could be more liberal than in the COMESA or EAC versions. The most important challenge of the FTA was definitely not compliance with WTO rules, and yet this was the position taken in the consultant’s study; more important challenges would include negotiation of rules of origin and tariff offers as well as implementation of the outcomes and, through training and market information, promoting utilization of trade and investment opportunities. Delays in ratification are real, but there are measures to assist the ratification process if ratification is the only way forward.


In light of this, the Tripartite Task Force (TTF), comprising the CEOs of the COMESA, EAC, and SADC secretariats, decided that selected officials from the three secretariats should form a working group to focus exclusively on the Tripartite for one month in seclusion. The group produced an explanatory report, a draft Tripartite FTA Agreement, and 14 annexes. The annexes covered the following areas: nontariff barriers, customs cooperation, transit procedures, trade facilitation, rules of origin, trade remedies, competition policy, movement of business persons, services, intellectual property, sanitary and phytosanitary measures, technical standards, trade development and competitiveness, and dispute settlement. In producing the draft instruments, the group decided to draw upon all the existing instruments of the three RECs and extract the best practices. For areas where new provisions were necessary, such as movement of business persons, the group drew on experiences in other free trade areas such as ECOWAS, NAFTA, the European Union, and the African Union. It turned out that the three RECs were already heavily drawing on each other, making it easier to draft the key provisions in the Tripartite FTA agreement. Once produced at the end of October 2009, the draft report and the draft instruments were considered by the Tripartite Task Force, which cleared them and presented them to each of the regional economic communities for consideration. The secretariats sent them out to all the Tripartite member states in November and December 2009. These documents became known as the November or the December 2009 version of the draft Tripartite instruments and were widely used by member states and the regional economic communities as well as by the private sector in the consultations they undertook for much of 2010. Consensus already began to emerge around these versions. The COMESA Summit of September 2010, held in Swaziland, decided that these documents should be the basis for the Tripartite FTA negotiations. The EAC Summit had already noted them by December 2009 and, together with the roadmap, used them in two one-week-long consultations in 2010. The umbrella business organizations of the three regional economic communities adopted the proposals for the rules of origin and welcomed the draft FTA instruments at a workshop in April 2010 held in Kampala. Member states that were visited by the secretariats welcomed the drafts and encouraged the secretariats to quickly advance towards holding the Second Tripartite Summit for launching the negotiations on the basis of the draft instruments. Country missions The three secretariats felt that country missions could be undertaken by a group of secretariat officials to get a sense of how member states had received the draft Tripartite instruments and what preparatory activities they were undertaking. The fear that member states might reject the draft instruments 175

foiled the timely commencement of the workshops and meetings of member states. Missions were therefore undertaken to ascertain the position and were a resounding success. The missions found overwhelming and unequivocal support for the Tripartite FTA. There were issues, however, that member states wanted to consider regarding process (missions should be done in a Tripartite manner), negotiations (more engagement among member states rather than a secretariat-driven process), and draft instruments (states wanted to contribute in producing proposals for draft text). The sense was that the process should move forward quickly while at the same time ensuring utmost participation to promote ownership. Despite the need to move forward, member states felt that national-level consultations were necessary. To promote ownership, an ad hoc Tripartite committee of member or partner states could advise and spearhead the Tripartite process—this would need a budget and secretarial backup. The Tripartite Task Force welcomed the report on the country missions at its meeting in April 2010 in Nairobi. The Task Force decided that the country missions would continue; a Tripartite committee of permanent secretaries would be convened to help promote member states’ ownership of the process and to address key issues. Any meetings of experts would follow the key thematic issues of the Tripartite according to the areas covered by the annexes, and national consultations on the draft documents and issues would be given technical and financial support. Related to this, the secretariat would organize private sector meetings at the Tripartite level to deal with key areas, particularly the rules of origin. Preparatory technical workshops Following the success of the country missions, the RECs held various workshops over 2010-2011. The secretariats provided updates on the state of preparations for the negotiations for the Tripartite FTA. The most consistent reaction was that the process was delayed and progress needed to move faster. Informal workshops of experts were organized on the thematic issues covered by the draft agreement and by the 14 annexes. In practice, more attention was given to rules of origin and tariff elimination than on other equally important thematic areas such as services and competition policy. In this context, a Tripartite workshop was held in January 2011 in Nairobi, Kenya. The workshop was successful in some respects, and an absolute setback in others. It welcomed the process and the outcomes up to that point and made useful comments on some of the draft instruments, mainly the draft agreement on the FTA and the draft rules of origin. The workshop had various sessions, including on overview of the draft Tripartite FTA and annexes, tariff liberalization modalities, rules of origin, roadmap and negotiating timetable, next steps, and process, vision, and objectives.


The workshop conveners welcomed the occasion to involve member states and engage them on the Tripartite FTA preparations. It was clear that members wanted more ownership of the process, faster progress, and better clarity on the state of documentation and on the way forward, including in terms of the process during the actual negotiations. However, throughout the workshop, there was an outcry at the delays member states perceived. The perception of delays was actually encouraging, however, as it showed that member states were eager to establish the Tripartite FTA and anxious that this was not happening sooner. This sentiment was in line with the joint communiqué of October 22, 2008, calling for the expeditious establishment of a Tripartite Free Trade Area. It continued to provide the mandate for Tripartite activities and a point of reference for gauging progress. A key question that member states across the region were asking was whether the communiqué was being efficaciously implemented and whether there was reasonable progress toward establishing the Tripartite Free Trade Area. There had indeed been grave delays. The lag behind the timelines was long, in some cases over a year. However, the political will to proceed expeditiously was clear and was expressed at the highest political level. It was important not to squander the political goodwill to promptly establish the FTA. In this regard, it was critical to demonstrate that every possible effort had been made to proceed as efficiently as possible and to indicate what had been accomplished thus far, pointing out the significance of the achievements. A tripartite meeting for the private sector was held on rules of origin; the meeting endorsed the November 2009 version of the draft annex on rules of origin. Additionally, a dedicated Tripartite workshop for member states was held on rules of origin; it also indicated critical issues that needed attention. The three secretariats held meetings on sanitary and phytosanitary measures and on customs cooperation. A Tripartite meeting covering the vision and strategy, the FTA Agreement, tariff liberalization modalities, rules of origin, and the roadmap, was held on January 24-25, 2011. The meeting made progress in all the sessions except the one on rules of origin. The secretariats established units to deal with Tripartite matters. Finally, reasonable funding for Tripartite activities was secured, mainly from the UK’s Department for International Development, and special purpose vehicles were established (i.e., Trade Mark Southern Africa (TMSA) and Trade Mark Eastern Africa (TMEA), which were fully functional and wellstaffed to backstop the secretariats of the RECs and the Tripartite process). However, TMSA was abruptly shut down by the Department for International Development (DFID) midway through the negotiations due to serious political and management concerns that the secretary clearly set out in a statement to the British House of Commons. 177

Towards the Second Tripartite Summit of 2011 Though progress was made, there were some important missed opportunities that would have led to better results and better progress. While the FTA has 14 areas,344 each with an annex, the most progress had only been made on NTBs, largely because Tripartite meetings of member states focused on it. Meetings on rules of origin and other areas had not been held as often as had been envisaged. Regular tripartite meetings of member states in all the key thematic areas would have promoted faster and better progress and ownership of the draft instruments. The workshop of January 2011 took some member states by surprise when they saw new changes to the drafts, which had been introduced by TMSA. Such changes, if considered earlier through comments from national and REC consultations and through improvements at the meetings, would be owned by then and would more or less have matured into final drafts for consideration by the Tripartite policy organs. At that workshop, member states expected the meeting to yield decisions. Instead, it was a consultative workshop. The main lesson, then, was that progress was slow and member states failed to hold frequent formal Tripartite meetings due to uncertainty on the way forward. Against this background, as set out so far, it would have been reasonable to seriously consider the following for some key next steps. The three secretariats should have met to clear the final versions of the draft instruments so that member states could use them in preparations for the Tripartite policy organs, and it would have been best if the RECs met together. A synopsis of comments from member states in national and REC consultations should have been prepared—together with an update on activities undertaken since October 2008—as a working and reporting-back document for member states in their consultations and possibly as an accountability document to be presented to Tripartite meetings, including the policy organs. Follow-up with South Africa, as host of the Second Tripartite Summit planned for 2011, should have been immediately undertaken to set the dates for the policy organs, taking into account certain South African concerns. In this regard, national stakeholder consultations should have been facilitated to address certain reservations government officials seemed to have. (Some officials seemed to fear what stakeholders would say if they endorsed the draft instruments as a basis for the negotiations.) A program of planned negotiating sessions should have been elaborated upon and funding for each of the sessions assured and earmarked without the possibility of cancellation to provide assurance to member states that there wouldn’t be serious delays and that the roadmap would be strictly adhered to. The relation of the REC secretariats and TMSA and TMEA, and the relation between TMSA and TMEA, should have been set out more clearly to streamline accountability to member states, to promote ownership by the REC secretariats, 178

to facilitate the organization of REC consultations and meetings, and to promote better teamwork between the REC secretariats and TMSA. In this regard, an email from the SADC Director of Trade was perhaps the best statement of the problem, in which she complained about some TMSA activities, especially the constant reworking of the documents. A planning meeting for the Tripartite policy organs should have been held to deal with documentation, logistics, expected outcomes, and dates; and in this regard at least the Bureaus of the three RECs, the host, and the CEOs of the secretariats attending. The Tripartite Task Force approved the holding of a meeting of the Bureaus of the three RECs, but this had not been organized yet. The idea was to promote ownership by member states and assist with expediting the arrangements for the Tripartite summit. Regrettably, these key steps were not taken in a timely manner, and as a result, the process continued to painfully drag on until finally South Africa sent out formal communication announcing the date for the Second Tripartite Summit. Following this announcement, a formal meeting of the member states—the Tripartite Sectoral Ministerial Committee responsible for trade matters—was organized in May 2011 in Lusaka, hosted by the Government of Zambia, to clear the working documents for the summit. The Second Tripartite Summit, held in June 2011, was preceded by a preparatory meeting of senior officials and the Tripartite Council. What was interesting was that the Summit itself had animated discussions on some issues, particularly the roadmap, which the Heads of State and Government decided to modify to a maximum period of three years instead of the five years proposed by the secretariats. Once the Second Tripartite Summit adopted the negotiation principles, which dealt decisively with some distracting issues, such as the approach to sensitive products, through adopting the principles of flexibility and special and differential treatment, the negotiations were expected to proceed without undue insistence on this matter; however, rules of origin remained to be hashed out. If there was anything to learn from the outcome of the summit, it was that member states were determined and happy to drive the process and the negotiations, either as individual member states or as RECs. 7.2 The negotiation process The negotiations for the Tripartite FTA were undertaken by government experts representing the member states in a body called the Tripartite Trade Negotiation Forum (TTNF), which had the power to establish technical working groups to facilitate analytical work in various areas, including rules of origin, nontariff barriers, customs, technical and health standards, trade remedies, and dispute settlements. The TTNF reported to senior officials at the level of permanent secretaries, who in turn reported to a ministerial committee covering 179

trade, customs, finance, economic, and home and internal affairs. This scope gave the ministerial committee power to address trade and trade-related issues, customs, and industrial and immigration matters. The ministers in turn reported to the full council of ministers made up of foreign affairs ministers as well as all relevant ministers, which finally reported to the heads of state and government at their summits. 345 From the commencement of the negotiations to the signing of the Tripartite FTA Agreement, the TTNF met for a total of 12 sessions over the three and a half years, while the senior officials met seven times, and the trade and industry ministers met three times. The full council of ministers and the presidents met twice: at the launch of the negotiations in June 2011 and at the conclusion in June 2015. Given how trade negotiations elsewhere in the world drag on endlessly, Africa’s expedition is notable and commendable. The main stages of the negotiations were the preparatory phase; adoption of modalities for tariff phase down or trade liberalization; negotiations on the offers, rules of origin, and the text of the agreement, including detailed annexes in the technical areas; and review and conclusion of the negotiations during the last two ministerial meetings. As with most negotiations, each stage was difficult and required serious negotiation. The preparatory phase was supposed to last between six and twelve months. This type of compromise over the duration of the period was used on a number of other occasions as well, and it tended to favor those that wanted the longer periods. During this phase, the countries were expected to exchange information on their existing tariffs, trade regulations, trade flows, and agreements with third-party countries. This exercise took one and half years of negotiations. The challenge was that countries couldn’t mobilize the required trade data due to poor records or lack of coordination between the negotiators and the national statistical offices. In the end, the secretariat stepped in to put together the data on trade flows, mostly using the COMTAT and COMTRADE data bases. When the secretariat convened the ministerial meeting to monitor the negotiations and deal with outstanding issues after one and a half years, it was decided that this data was not necessary, nor were the trade regulations and agreements with third-party countries. Instead, the matrix that was adopted for making tariff offers followed a much simpler format, indicating only the product lines and the progressive reduction of customs duties to zero over a five-to-eight-year period to achieve the Tripartite FTA. In addition, during the preparatory stage, the countries were expected to establish the negotiation structures with clear terms of reference and adopt the rules of procedure to govern the meetings. The TTNF adopted its terms of reference and rules of procedure and established technical working groups to deal with customs cooperation, technical and health standards, nontariff 180

barriers, rules of origin, and trade remedies and dispute settlements. The terms of reference for the technical working groups were adopted, too. The preparatory phase ended in July 2013 when the ministers met to resolve intractable issues. The ministers adopted the rules of procedure, the negotiation structures and their terms of reference, interpretation of the negotiation principles, a detailed roadmap for the negotiations, templates for data and tariff offers, and finalized other house-keeping matters. Negotiators had gotten stuck in a mire of procedural issues. Worse, the negotiators attempted to reach a shared understanding of the 11 principles governing the negotiations as adopted by the Second Tripartite Summit. The reason they embarked upon this exercise and why it resulted in difficult and misleading meanings was because one big member state saw an early opportunity to skew the negotiations toward its positions, which were vastly different from the positions of the rest of Tripartite countries. It was thus that stalemates in the negotiations started quite early in the process. In retrospect, some of the activities for the preparatory stage could have been eliminated, saving time. The next issue that arose was about modalities for tariff negotiations. Some negotiators felt that there was a need for better clarity on the extent of the expected trade liberalization. This was wholly uncalled for, since the Tripartite FTA could have simply combined the existing three FTAs into a single Tripartite FTA. The existing FTAs covered more than 97% of the tariff lines in SADC and 100% of the tariff lines in the case of COMESA and EAC, subject to the usual general and security exceptions and the prohibited goods trade in which would be criminal offenses. Yet modalities were developed that ran counter to the approach of combining the existing FTAs into a single Tripartite FTA. Instead, the modalities provided for immediate tariff liberalization on only 60-85% of the tariff lines upon entry into force of the Tripartite Agreement, with the rest of the tariff lines to be liberalized later over a five-to-eight-year period. The countries that were reluctant to open up their markets offered the minimum. Eventually, all the countries, with the exception of the Southern African Customs Union (made up of South Africa, Botswana, Namibia, Lesotho, and Swaziland), largely disregarded the modalities. Mauritius, Seychelles, Egypt, EAC (made up of Burundi, Kenya, Uganda, Rwanda, and Tanzania and later joined by Southern Sudan), and the rest of the countries in the COMESA FTA offered to extend the existing levels of openness achieved under their respective REC FTAs to the rest of the Tripartite countries—subject of course to reciprocity and maintaining the existing FTA arrangements—and they offered 60% to 90% to the four countries that had not joined the REC FTAs at that time, namely Angola, Democratic Republic of the Congo, Ethiopia, and Eritrea. The real issue was whether to maintain a limited number of exclusions for policy space or products that some countries considered needed protection from 181

competition from similar imports.346Since 2000 when the FTA was established, experience in COMESA has shown that rather than total exclusions, the better approach was to use safeguard measures as and when needed. Over those years, only Kenya had used a safeguard measure, and for one product— sugar. Experience in the SADC FTA showed that 3% of products lines, to be progressively reduced, was an adequate range for exclusions and sensitive products. Experience in the EAC customs union since 2005 showed that a transition period of five years could be used, together with annual consultations to consider any requests for products that needed temporary, time-bound protection. In order to deal with the exclusions, 15% to 40% of tariff lines needed to be included in the initial liberalization. This percentage range amounted to over 2000 products and could cover most of the leading exports in the region. It was known that there were always general and security exclusions in trade agreements, and there were some products in which trade was prohibited or restricted as a matter of law. These fairly standard provisions would not and did not require complicated negotiations. What might have required negotiation were cases where a country wished to exclude a product for protective reasons. While COMESA and EAC had 100% product coverage, not counting the exceptions and the prohibitions and restrictions, SADC was the only REC with other exclusions, although these did not constitute more than 3% of product lines. The Second COMESA Preparatory Meeting for Tripartite Negotiations, held in February 2013 in Livingstone, considered the matter of preparing offers, including both the text and the templates for the offers. The meeting agreed that member states would use the draft schedules for tariff reduction produced by the secretariat as initial drafts for their national consultations and would produce final versions to be tabled for the Tripartite tariff negotiations, at that time scheduled for the Eighth Meeting of the TTNF in September 2013. It was noted that member states might wish to prepare differentiated offers to South Africa, on the basis of the SADC FTA, by simply maintaining those SADC differentiated offers. Member states were therefore encouraged to finalize the preparation of their tariff offers. The strategic practice was for the RECs to hold preparatory meetings ahead of the negotiations. EAC and SACU were most consistent on this. SADC decided at some stage to discontinue their meetings, as its member states would join the SACU or COMESA preparatory meetings. Negotiations on rules of origin got off to a rocky start and went astray. The first issue was deciding on what approach to take—whether to (a) develop productspecific rules where a given product qualifies for the duty-free FTA treatment if it is produced according to the prescribed process and/or a change in tariff heading with conditions for sourcing local inputs; or (b) to adopt the existing approach in COMESA and EAC where a product can qualify for the duty-free FTA treatment either because it is wholly obtained, or it meets the prescribed 182

percentage of originating materials or value addition, or its production results in a change in tariff heading or subheading. This latter approach is generally considered flexible in providing options to producers, exporters, and importers and simpler by having general rules that apply across the board for all products, and it’s quicker to negotiate. Preparatory work clearly showed that product-specific rules were onerous and restrictive. Despite this, the negotiators agreed to develop product-specific rules. Yet in the short-to-medium term, producing product-specific rules for 5,206 Tripartite tariff lines or 97 chapters of the Harmonized Commodity Description and Coding System, as translated into national tariffs, was obviously not achievable. Eventually, toward the end of the set period for the negotiations, only 1,279 Tripartite tariff lines (or 25%) had been completed, covering just about 30% of total intra-Tripartite trade, or about a quarter of the work. After a year and a half, negotiations on the text of the Agreement had not started, yet the Tripartite FTA would need a legally binding agreement. The secretariat proposed a new schedule of negotiations, allotting specific draft provisions to given sessions, with the aim of completing the entire text in the remaining negotiation sessions. The new schedule was adopted by the negotiators, but hardly any of the sessions completed their allotted draft provisions. Nevertheless, much better progress was made under this new approach. Key provisions of the draft Agreement were successfully negotiated, including detailed annexes. In October 2014, after just over two and a half years, a second ministerial meeting was convened to review progress, especially as the negotiations were supposed to have been concluded in June 2014, according to the three-year roadmap adopted by the Second Tripartite Summit held in June 2011 when the negotiations were launched. The main objective of the ministerial meeting was to resolve outstanding issues in the negotiations. At that meeting, the ministers reviewed the progress of all negotiations and resolved a number of outstanding issues. For instance, they agreed on 14 outstanding provisions on the draft text of the Agreement at a critical meeting that was to make the decision on whether or not to convene the summit to launch the Tripartite FTA. A number of ministers were determined to address any challenges and ensure that the Tripartite was launched as close as possible to the timeframe set by the June 2011 summit. They, therefore, sought clear explanations from the secretariat on the sticking issues, options, and implications. The clarity greatly assisted the ministers to resolve the issues by allowing them to adopt policy positions. The policy positions were then written down into legal language for the text of the Agreement. The ministers reviewed progress in all other areas as well, including tariff offers and trade remedies, and they reached the assessment that there was enough progress on the basis of which the Tripartite FTA could be launched. 183

To reach this assessment, the ministers addressed the issue of whether there could be interim or transition arrangements in areas where there was still some outstanding work. They agreed on a number of such arrangements, for instance, to continue using existing REC rules of origin and trade remedies within the RECs and to use WTO rules for countries not covered by the REC FTAs. An example of this was Kenya and South Africa; Kenya was in the COMESA FTA and EAC customs union, but not in the SADC FTA, while South Africa was in the SADC FTA but not in the COMESA FTA and EAC customs union. The same applied to the relation between Egypt and South Africa; Egypt was in COMESA but not in SADC. It was agreed as well that negotiations would continue after the launch of the Tripartite FTA to complete all outstanding issues, including rules of origin and tariff offers. At their second meeting in October 2014, the ministers had agreed that the next Tripartite summit should launch the Tripartite FTA in December 2014 and set a date. However, the date for the summit was subsequently shifted to two days later by one of the secretariats, which caused consternation, especially with Robert Mugabe, then President of Zimbabwe and Chairperson of the Tripartite. Mr. Mugabe instructed the SADC Secretariat to call off the summit, which was eventually rescheduled for June 2015 in Sharm-el-Sheikh, Egypt, preceded by a preparatory meeting of ministers in Dar es Salaam in May 2015. At this final critical preparatory meeting, building on what had been agreed at the October 2014 meeting, six final issues were considered, resulting in the final deal that launched the Tripartite FTA. The first issue was on tariff offers and timelines. Tariff negotiations among SACU, EAC, and Egypt were stalled. To address these issues, it was agreed that the tariff negotiations would continue. A better approach would have been for each country to extend its current FTA regime to the rest of the Tripartite countries subject to reciprocity, as a starting point. A second issue arose on rules of origin. The ministers agreed that intraTripartite trade would be based on the agreed-list rules, that trade within the regional economic communities would continue on the basis of the existing rules of origin, and that trade in products not covered by the list rules would attract full MFN duties except for trade within the REC FTAs. This was probably the worst setback in the Tripartite negotiations, but this position fully accommodated the SACU countries. General rules with origin-conferring thresholds that applied across the board would have provided a simpler and faster solution. A third issue arose regarding the text of the agreement. The entire agreement was finalized except for the provision on ratification and entry into force. It was critical that once signed, the TFTA Agreement be ratified by a simple majority of member or partner states and then enter into force immediately. However, it was agreed that a grace period of one month would be allowed after the fourteenth ratification before entry into force. This replaced the earlier 184

formulation that had stated the agreement would enter into force once ratified by “a simple majority of the parties,� which was a terrible legal mistake, as reference to parties put the cart before the horse in that one became a party after entry into force of the Agreement and not before. Fourth, while the text of the main Tripartite FTA Agreement was ready, along with the annexes, seven of the annexes had not been legally scrubbed. The practical issue was how to initial the annexes. The ministers decided against initialing them, as two ministers wrongly persuaded the meeting that initialing would cause legal complications and was not allowed in their jurisdictions. This was contrary to the international recognition of initialing as simply a step indicating conclusion of negotiations and identifying the agreed package as agreed upon among the negotiators. It was agreed that the annexes would be subject to legal scrubbing as part of the built-in agenda to be completed after the summit. The fifth issue concerned the industrial development pillar. The Tripartite had adopted a developmental approach to regional integration as explained in part I of this book. The initial issue with the industrial work program concerned the inclusion of intellectual property, on the ground that this area would be negotiated during the second phase of the negotiations and therefore should not have been mentioned during this first phase. The ministers eventually decided not to adopt the industrial development work program, dismissing it as not sufficiently ambitious, when the REC industrialization strategies were far more comprehensive and advanced. The irony here was that the Tripartite industrial development program had adopted the minimalist approach because of resistance from some negotiators. The negotiators had decided to limit the program to three sectors, namely, agro-processing, minerals, and chemicals. The program would also cover the usual industrialization activities of needs assessments and cluster development, as well as the cross-cutting issues, including financing, facilitative institutional frameworks, innovation, and intellectual property. It was agreed that the industrial development work program should be adequately ambitious and would be finalized subsequently. The sixth issue was on movement of business persons. The draft agreement was more restrictive in some respects than the current regimes in the Tripartite member or partner states. The mandate from the last tripartite summit was to facilitate and ease the movement of business persons. The private sector had proposed measures to facilitate movement, which included granting visas on arrival, granting long term entry visas of up to six years, allowing movement of intra-company transferees, and adopting a scheme for multiple-country-multipleentry visas for those member or partner states that wished to participate along the lines of the Asia Pacific Economic Cooperation (APEC) travel card scheme. Indeed, the private sector had clearly indicated that these arrangements would greatly facilitate movement of business persons. These proposals were rejected 185

by the immigration officers who negotiated the Agreement on Movement of Business Persons and produced draft provisions that were more restrictive than the existing regimes of a number of member states. The ministers decided that negotiations in this area should continue after the launch of the Tripartite FTA to produce a more facilitative agreement. What, then, would constitute the Tripartite FTA to be launched? This question was pertinent, and it was discussed widely, well after the launch of the Tripartite. Some ridiculed the Tripartite as a bus without an engine that couldn’t move. The observation was that much work still remained to be done. This was true. But this is standard practice in international negotiations. At the time of the set deadline, an assessment is made of the worth of what has been achieved to see if a deal could be concluded and the remaining work finalized subsequently. The Tripartite was launched on the basis of the TFTA Agreement, which was signed. The Agreement had annexes covering customs cooperation, trade facilitation, health and technical standards, dispute settlement, and nontariff barriers, as well as the core rules of origin, though the detailed list rules to be attached to the annex had yet to be completed. Interim arrangements were agreed on rules of origin, namely, that the Tripartite rules of origin would progressively replace the REC rules as and when developed. Interim arrangements were agreed on trade remedies as well, namely that the REC rules would continue to apply within the RECs while negotiations on the Tripartite-level arrangements would continue. A provision on dispute settlement was agreed, though the detailed rules still required cleaning up. The importance of concluding tariff negotiations was underscored and member states that were ready were called upon to finalize their tariff offers and trade on that basis. Even then, a number of countries carried forward into the Tripartite their existing FTA levels of market liberalization subject to reciprocity. For these countries, the tariff negotiations were already completed. While tariff offers were important, it was even more important to take into account that the tripartite instruments provided a harmonized regulatory regime in a wide range of trade-related areas including standards, customs cooperation, nontariff barriers, and dispute settlement that covered half of Africa. The tripartite instruments put in place a comprehensive common institutional arrangement covering the three RECs; this was no mean achievement given the usual inertia of existing institutions when they feel threatened with extinction. This common legal and institutional framework would foster political and economic engineering that would address critical issues facing the region. Launching the Tripartite FTA sent a strong clear signal throughout the world that Africa was taking tangible steps towards continental integration, in terms of more open markets, regulatory reforms, industrialization, and infrastructure development. While a lot of work still remained, agreement by half of Africa on the idea of the Tripartite arrangement, signed into a legal instrument, was a fundamental step that would be hard to downplay. 186

That was in 2015. A review in 2017, two years later, showed that progress was indeed made on outstanding issues. All the annexes were successfully negotiated, legally scrubbed, and adopted by the ministerial meeting held in July 2017 in Kampala, covering all the key outstanding areas such as rules of origin, dispute settlement, and trade remedies. The number of countries that signed the Agreement rose from 14 in 2015 to 22 at the beginning of 2018, with two ratifications. Tariff offers between SACU and EAC had advanced, with EAC offering 65.8% and SACU 66.3% for immediate tariff liberalization upon entry into force of the Tripartite FTA Agreement and to achieve 90.3% and 85.9% repsectively over a five year period. Egypt offered the COMESA FTA treatment to other Tripartite countries subject to reciprocity. Negotiations on product-specific rules of origin had completed 33.5% of the tariff lines, representing trade estimated at US$13,630,848,000,347 amounting to 44.2% of total intra-Tripartite trade. As pointed out already, the approach of product-specific rules was bound to be slow and tedious; a much quicker approach would have been general rules with thresholds that applied across the board on all traded products. The expectation was always that the AFTA negotiations would not take this approach, given the experience in the Tripartite FTA. However, it should be recalled that the rules of origin of the regional bodies continued to apply to trade within those regional bodies, recognized within the framework of the Tripartite as pre-existing arrangements. This reality check established that Tripartite negotiations continued on outstanding issues and progress was made over time. 7.3 The text and scope of the agreements There are various forms of treaties that can be entered into by countries. The Vienna Convention on the Law of Treaties recognizes that arrangements between international entities such as nation states and international organizations can take various forms. Agreements are one such format. Others include conventions, charters, protocols, declarations, memoranda of understanding (MOUs), modus vivendi, and exchange of notes. The choice of the instrument depends on practice and intention. Treaties deal with grave matters, such as cessation of hostilities or establishment of a new institutional order and may deal with a wide range of areas, for example the REC treaties. Treaties are less used now. Agreements deal with specific matters normally of a sectoral nature, such as trade (for example, the WTO Agreements), and are increasingly used. Conventions are normally negotiated under the auspices of international organizations, for example the UN conventions. Charters normally establish new organizations, for example the OAU Charter or the UN Charter. A protocol is subsidiary to a treaty or agreement, for example the EAC Customs Union Protocol or the SADC Trade Protocol; while a declaration is subsidiary and is usually for aspirations, for 187

instance the WTO declarations launching new rounds of negotiations or the Declaration Launching the Tripartite FTA Negotiations. On the other hand, a MOU is subsidiary and deals with operational matters, such as the Tripartite MOU on Inter-REC Cooperation. Others include modus vivendi, a temporary agreement, and exchange of notes, which is normally bilateral and quick, in that the other party responds to a note or letter in the same terms. In the case of the Tripartite, an agreement was the chosen instrument on the basis of common usage in international economic law and given that it constitutes binding obligations and rights and deals with the specific area of trade. It was not appropriate for it to be a convention (for instruments negotiated under international organizations), a charter (constitutes a new organization), or a protocol or a declaration, as these are subsidiary instruments. Areas to be covered by regional trade agreements It may be worthwhile to note that the Draft Agreement establishing the Tripartite Free Trade Area and the annexes draw heavily from and are based on the existing COMESA Treaty, the SADC Treaty and Trade Protocol, and the EAC Treaty and Customs Union Protocol. A comprehensive matrix was prepared, reproducing the relevant provisions of the draft TFTA agreement and comparing them with related provisions from the COMESA, EAC, and SADC instruments. Member states were urged to use the various provisions from the existing REC instruments when negotiating the TFTA Agreement to expedite the negotiations, since the provisions had already been in use, and since the RECs had—to a large extent—already been borrowing from each other in preparing their REC instruments. It may be helpful to spell out in a general form the areas and issues that a regional agreement on market integration should generally cover. These areas include the preamble, citation, definitions or interpretations, establishment, policy provisions, operational provisions, institutional provisions, and final provisions. The preamble explains who the parties are and spells out their motivation. All the REC instruments have preambles, recalling the background of establishing the organizations or the instruments and underscoring the desirable goals and other motivations. The preamble for the TFTA took the two Tripartite Summits as the points of departure, with a focus on achieving the key developmental objectives shared by all member or partner states. Like any entity, an instrument should have a name. There is therefore a preliminary provision called “citation,” whose sole function is to set out the name by which the instrument or the agreement is to be known and called. The EAC instruments have citations, like many other instruments, although the COMESA Treaty doesn’t have this provision. 188

The key terms used in the Agreement need to be clearly defined to avoid ambiguity in interpretation and application. All the REC instruments have this provision, which covers the usual terms used in trade agreements. What matters is to ensure that all key terms used are defined, and that terms not used haven’t been defined. The entity being created by the Agreement needs to be legally established, so regional economic agreements or treaties do have a provision establishing the regional body. The entity being established was the Tripartite Free Trade Area, as a single FTA covering all the three RECs. The policy provisions include the aims and objectives of the organization, its guiding principles, and the general and security exceptions, as well as trade remedies and protection of infant industries. These are necessary to give policy space to the member or partner states to be able to ensure the public good. The provisions also spell out the aims and objectives of the organization. The member or partner states share common developmental aims and objectives. The security and general exceptions are more or less standard in trade agreements. The approach to trade remedies is different in the RECs. There was therefore a need for a degree of harmonization, but what was important was to ensure that the agreed upon mechanisms be simple, usable, and flexible but effective. The operational provisions cover issues like non-discrimination, tariff liberalization, rules of origin, customs cooperation, and elimination of NTBs. These provisions are operative and spell out how the aims and objectives as well as the motivational aspects specified in the preamble will be achieved. Nondiscrimination has two core elements: products from the member or partner states should, at the point of entry, get the best treatment on the books, i.e., the member or partner states should be the most favored nation or be treated like one, and once those products have entered the country, they should be treated like the domestic products; they should not be treated any less favorably, and they should be accorded national treatment. What really defines an FTA is the elimination of customs duties and other charges of equivalent effect and prohibition of nontariff barriers on products traded among the member or partner states. A key provision is, therefore, the one providing that member/partner states shall eliminate duties and charges of equivalent effect on products originating from other member or partner states; and that nontariff barriers are prohibited, while establishing mechanisms for dealing with them when they occur. The elimination of duties in the three RECs has taken a linear approach, achieved over a period of years. However, given that the RECs had come so far in operating successful FTAs, they could build on their experience rather than starting from scratch. Goods need documentation when moving around the FTA, and when they are required to pass through customs. Customs cooperation provisions are therefore a sine qua non for FTAs. Where institutions are created to administer the instrument, the provision can state that the institution is “hereby established” or “shall be established” 189

in future. The powers and functions of the institutions will normally be set out. The better approach is for the provision to effectively establish the institutions, by stating that they are “hereby” established. Trade agreements will have provisions for dispute settlements, so that any issues arising are expeditiously addressed in order to promote the agreement objectives. Without an effective dispute settlement mechanism, the agreement would not function. The mechanism should ensure that costs to users, including the private sector, are kept to a minimum by avoiding lengthy procedures and instead having a simple and understandable mechanism that is accessible to all stakeholders and explicitly state that they have a right to bring cases. As the agreement provides for preferential treatment among the member or partner states, it should also have provisions on relations between the member or partner states with third-party countries, covering existing bilateral and other agreements as well as future agreements. Usually, the provision allows such relations but requires notification and consistency with the objectives and operation of the regional trade agreement, in this case the TFTA. Final provisions deal with such issues as date of entry into force of the agreement in terms of required number of ratifications (approval of the agreement under the domestic procedures of each of the member or partner states), duration of the instrument—whether the Agreement operates indefinitely or not—languages, signature of the agreement, accession by new members, amendment of the agreement, and testimonium or conclusion of the instrument by signatures. These provisions are necessary to make the agreement effective. The TFTA Agreement is therefore arranged as follows: title, recitals or preamble, interpretation, establishment, objectives, nondiscrimination, liberalization of trade in goods, customs cooperation and trade facilitation, trade remedies, trade-related areas and other areas of cooperation, organs for the FTA, dispute settlement, relations with third-party countries, general and security exceptions, financial provisions, general and final provisions, and signatures. Recapitulation of the vision and rationale of the negotiation objectives While the case for the Tripartite Free Trade Area had been made for quite some time, especially in the build up to the first Tripartite Summit in October 2008, it still appeared that the region was headed toward an outcome that represented a lost opportunity. It was therefore necessary to continuously remind the negotiators about the crux of the exercise they were undertaking, so that they didn’t get lost in the technicalities and end up with an outcome that didn’t measure up to the vision and aspirations that marked the conception of the Tripartite idea. Most member or partner states have 0% duties on capital goods and raw materials. The SACU tariff has 56.3% of its tariff lines already with the MFN 190

rate of 0%. In addition, for member states that are in both COMESA and SADC, the application of the principle of acquis means that the existing FTA regime will be extended to the rest of the Tripartite member states subject to reciprocity, irrespective of their participation in existing FTAs. Member states belonging to both COMESA and SADC are: Comoros, Democratic Republic of the Congo (DRC), Madagascar, Malawi, Mauritius, Seychelles, (Swaziland negotiates as part of SACU), Zambia, and Zimbabwe. In addition, the five EAC partner states (Burundi, Kenya, Rwanda, Tanzania, and Uganda) indicated that they would be prepared to offer 100% product coverage at 0% duty, excluding the usual general and security exceptions and the prohibited or restricted products and subject to reciprocity. Likewise, COMESA’s position was to offer the COMESA FTA regime to the rest of the Tripartite, subject to the negotiation principles. This left the SACU countries together with Angola, DRC, Ethiopia, and Eritrea, which were not in the REC FTAs as the focus of the negotiations, bearing in mind that South Africa was most interested in negotiating a phased market access offer with Egypt and Kenya (EAC) as the other two largest markets in the Tripartite region. In terms of strategy then, COMESA member states could and did work closely with the EAC partner states to seek an ambitious outcome from SACU, bearing in mind that the SACU tariff already has 56.3% of its tariff lines rated at 0%. It was, therefore, important to continue seeking an ambitious TFTA. The rationale for the Tripartite was that it formed a larger market than any of the RECs and would improve prosperity by providing higher levels of trade and investment and by drawing on economies of scale. In this way, it contributed to improvement of social welfare by creating employment and availing more goods and services. Studies had established that there would be significant welfare gains from the Tripartite FTA.348 These benefits would not be realized, however, if the liberalization were limited to products on which the tariffs were already at 0% or to product lines that were not commercially significant. The Tripartite, through harmonization, better coordination, and a single FTA, reduces the possibility that member states would implement conflicting programs, given that four of the five EAC partner states are in COMESA and eight of the fifteen SADC member states are in COMESA. The Tripartite provides a decisive manner in which to deal with the issue of intersecting membership. An assessment on the domestication of COMESA Treaty Obligations and Council Decisions, presented to the November 2012 meetings of the Policy Organs in Kampala, showed that member states were confronted with multiple regimes arising from the various RECs. Conflicting regimes constitute political and economic complications for governments that have to choose which regime to implement, and they force the private sector to bear the expense of maneuvering the various complex regimes. For example, a company could be forced to have different production lines for each of the RECs simply to comply with 191

the different regulations and rules of origin. The Tripartite FTA will provide a common regime covering the three RECs, which harmonizes or coordinates trade policy and regulation among the member states. The Tripartite consolidates achievements in regional integration so far through strengthening and expanding the REC FTAs and through harmonization and coordination in pertinent areas such as NTBs, customs cooperation, rules of origin, trade remedies, trade development and productivity, competition, and consumer protection. The behind-the-border regulatory areas are critical and need to be addressed in establishing a Free Trade Area. Regional integration has undergone changes that necessitate a new focus. The old generation of regional integration focused on tariff liberalization, since tariffs were the major instrument of trade policy. With tariff reductions having been achieved by many countries either unilaterally, in the context of structural adjustment programs, or in the context of the multilateral trade system, many countries have resorted to nontariff measures or barriers to regulate trade. The lowering or elimination of tariffs has eroded the margin of preference, thereby rendering tariff reduction within the context of regional integration on the whole a relatively less important issue in contrast to non-tariff barriers,349 but some countries still maintain high tariffs on a number of products of export interest and a number have not joined the REC FTAs yet. Unlike 20th century regionalism, 21st century regionalism is not primarily about preferential market access; it is largely about disciplines that underpin the trade-investment-service nexus. This means that new regionalism is driven by a different set of political economy forces; the basic bargain is “foreign factories for domestic reforms,” not “exchange of market access.”350 “As 21st century regionalism is largely about regulation rather than tariffs, regulatory economics is needed rather than Vernerian tax economics.”351 In fact, only 16.7% of world trade was eligible for tariff preferences in 2010, of which only 2% got tariff preference margins higher than 10%, showing that preference margins have dwindled. Beyond regulatory issues, 21st century trade is characterized by global value chains and a premium on technology and ideas, which shape product ranges and business processes.352 The 2012 Annual Report of the World Trade Organization took a closer look at nontariff measures (NTMs) in the 21st century; these measures arose in a wide range of areas such as food safety, technical standards, and customs procedures. This is the case for a number of reasons. First, NTMs have acquired growing importance as tariffs decreased, either through multilateral preferential or unilateral action. Second, a clear trend has emerged over the years in which NTMs are less about shielding producers from import competition and more about attaining a broad range of public policy objectives, such as addressing market failures where there is information asymmetry as well as addressing public safety and health concerns. Third, the growing public policy concerns 192

add significantly to the complex nature and variety of NTMs deployed by governments. Fourth, the expansion of the public policy agenda means that NTMs will not follow a path of diminishing relevance like tariffs have done. This means that regulatory interventions addressing market failures will remain relevant in the 21st century. Fifth, the increased role of public policy becomes ever more present in international economic relations as globalization intensifies interdependency among countries. For these reasons, NTMs will have to feature prominently in any regional or multilateral integration trade system. While NTMs can be used for legitimate public policy objectives, they can also be used for protectionist motives, and distinguishing between the two can be a real challenge. In fact, there are three motivations for NTMs. First is where NTMs serve public policy goals (essentially noneconomic issues such as ensuring the health, safety, and well-being of consumers). Second are NTMs that have an economic focus based on welfare-enhancing effect on consumers or producers. Third are NTMs that have a political economy motivation that serve interests of particular groups in society and do not necessarily increase national welfare. The Tripartite was no exception to the prevalence of NTMs. Therefore, the provisions of the Tripartite Agreement of necessity contained elements on how to deal with the NTMs in their various forms, recognizing the legitimate ones while establishing adequate measures for dealing with those that constitute nontariff barriers. Negotiation tactics Finally, there is merit in noting some of the tactics applied in the negotiations. This first tactic is inappropriately interpreting the negotiation principles in a manner that would maintain some current regimes that could be improved upon, such as rules of origin and exclusions. The TFTA provided a good opportunity to draw on best practices in the region and to establish an economic space made of the best strategies from the three RECs. In addition, the interpretation and application of the principles should have instead advanced the achievement of the level of ambition demonstrated by the Tripartite Summits, rather than detract from it—that is, expeditiously establishing the TFTA that combined the three RECs to produce a more sublime new single trade regime. This could be done by starting from the current levels of liberalization of the REC FTAs and building upon it to achieve a single TFTA. This could have helped to address the complications of multiple memberships and achieve the common developmental objectives based on a much larger market and on industrial and infrastructure development. However, the principle of acquis, for instance, was interpreted to mean preserving the existing REC regimes to co-exist with the Tripartite FTAs, rather than the prevailing REC FTA levels of market openness being the starting point for tariff negotiations. The amazing argument was that 193

under this scenario, there would in effect be no tariff negotiations, yet there had to be tariff negotiations. A second tactic was procrastination: delaying to make decisions or to conclude issues on the ground of undertaking inconclusive national and regional consultations. Instead, national and regional consultations should have equipped negotiators with a range of options and adequate flexibility necessary to advance the negotiations at each given session, and quick consultations with the capital by phone or email should have been possible, especially in light of the need to promptly complete the negotiations. A third tactic was curtailing the powers of the chair to bring discussion about an agenda item to a close, through insisting and prolonging the discussion in order to draw it towards a country’s specific position, and then having the final word on the matter after the chair’s summary. The proper position should have been that the chair must be able to bring the discussion to a close in order to better manage time and should provide the summary so that there is clarity on the outcome of the discussion. If a country decided to prolong the discussion, however, then the others could ask specific questions and require clear answers to get to the gist of the issue and either find a solution or refer the matter to the senior officials. Negotiators also engaged in divide and rule, taking advantage of divided RECs especially COMESA, and subtly threatening some countries that they could lose their benefits under existing trade regimes. Member states could counter this by adopting and advancing common positions where appropriate and coordinating with the EAC partner states who consistently negotiated as a solid bloc and by reasserting the correct interpretation of the relevant negotiation principles, such as starting with and building upon the acquis, reciprocity, and special and differential treatment. Some special attention should have been given to securing meaningful market access opening by South Africa—given its large size—if it was prepared to be magnanimous and to provide some leadership. There was a need to have a system of quick informal consultations, including during breaks, in order to understand what was going on and to adopt appropriate response strategies. But above all, member states should have been united and coordinated their positions and supported each other tirelessly and clearly whenever one or two countries tried to derail the negotiations through untoward tactics. 7.4 Trade remedies The outcome on trade remedies before the signing of the agreement did not reflect the facts available, as garnered from an empirical survey of the views of member states indicating what type of regime they wanted. Most of the countries argued that the private sector would welcome the Tripartite FTA if 194

they knew that there were adequate safeguards: that duties, quotas, or some restrictions could be temporarily reintroduced if a surge in imports threatened to wipe out some domestic industries, or if a trading partner engaged in unfair trade practices such as dumping or subsidization, which caused damage to others. Such safeguards should be simple and user-friendly, but those provided for under the World Trade Organization were so complex that most of the countries had not been able to use them.353 A survey of Tripartite countries’ preferred approaches indicated that all countries favored simple and user-friendly mechanisms, except South Africa and Egypt, the two biggest economies in the Tripartite region, as well as Botswana, which—as part of SACU—tended to support the South African positions. This group of countries preferred the complex WTO agreements because their laws were already consistent with the WTO policies and were, in their assessment, functioning well. That the approach adopted in the Tripartite was eventually the detailed, complex, WTO-style guidelines to govern the application of trade remedies represents the extreme dynamics present in the negotiations. What the majority of the countries preferred was a set of broad principles governing the use of trade remedies. However, detailed guidelines modelled along the WTO procedures were, in the end, adopted to be the operative provisions. Technically, these guidelines are not binding or mandatory, but they will definitely provide the basis for invoking and applying the trade remedies. Trade remedies or “trade defense measures” have varied definitions. They can refer to three types of import restrictions—antidumping measures, subsidies countervailing measures, and safeguards, which may take the form of higher customs duties or quotas. Antidumping and subsidies countervailing measures may include undertakings to raise the prices of exported products so that they are not so cheap as to out-compete industries in the export markets. Antidumping measures are imposed to counteract an unfair practice by a private firm. Countervailing duties are applied to counteract subsidies on exports. Safeguards are contingent or temporary trade restrictions such as tariffs or quotas in response to import surges. All these measures are intended to defend local producers when they are threatened by competing, cheaper imports. These are basic, non-legal definitions. The WTO agreements contain comprehensive definitions, as well as the substantive and procedural rules that govern these measures. When entering trade agreements, governments must address the protection of domestic industries against unfair trade practices or significant injury by competition from imported products. The emotive politics of antidumping measures, as well as the interface with anti-competitive practices, has not diminished over the years. When the General Agreement on Tariffs and Trade was provisionally adopted in 1947, its Article VI contained provisions condemning dumping. 195

Subsidies countervailing measures also have a long history dating back to Adam Smith’s discourses in 1776 on state bounties for exports and on mercantilism and to the 1791 Hamilton Report that explained how unofficial bounties could harm US efforts to build its national industries. The first modern countervailing law was the US Tariff Act of 1897. Safeguards, on the other hand, came later; the first safeguard law was the US Reciprocal Trade Agreements Program of the Trade Act of 1934. Earlier trade agreements didn’t have safeguard clauses, or “safety valves” or “escape clauses,” and were either terminated or breached in times of crisis resulting from import surges. The US-Mexico Reciprocal Trade Agreement of 1942 had a safeguard clause in its modern form. The GATT 1947 provided for the emergency safeguard. The GATT 1947 has been renegotiated in a number of rounds, and its latest modification is GATT 1994, introduced in 1995 after the Uruguay Round of negotiations, which includes three detailed agreements on antidumping, subsidies countervailing, and safeguard measures. WTO multilateral negotiations are again underway and have yet to be completed since they began in 2001 under the Doha Round, to improve the disciplines on dumping and countervailing measures. Thus, trade remedies have historically been part of international trade agreements and in national laws. The GATT has grown into a multilateral regime on trade in goods, covering a total of 161 countries as of 2017, including 21 of the 26 Tripartite member or partner states.354 Efforts at improvement remain ongoing. The core issues in the discussion on trade remedies have focused on purpose; whether they achieve the intended objectives; how to prevent abuse; different approaches in FTAs—that is, are they required, prohibited, optional, or flexible; and improvement of developing countries’ capacity to use them. Trade remedies can serve a useful purpose in terms of encouraging countries to agree to ambitious levels of liberalization in FTAs, but care should be taken to avoid abuse and be very selective about their use.355 This position is backed by the policy and the relevant WTO rules and by the overall flow of scholarship on the matter. If trade remedies are to be included in the TFTA, they should be flexible and clear. In addition, there should be concerted efforts by governments and partners to build the capacity of stakeholders, especially the private sector and civil society, including consumer organizations, as well as of all relevant line ministries that work to promote the public interest. Furthermore, to deal with the monopolistic abuses resulting from trade remedies, national and regional competition policy and law should complement market regulation interventions to ensure fair trading, to ensure efficient markets that support job and wealth creation—especially among small economic operators—and to protect society at large.356 196

There are pros and cons of trade remedies. Opponents argue that trade remedies are protectionist tools that benefit some producers or even monopolists while hurting consumers, importers, and manufacturers that need cheap inputs; on the whole, they constitute bad economic policy by reducing welfare and maintaining inefficient producers through sheer tariff and quota protectionism. Trade remedies therefore serve no useful purpose and should be eliminated from international trade agreements to promote efficiency in resource allocation, competition, and functioning markets. Opponents argue that antidumping and countervailing measures can be taken up by competition rules to deal with unfair trade practices and by direct challenges under WTO rules on prohibited or actionable subsidies against member states that subsidize exports. On the other hand, supporters argue that trade remedies are indispensable. They provide governments with the confidence to liberalize trade with the knowledge that they have contingent measures at their disposal to remedy situations that could harm domestic industries. There is a middle ground as well: that trade remedies are bad economic policy but should be maintained for reasons of pragmatism or political expediency. Political leaders do not have the will or the wherewithal not to have trade remedies in the agreements they conclude—they would lose office if they didn’t negotiate for or support the application of trade remedies. This school of thought then focuses on how to make the best of trade remedies through improvements to prevent abuse. An illustrative example of this comes from the WTO, where members, who have the capacity to do so, can respond to predatory dumping, to illegal subsidies with the WTO dispute settlement system, and to import surges with a safeguard regime. One example of abuse shows how the importation of stranded wire, rope, and cables of iron steel originating from the UK was thwarted by an antidumping duty imposed by the International Trade Administration Commission (ITAC) of South Africa, although the investigation showed that only fishing rope was in fact being exported at a price below its value. The investigation was instigated by SCAW South Africa (Pty), a South African producer of these products and a competitor of the British company (Bridon International Ltd), which was exporting the products to South Africa. When ITAC subsequently recommended lifting the antidumping measures after a finding that the injury or threat no longer existed, SCAW brought a case in the South African courts to prevent it. Under those circumstances, South Africa could consider applying its robust competition laws. The Tripartite Task Force sent out a questionnaire on trade remedies to member or partner states negotiating the Tripartite agreement. Nine responded: Botswana, Burundi, Comoros, Egypt, Lesotho, Mauritius, Namibia, South Africa, and Zimbabwe. On the question of whether the Tripartite FTA should have trade remedies, all nine responded in the affirmative. When asked if 197

trade remedies should be shorter and simpler, six agreed; three member states responded that they preferred to use the WTO instruments (Botswana, Egypt, and South Africa said that they needed to respect their WTO obligations). Among the nine states that responded, only Egypt and South Africa have invoked the trade remedy measures under their national laws. According to their notifications to the WTO, the following eight Tripartite states have antidumping laws: Egypt, Kenya, Malawi, Mauritius, South Africa, Uganda, Zambia, and Zimbabwe. The remaining 18 states do not have antidumping laws in place. Ten Tripartite member or partner states have made notifications to the WTO under the subsidies agreement. Of these, Burundi, Kenya, Mozambique, Namibia, and Zimbabwe have notified that they don’t have subsidies countervailing laws; Swaziland, Uganda, and Zambia that they don’t give any subsidies; Mauritius, Namibia, and South Africa that they maintain some notifiable subsidies; and Uganda and Zambia that they have laws for taking subsidies countervailing measures. Only three member states—Egypt, South Africa, and Zambia—have laws for taking safeguard measures as notified to the WTO. Only Egypt and South Africa have functioning regulatory and institutional frameworks—i.e., investigating authorities. In response to the questionnaire, Zimbabwe indicated that it has a dedicated institution for undertaking investigations for trade remedies. Mauritius has considered using private investigators, such as retired civil servants. Given the above, it is fair to say that trade remedy laws and institutions are scarce in the Tripartite region. Noting that the WTO requires the existence of WTO-compliant national laws and institutions as a prerequisite for applying trade remedy measures, it is also fair to say that Tripartite states currently lack the legal and institutional capacity to invoke and impose trade remedy measures under the WTO agreements. COMESA, EAC, and SADC have provisions in their instruments on antidumping, subsidies countervailing and safeguard measures. The REC instruments show that the main treaties or protocols contain provisions on trade remedies in broad terms, which are supplemented either by allowing member states to use relevant WTO agreements or by detailing substantive and procedural provisions. COMESA and EAC instruments create dedicated regional subcommittees on trade remedies to oversee the implementation of the provisions, but the instruments do not create regional investigating authorities. A good example is the Kenya safeguard measure on sugar imports, which started in 2002 due to increased imports of sugar into Kenya following the commencement of the COMESA FTA in 2000 and continued well into 2017. On May 11, 2017, the Cabinet Secretary for the Treasury of Kenya, Henry Rotich, issued a notice in the Kenya Gazette providing that “duty shall not be payable on the following items—sugar imported by any person with effect from the date 198

of this Notice to the 31st August 2017.” This in effect terminated the safeguard measure at least for the duration of the notice, after a period of 15 years. The reason cited in the Notice was that “drought and famine in parts of Kenya” had been declared a national disaster by the president, Uhuru Kenyatta. The empirical study undertaken by COMESA Secretariat in 2015 reviewed the operation of the safeguard over the period since 2002.357 A sudden surge of sugar imports into Kenya occurred when the COMESA FTA started operating in November 2000. The increase threatened the Kenyan sugar industry, which was important because of the large number of people it employed and the political sensitivity of closing it down. Kenya therefore sought a safeguard measure to restrict the amount of sugar imports into the country by applying to the ministerial council. The measure was initiated under Article 61 of the COMESA Treaty, which simply provides that a member state may take safeguard measures to last for up to one year after informing the Secretary-General and the other member states in order to address “economic disturbances” resulting from implementation of the provisions on trade liberalization, but the measure may be extended by the COMESA Council of Ministers if satisfied that the member state is taking necessary measures to overcome the imbalances for which the measure is required. The ministerial council attached a number of conditions to the safeguard measure, including the following: the measure should take the form of a quota, which should be progressively increased while the duty charged on imports above the quota volume should be progressively reduced until it reaches 0%; an administrative system for the quota should be established; public-owned firms should be privatized and management improved; research into better sugar varieties should be prioritized; the cane pricing formula should be revised; and infrastructure for the sugar industry should be rehabilitated and improved. Over the years, Kenya put in place initiatives to comply with these conditions. One, however, that continued to draw concern from other member states was the quota administration system, which was considered complex and led to low utilization of the quota. The last extensions, therefore, contain an additional strong condition that the quota administration system should be improved to make it simple, efficient, and user-friendly. The ministerial council granted the safeguard measure for an initial period of 12 months, then subsequent extensions of 12 months, 4 years, another 4 years, then 2 years, and a final one of 12 months with a possible renewal for another 12 months, and then a 2-year extension that ran into 2017. This total period comes to a total of 16 years. This period is in excess of the maximum of 10 years allowed under the COMESA Trade Remedy Regulations. The extensions were granted on the basis of recommendations from comprehensive reports prepared by the secretariat confirming adherence to the conditions, but especially after intensive lobbying by the Kenyan government, driven by political and private 199

sector operators. The government always saw this matter as political, because it knew it would lose elections in the sugar-growing areas if they experienced job losses from industry closures. The owners and managers of the sugar firms, as well as the sugar board and the middlemen who utilized the quota as importers, also fought for their survival. There have been views that a group of influential operators benefit— sometimes corruptly—from the sugar quota. Sugar-producing COMESA member states, on their part, looked for a situation where they alone could supply the Kenyan market and exclude competition from third-party countries. At meetings that considered the sugar issue, private sector operators from other member states, including Illovo, attended in significant numbers and actively participated as spokespersons of their governments, with proposals they advanced and defended, for they saw clear business opportunities to supply the Kenyan market. They aptly referred to sugar as “the sweet product.” A farreaching proposal that the private sector representatives made in the meetings, but which was not carried, was to establish their own working group comprising representatives of sugar-producing firms. It would determine the amounts of sugar to be traded in the COMESA region including the Kenyan market, taking into account their production capacity and competition from third-party countries, particularly those where production was subsidized, such as the EU and Brazil. The safeguard measure enabled the Kenyan sugar industry to survive, though it was frequently reported in the Kenyan media that the industry would remain inefficient while punishing consumers with high prices resulting from a persistent deficit and low volumes in the market. In complying with the conditions under the safeguard, some improvements in the sugar-producing region were registered, such as better roads, new cane varieties, better modalities for paying small-scale out-growers, and attracting new private sector investments into the industry. There are five new private-owned sugar firms out of the total of 12 in the industry. The new firms feel confident and are benchmarking themselves against internationally competitive producers. The government has put in place measures to privatize at least five more firms, but it would keep 25% of the shares. The EAC also had a sugar war at the same time, involving Kenya and the other EAC countries, especially Uganda, which produced and exported sugar to Kenya. The sugar war in the EAC had the additional dimension that the EAC was a common market since 2010, where sugar as a good, together with people and capital, were supposed to enjoy unfettered movement among the partner states. Kenya’s challenge was that the sugar was being transported through Uganda and was not an originating product entitled to duty- and quota-free common market treatment. A similar challenge by Kenya against Egypt in COMESA was 200

addressed by the secretariat quickly arranging an on-the-spot joint verification where a large delegation from Kenya visited the sugar growing and producing facilities in Egypt. The verification successfully produced a consensus joint report signed by the representatives of Kenya and Egypt, confirming that sugar being imported from Egypt into Kenya was indeed grown and produced in Egypt and was a product originating from a COMESA member state. Several analyses of the three RECs showed that, except for Egypt and South Africa, Tripartite member states have not fully utilized existing WTO or REC trade remedies in pursuing their development goals and in seeking to stave off the deindustrialization that resulted from extensive trade liberalization since the 1980s. As Africa reindustrializes,358 trade remedies against the rest of the world may become as critical as they now are for the emerging powers (China, India, Brazil, Argentina, and South Africa). The constraints that Tripartite countries face in this regard include the following: nonexistence of national legal and institutional frameworks, high cost and lack of expertise, local producers’ weakness or poor organization, and fear of repercussions from donors, who might get upset if trade remedies were applied against imports from their countries.359 Furthermore, until recently, most countries have enjoyed high-bound tariff rates, which have provided the possibility of increasing applied rates up to the bound levels as measures to protect domestic industries. However, with the increase in African FTAs, and in light of the waves of multilateral trade liberalization, this option has been rapidly disappearing. Egypt and South have actively used trade remedy measures in the multilateral trade system. The rest of the Tripartite member states—even those few that notified the WTO of their trade remedy laws—have hardly used the measures; they also lack functional investigating authorities. This is a sharp contrast that requires a rational approach that takes into account that Egypt and South Africa might be reluctant to stop using their existing laws and institutions. On the other hand, it must also take into account the other member states that stand no realistic chance of using trade remedy laws in accordance with the WTO agreements, as experience since 1995 to date has clearly shown. All Tripartite countries except Egypt and South Africa, joined by Botswana, preferred a simple, user-friendly mechanism. But as a result of the bullying of Egypt and South Africa, the Tripartite ended up with a system closely modeled along the WTO regime. The three RECs have such systems, but the systems have never been used. The capitulation came at a time when a deal had to be reached. The will to fight back against Egypt and South Africa was weak. Instead, the 24 smaller countries should have started off without Egypt and South Africa, betting that the political fallout of not being in the Tripartite FTA would be far too grave and trusting that good sense would eventually prevail. 201

7.5 Conclusion The momentum of regional integration in the Tripartite area has been palpable and impressive. Elsewhere in the world, there is no doubt that regional integration is the way of the future. As such, more regional trade agreements are being concluded by large and small nations. On the continent, the African Economic Community—which will go through the classical stages of integration until it becomes a monetary and economic community, but at the same time, will equally prioritize sectoral cooperation in industry and infrastructure, among others—remains the African template for the regional economic communities, which the Tripartite arrangement supports. It is the political responsibility of every successive generation of government officials and other stakeholders to prioritize the integration of the continent, of the Tripartite, and of the regional economic communities. The Tripartite envisions a single market. This is a call to deepen and widen integration into a seamless economic space that will eventually become a single market. In the long run, regional integration will be shaped by the decisions made at important turning points when key milestones in the integration process must be reached. The Tripartite might just be the best thing that happened to Africa in this second decade of the second millennium. Signs are everywhere—from the motivation, to the process so far, to the current achievements—that the Tripartite FTA can be operationalized. It remains for all actors to work together to achieve it expeditiously.


8. Continental consolidation 8.1 The right to development 8.2 The role of regional economic communities 8.3 Going continental 8.4 Negotiating the Continental FTA 8.5 Financing the African Union 8.6 Conclusion This book has examined the theory and vision of African developmental integration and then regional experimentation, showcasing where some regional economic communities have excelled. ECOWAS has successful peacekeeping programs. SADC has infrastructure programs. EAC has the regional Parliament and Court, and COMESA has the largest free trade area in Africa, together with vibrant financial institutions and supportive trade facilitation programs. These areas provided initial entry points for these RECs, but the RECs progressively adopted higher levels of complexity in terms of variety of programs and institutions and in adapting to the multidimensional challenges of socioeconomic transformation. Lessons at the regional level—especially the complications of a country belonging to multiple RECs and the need for coordination and harmonization of the resultant web of programs—catalyzed consolidation among some RECs through convergence initiatives. Three RECs (COMESA, EAC, and SADC) took the consolidation further into a concrete political and institutional framework covering half of Africa. The Tripartite initiative motivated more creativity and courage that resulted in negotiations for a continent-wide Free Trade Area covering all the 55 countries of Africa. This chapter turns to the African Continental FTA (AFTA), which consolidates the COMESA-EAC-SADC Tripartite FTA with the trade programs of other regional bodies at the continental level to produce a single Africawide trade regime, while allowing the higher levels of integration achieved by the regional bodies to continue until the continental regime catches up. This chapter first situates economic integration in the right to development—in line 203

with the African Charter on Human and Peoples’ Rights—to further infuse the developmental dimension into market integration and other integration programs. The chapter then recalls the approach of regional bodies as building blocs and examines their future role in continental frameworks, taking into account the principles of acquis and subsidiarity. The chapter next draws lessons from the Tripartite for the AFTA negotiations. It then examines the AFTA negotiations themselves. A critical issue has always been how to finance regional integration in Africa. This chapter looks into the prospects for financing the AFTA and other core integration programs and ends with a conclusion. The experimental learning from the Tripartite FTA that went into the AFTA negotiations was impressive, particularly as the Tripartite FTA negotiators still represented their governments in the AFTA negotiations and drew on their insights. Tripartite instruments especially the annexes in the various traderelated areas were used as reference material or working documents in the AFTA negotiations, which assisted efficiency. These included the annexes on dispute settlement, trade remedies, non-tariff barriers, technical barriers, sanitary and phytosanitary measures, customs cooperation, rules of origin, transit trade, and trade facilitation. As would be expected, there were areas where Tripartite instruments were improved upon, especially with respect to rules of origin. 8.1 The right to development The right to development has been a driving factor in Africa’s regional integration efforts,360 even though it has not been explicitly articulated into these programs. Promoting human development in a holistic manner is a more wellknown, explicit objective of economic integration in Africa. Africa has pursued developmental integration, which is based on three pillars: market integration, industrial development, and infrastructure development. Defining what the right to development means is important. Fundamentally, the right to development is a broadening of human rights.361 The 1981 African Charter on Human and Peoples’ Rights states in Article 22 that “all peoples shall have the right to their economic, social, and cultural development with due regard to their freedom and identity and in the equal enjoyment of the common heritage of mankind.” This provision is part of the body of law of the African Union. The 1986 United Nations Declaration on the Right to Development explains in Article 1 that “the right to development is an inalienable human right by virtue of which every human person and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural, and political development, in which all human rights and fundamental freedoms can be fully realized.” And in Article 2(3), it provides that “states have the right and the duty to formulate appropriate national development policies that aim at the constant improvement of the well-being of the entire population and of all individuals, on the basis of their active, free, and meaningful participation in development 204

and in the fair distribution of the benefits resulting there-from” and adds in its Article 3 that “states have the primary responsibility for the creation of national and international conditions favourable to the realization of the right to development.” In the context of integration in Africa, the right to development means that the programs should be designed to work toward “economic, social, cultural and political development.” In terms of operationalization, the right to development requires that governments exercise their “right and duty” in policy formulation and implementation and in “the creation of national and international conditions” for achieving “economic, social, cultural, and political development”; and that the integration programs be aligned to this developmental objective.362 Even before policy formulation and implementation of regional integration programs, the right to development requires a pre-assessment of the human rights impact of agreements in order to be negotiated and adopted. As an example, before concluding the agreement establishing the AFTA, arrangements were expected to be in place for assessing the impact on key stakeholders, including in terms of job creation and job destruction, gender equality, and livelihoods of communities such as those that depend on agriculture. Thus, a number of situational analyses and studies using econometric modeling have been undertaken to make the case for or against the AFTA. The findings from the reports produced by the United Nations Development Programme (UNDP) and the UN Economic Commission for Africa have indicated that there will be significant welfare gains from the AFTA, especially if, in addition to tariff elimination, various complementary programs are adopted to reduce nontariff barriers, facilitate trade, and develop infrastructure.363 That socioeconomic rights, including the right to development, are not enforceable is more of an anachronism now. State and court precedents in a number of countries such as Canada, Kenya, India, and South Africa have shown that governments are prepared to incorporate these rights into national laws and policies and to take measures in their implementation. Furthermore, courts have the required pragmatism and restraint to make judgments that take into account resource constraints on the ground while requiring clear steps toward progressive realization of these rights.364 Regional integration, specifically the developmental approach, is part of this progressive process of achieving socioeconomic human rights including the right to development. However, the right to development ought to be clearly mainstreamed into the specific programs of regional integration organizations and to become a basis for monitoring and evaluating implementation. The basis for the developmental approach to integration in Africa is that market liberalization by itself, especially through creating free trade areas and adopting the related trade facilitation and market information programs, is hardly adequate to achieve economic development. A large market needs products to trade. 205

Though the main aim of market liberalization is to create large functional markets that can generate and attract investment, levels of intra-regional trade and investment have remained low even in those African regional economic communities that have pursued market liberalization programs for decades. Intra-regional trade in Africa remained at 11.3% of total trade for decades, which was considered low in contrast to America, Asia, and Europe, where it ranges from about 40% to 70%.365 Intra-Africa trade has now risen to 21.2% of total trade, according to 2018 COMTRADE statistics. Therefore, together with creating large markets, there should be explicit and clear industrial development programs to deliver the products to be traded on those large markets, so that the markets support industrialization and economic structural transformation. An enabling regulatory framework overseen by governments is also critical. At the same time, movement of products requires supportive infrastructure in place—e.g., surface and air transportation, energy, and the enabling information and communication technologies. Infrastructure development connects regional markets to enable efficient movement of products, information, and people. Other pillars of a developmental approach to economic integration in Africa include agricultural development and rural transformation (70% of the population in Africa live in rural areas and derive their livelihoods from agriculture) as well as a sound technological base to operate in today’s technology- and information-driven economies. Science, technology, and innovation are therefore critical programs to propagate inventions and their commercialization and application to solve social economic challenges and harness global knowledge and skills. Another pillar is facilitating movement of business persons. Such a developmental approach addresses key challenges Africa faces in seeking economic structural transformation, the creation of decent jobs, and sustainable development. The potential for regional integration to improve the general quality of life underscores the critical importance of prioritizing and fast-tracking the creation of functional large markets among groups of like-minded countries, which support investment, job creation, and market opportunities, and then proceeding to adopt all the necessary complementary programs in key sectors including innovation, agriculture, industry, transportation, energy, communication, water, natural resources, gender, health, education, and statistics. 8.2 The role of regional economic communities As building blocs, the eight regional economic communities are expected to merge in order to ultimately form the AEC. According to the stages set out in Article 6 of the AEC Treaty, the regional economic communities are to start by forming the continental customs union, followed by the continental common market, and eventually the monetary and economic union. Before merging into


the continental customs union, each of the regional economic communities must form a free trade area and a customs union. Analyses of the provisions of the constitutive instruments of the regional economic communities, however, shows a varying picture. The RECs are each proceeding under a legal framework that differs in terms of rules of origin and criteria for preferential treatment under the community regime,366 product coverage for trade liberalization,367 sources of funding community operations and organs,368 and powers and functions of community organs established. The RECs will be able to integrate to form a continental customs union and common market if a common or harmonized regime in all those areas has been agreed upon, otherwise the multiplicity of conflicting rules would be inconsistent with the very idea of freedom of movement or common policies.369 Regarding the organs, there are at least two options. At the adoption of the continental common market, organs established under RECs could be dissolved on the ground that jurisdiction under the AEC vests in AEC organs. If this happens, any inconsistencies in powers of and in organs created under RECs will dissolve after the transition. The other option is for the RECs to function as divisions of the AEC, on the grounds that running the whole AEC from one station at headquarters in Addis Ababa or any other single capital city of Africa would require a bureaucracy exceeding Africa’s resources. Thus, organs of the RECs such as the courts, technical committees, and secretariats would be subordinate to corresponding AEC organs. The RECs would maintain their organs, functioning under relevant AEC instruments. In both cases, differences in both organs created and their functions will not constitute fundamental obstacles to the transitions, provided that a harmonizing instrument can put REC organs under appropriate AEC organs. But uniform organs under the RECs would render such an instrument unnecessary, for they would be subordinate to AEC organs, and they would start functioning even before a continental customs union or common market. They have the added benefit of spreading the financial burden and of locating the organs out in the field, enabling an effective reach. Uniform organs would politically strengthen the AEC process due to clear channels of coordination and interaction. A problem with differences in organs is that citizens of RECs may enjoy different rights and benefits. For instance, the ECCAS, ECOWAS, and COMESA treaties establish proper community courts; the ECOWAS treaty also provides for an arbitration tribunal, whereas SADC provides for a tribunal, among other things. Furthermore, the COMESA and ECOWAS treaties apparently provide for the participation of civil society to a greater extent than the other RECs (with the SADC treaty providing the least amount of engagement). These differences in involvement and rights do not foster a community feeling at the continental level, and they may enhance a regionalism that can 207

subsequently undermine the aims of African unity generally and of the AEC specifically. In addition, a more involved interpretative role for courts with such varying jurisdictions can lead to REC and AEC jurisprudence developing at variance. Furthermore, it would be improper for the REC courts and tribunal to be part of the AEC Court, even as registries exercising jurisdiction under both the AEC Treaty and the relevant REC treaties, when they have such differing jurisdiction. In this context, the Tripartite arrangement is expected to help expedite the process of continental integration by merging three RECs into a single free trade area. This merger will be achieved through the Tripartite FTA Agreement taking precedence over the constitutive instruments of the RECs in the event of inconsistency. But this also means that the role of the RECs will continue to evolve. Critical issues such as investment, competition policy, intellectual property rights, and innovation will continue to be part of the mission of the RECs. 8.3 Going continental As Tripartite negotiations were picking up in 2012 after launching in June 2011 in Johannesburg, the African Union was paying close attention and calling upon other RECs to emulate this initiative, specifically ECCAS, ECOWAS, and Arab Maghreb Union (AMU). Topical issues for AU political leaders were boosting intra-African trade and industrialization and fostering socio-economic transformation. A flurry of annual reports produced from 2012 to 2015— especially by the United Nations Economic Commission for Africa (UNECA), UNCTAD, and UNDP—fed into high-level policy deliberations, resulting in decisions to adopt an Action Plan for Boosting Intra-Africa Trade and to establish the AFTA. The decision to complement AFTA with programs for infrastructure and industrial development, trade facilitation, and information and communication technologies was evidence-based and drew inspiration from the Tripartite FTA negotiations. Africa is the leading export market for the Tripartite countries, taking in 24.1% of total exports, of which intra-Tripartite exports constitute 21.2%, COMESA 8.9%, and ECOWAS 1.1%. After Africa, the leading export markets are the EU at 22.4%, China at 14.5%, the USA at 5.5%, and the UK at 3.5%.370 These data show that AFTA negotiations were important for the Tripartite countries, as Africa was a leading export market. It also shows that Africa was a credible market to take seriously. Given this stake—and taking into account that the Tripartite countries were part of the African Union and, therefore, would be bound by any continental instruments they concluded—there was an obvious link between the Tripartite FTA and AFTA.371 In the afternoon of June 10, 2015, in Sharm el Sheikh, Egypt, the Heads of State and Government concluded the agreement establishing the Tripartite 208

FTA and the declaration launching the FTA. Twenty-three countries signed the declaration and 15 signed the agreement. The following signed the agreement: Angola, Burundi, DRC, Egypt, Comoros, Djibouti, Kenya, Namibia, Seychelles, Tanzania, Malawi, Rwanda, Sudan, Uganda, and Zimbabwe. Swaziland signed a week later to bring the total to 16, followed by Zambia and Libya, bringing the total to 18 by March 2017. South Africa, Madagascar, and Mauritius signed in the second half of 2017, and Botswana in early 2018. The Tripartite FTA covers a combined population of 720 million and GDP of US$1.3 trillion. It provides a single policy and regulatory regime in an array of trade-related areas such as non-tariff barriers, customs cooperation, trade facilitation, health and technical standards, and dispute settlement. This is a sizeable economic space and market by any standards. In January 2012 the African Union Heads of State and Government took a decision to establish the African Continental Free Trade Area by 2017 and the African Continental Customs Union by 2019. This decision includes the adoption of an action plan for boosting intra-African trade (BIAT), based on seven clusters: trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information, and factor market integration. The economic case for this action plan was sound. First, analytical work done by the UNECA demonstrated that intra-African trade would more than double from 10.2% in 2010 to 21.9% by 2022 if AFTA were established by 2017, accompanied by trade facilitation measures such as elimination of non-tariff barriers.372 Second, there was a glaring gap in the six stages for forming the African Economic Community: i.e., there was no provision for a continental FTA, which should be a logical step before the 2019 continental customs union. That said, the customs union conceptually entails a free trade area, as the former must have free movement of goods among the members and prohibition of nontariff barriers. Furthermore, the continental common market by definition will involve free movement of goods, services, labor, and capital, which covers the element of the free trade area in terms of free movement of goods. The implication, therefore, is that there is ample basis for the formation of AFTA. Third, the Tripartite FTA, covering COMESA, EAC, and SADC (a total of 27 out of the 55 countries of the African Union), would provide a strategic launch pad for AFTA. Besides, experience suggests that progress on FTAs can be faster than operationalizing a customs union. In light of the Tripartite FTA, strategists would see the value in leveraging this achievement and fast-tracking the establishment of the Continental FTA. Following a process of consultations with multiple stakeholders, including academia and the private sector, the African Union Assembly adopted the decision to establish AFTA, encouraged by progress made on the Tripartite FTA negotiations.


At an event hosted by President Jacob Zuma in South Africa on 12 June 2015, AU Heads of State and Government launched negotiations for AFTA, a mere five days after the Tripartite FTA Agreement had been signed. The AFTA, spanning the whole continent, would launch in March 2018. Following closely on the heels of the Tripartite FTA, the momentum for regional integration in Africa is high. The AFTA will have a combined GDP of about US$3.4 trillion and a population of about one billion people, with more than half comprised by the youth. It is estimated that in 2016, consumer and business-to-business spending in Africa was at US$3.9 trillion and was projected to reach US$5.6 trillion by 2025.373 The AFTA initiative, therefore, injected a new dimension in international relations, building on Africa’s solid record since the establishment of the African Union on 2002 of speaking with one voice and engaging the world actively as a united bloc, whether in seeking better representation or better rules in the WTO, during climate change negotiations, at the World Bank, at the International Monetary Fund (IMF), or in UN negotiations. Building on the Tripartite FTA will require an incremental process or a learning process or both. It will be incremental in terms of other RECs (especially ECOWAS) joining up with the COMESA-EAC-SADC Tripartite to fast-track AFTA on the basis of the principle of variable geometry, both in negotiations for the text and market liberalization. Policymakers would be best advised to learn from and use the documentation, principles, and lessons from the Tripartite negotiation process. The AFTA negotiations were scheduled to be completed by December 2017—just two years after negotiations began versus the three and a half it took to conclude the Tripartite. The AFTA negotiations on the text of the Agreement were concluded later in March 2018 when the AFTA Agreement was signed in Kigali at an extraordinary summit of the African Union hosted by President Paul Kagame of Rwanda. The legal scrubbing (cleaning up of the text by lawyers) was done subsequently, and the texts definitively adopted in July 2018 at the African Union Summit in Mali. Even then, negotiations on market liberalization (reduction of customs duties, and on sensitive and excluded products) continued thereafter. The pertinence of the lessons was undeniable. The 27 countries that negotiated and launched the Tripartite were among the 55 negotiating AFTA. Given that they comprise half of the total, these 27 countries could wield considerable influence if they were to draw on their experience and the lessons of negotiating the Tripartite Agreement. This could be a bonus for the continental negotiations, as half of Africa would already be a Free Trade Area. Adding the other half could take the form of extending the Tripartite levels or standards of market integration to the rest of African countries, subject to reciprocity or of improving those levels or standards.


Certain systemic issues arose from the juxtaposition of the Tripartite FTA and AFTA. Could they coexist eventually? If not, should the Tripartite FTA and the regional economic communities be wiped out? The RECs were supposed to be the building blocs for continental integration. If they opted for coexistence, it was absolutely necessary to avoid conflicting or contradictory regulatory and policy frameworks that governments and economic operators would otherwise have to cope with at great cost and inconvenience. Consistency between the regimes would be ideal. If either regime has comparably better rules and policies, then the inconsistency should be resolved by using the better of the two as an overarching continental rule. The challenge of the subjectivity inherent in such a judgment would need to be addressed by allowing the coexistence of the various regimes and by granting users the flexibility and right to choose on a case-by-case basis. In practical terms, all existing Tripartite and REC regimes should have equal legal validity to allow a choice of the best regime in a given case. Exporters, for instance, should have the possibility to choose a rule of origin under which their products qualify and then to choose the most generous market access regime to use for a consignment. With automation of customs systems, this would be possible. This kind of regime with several possibilities that allow the best rules to be used already exists in COMESA and in the EAC, through the kinds of rules of origin that operate (five criteria to choose from in the case of COMESA) and the principle of variable geometry, which envisages multi-speed integration. Negotiation of Africa’s free trade areas is likely to cover at least the following six main topics: setting of objectives and principles as well as interpretation of the principles, the preparatory or housekeeping matters of rules of procedure and establishing institutions, preparation of the text for the instruments, legal scrubbing of the text after it is negotiated, choice of approach to and elaboration of rules of origin, and choice of modalities and finalization of offers for market opening. Setting the vision and objectives as well as time-precise targets with a builtin monitoring and evaluation system provides clarity of direction. This tends to be done at a high political level by the presidents and ministers. However, this high-level political guidance should be fully owned at the technical level by the negotiators, advisors, and the secretariats. Such ownership can come from a careful selection of passionate and smart integrationists. Similarly, principles to govern the negotiations can provide useful parameters and clarity, if a consensus on the meaning of the principles is reached. Again, this can be done at a high political level, but ownership and a shared understanding at the technical level will help take the negotiations to clearer outcomes. Much of the negotiation will be a technical bean-counting exercise. Therefore, supportive technical institutions must be established. There will be a main technical body in which the negotiations take place, but this body will 211

need thematic specific working groups or subcommittees to address the various technical fields such as rules of origin, non-tariff barriers, customs cooperation, trade facilitation, product standards, trade remedies, and dispute settlement. Under a developmental approach to economic integration, experts must undertake parallel work on industrialization and infrastructure. The overarching high-level bodies responsible for supervising the negotiations and adopting the final deals must also be established. The decision to venture into a new massive free trade area should be evidence-based. A clear case should be made on the basis of demonstrable welfare gains in the context of the quest for socioeconomic transformation. Without such a case, it would be difficult to galvanize the required support and ownership by key stakeholders in the public and private sector. The evidence-based policy should be formulated within the broader approach of developmental integration based on the three pillars of open markets, industrialization, and infrastructure development. FTAs in economic integration in Africa are much more than just trade agreements; they are foremost tools for economic development. Time should be allotted for an inclusive consultative awareness-creation and consensus-building process involving all relevant players in policy formulation and implementation. This process should be designed to result in appreciation of the issues at stake and understanding of the proposed ways forward in terms of vision, roadmap, policy thrusts and interventions, institutional framework, resource requirements, and business processes or roles of stakeholders and drivers. Key players include central and local government as well as parliaments, grassroots organizations (covering the private sector and civil society organizations), and thinkers, innovators, and knowledgegeneration and management institutions, including universities and embedded research institutes. The secretariats of regional organizations must rise to the occasion by providing technical and analytical input. This involves initiating and explaining studies and proposals to facilitate the negotiation and engagement processes, convening and organizing the intergovernmental events that bring governments and other stakeholders together to transact business, as well as in-country events that contribute to the regional level outcomes. In performing this critical role, secretariats should work closely with other relevant intergovernmental or peer organizations, including other secretariats, regional and international knowledge institutions, the media and other shapers of public opinion, and academia. The rule of thumb is ensuring adequate preparations for the negotiation sessions on the part of the negotiators and secretariats, and to get the logistics and documentation right. This includes handling mundane things like choosing a convenient venue that is easy to reach, has easy entry requirements including 212

immigration and health, friendly foreign exchange rules, and an existing hospitality infrastructure and culture. The point is to avoid having irritated or exhausted negotiators. During the negotiations, a number of challenges are bound to crop up that can fatally derail the process and lead to an outcome that misses vast opportunities for socioeconomic transformation if not addressed carefully. Having technically adequate and user-friendly working documents for the negotiations is important, as are comparable skills on the part of the negotiators or at least the capacity to internalize the issues and engage in a relevant and constructive manner in line with given negotiation objectives. Working documents have to be presented and explained in an easy manner, which the secretariat can facilitate. In addition, negotiators will need to have adequate national consultations ahead of time, and they will need rapid response mechanisms to adjust positions in line with the dynamics of the negotiations. The ability to consult and get quick instructions from capital cities by email or social media can come in handy and unlock last-minute stalemates. In addition, the mandate given to the negotiators should be reasonably flexible to allow a negotiation to happen. Better yet, the mandate should have fallback positions that anticipate and accommodate priorities of other parties. Working documents can indicate such priorities and other pertinent considerations that can arise. The AFTA negotiations could indeed benefit from lessons learned in negotiating the Tripartite FTA. Some of these lessons include: (1) avoiding wasting time on procedural issues and giving priority to substantive negotiations regarding rules of origin, tariff elimination or reduction offers, and the text of the agreement; (2) ensuring good technical analysis and ensuring that working documents on key issues arising from the negotiations are complete and that negotiators receive them in a timely manner; (3) strong political oversight at ministerial and presidential levels exercised through regular meetings to review progress, resolve sticking issues, and maintain a high momentum; (4) drafting the emerging text early to make it useable to incrementally build up the Agreement as negotiations unfold; (5) leveraging partners that can provide technical backstopping of the negotiations such as the United Nations Economic Commission for Africa, UNDP, and UNCTAD; and (6) ensuring adequate financial resources for governments and the African Union Commission. Other lessons include the following: 1. There should be proactive engagement with member states during the preparatory phase to ensure that the time is actually used for preparations. 2. Clear upfront political direction can assist the technical negotiators to not get stuck in a labyrinth of their own making. 3. Meetings should allow enough time for negotiators or ministers to complete their work.


4. There should be a degree of standardization in the editorial policy, referencing, and tracking of the various versions of documents to assist record keeping and use. 5. Imagination and resourcefulness in finding the phrases and words that satisfactorily capture the varying positions and priorities in the negotiations are critical for negotiations to advance to a conclusion. 6. Technical hands-on assistance from the secretariat and other partners can enable government officials to undertake the extensive technical work required in finalizing the negotiation, for preparing the tariff offers, and making sense of rules of origin. 7. For very technical areas to be negotiated, such as health and technical standards, a group of technical experts can have working sessions to produce working drafts for the negotiations. 8. Leaders will emerge in the negotiations, and this will benefit the entire region if they represent its best interests. Such leaders can be nurtured early on in the process and supported throughout with analytical work and guidance through the issues up for negotiation at every turn. 9. A precise timetable for the negotiations, indicating what to accomplish at each given session, is absolutely critical and needs to be adhered to. 10. Last but not least, variable geometry is a key to moving ahead. Just as in the Tripartite, the AFTA is complemented by other initiatives to support industrialization and infrastructure. Transparency in the negotiations will be key to generating ownership among stakeholders and users of the negotiations’ outcomes. One of the questions arising from the expansion of continental agreements and institutions is whether they make the initial regional bodies redundant. In fact, the coexistence between the two organizational levels makes the system more robust with increased capacity to generate quick solutions to novel problems. A systems view would suggest that it is through the emergence of organizational complexity that Africa increases its capacity to respond to emerging challenges. Catalytic role of the African Union The AU is often dismissed as ineffectual, a talk-shop for tyrants, and filled with bureaucrats concerned more with personal power than with solving Africa’s most pressing political problems. This raises fundamental questions over these new initiatives for scaling up continental integration. Its catalytic role, especially in partnership with regional bodies, is often overlooked. But the AU’s response to the Ebola outbreak in West Africa in 2014-2015 illustrates the powerful role that interactions between different layers of governance and actors can play in responding to challenges. 214

In 2014 when the Ebola crisis hit Africa, the AU budget for the year was US$308 million and yet the United Nations estimated that US$600 million was required to contain the spread of Ebola. Although AU was able to raise just over US$1 million from its humanitarian fund, its greatest contribution was in leveraging its convening power, bringing together different actors, and adapting its experiences, like peacekeeping, towards disease control. The AU, unlike any other organization, was able to draw on the experiences of member states and scale them up for regional action; and in so doing, it made a critical intervention and turned the tide toward containing the Ebola pandemic in Africa. The index case (the initial patient) of the Ebola outbreak was recorded in December 2013 in the southern part of Guinea in the village of Meliandou after which it spread throughout the country, reaching the capital city Conakry by late May, with 281 reported cases and a death toll of 186. The disease subsequently spread to Guinea’s neighboring countries, with several cases reported in Liberia and Sierra Leone and a few cases reported in Mali and Senegal. Cases were also reported in Nigeria, United Kingdom, Sardinia, Spain, and the United States. Meanwhile, the Word Health Organization (WHO) did not declare Ebola a public health emergency of international concern until August 2014 The first African health ministers meeting was held in April 2014 in Luanda, Angola, to address several issues, including universal health coverage and the creation of an African Centre for Disease Control and Prevention. In his opening remarks, the Angolan health minister urged AU member states to remain vigilant and active in eradicating Ebola, stressing population methods of disease prevention and increased emphasis on hygiene. In July 2014, the permanent representatives committee of the AU agreed to convene a special session on Ebola, and in August, US$1 million was released from AU’s special emergency assistance fund for drought. In the same month, the AU Support to the Ebola Outbreak in West Africa (ASEOWA) was formed, and the AU Peace and Security Committee authorized the immediate deployment of personnel from ASEOWA, which was an AU-led military and civilian humanitarian mission to contribute to the national and international efforts to contain the spread of Ebola. The AU called upon member states for qualified health workers. The governments responded promptly by sending about 900 health workers to Guinea, Liberia, and Sierra Leone. The team included medical doctors, nurses, field and medical epidemiologists, public health workers, clinical officers, laboratory technologists, hygienists, infection controllers, psycho-social staff, and burial teams. Using its convening power, the AU brought together novel combinations of actors to provide new responses and ensured a common message went out, making it clear that Ebola was real, it was possible to avoid infection, it could be treated, and that everyone could contribute to the fight against Ebola. Among 215

the new responses was that of the African private sector, which raised up to US$15 million, and the engagement of member states in order to restore air links and normal trade relations, which had been affected by the Ebola pandemic. A successful and noteworthy response and the first ever public/private crowd funding exercise in Africa, mobile telephone network operators in 46 African countries carried out an SMS campaign, “Africa Against Ebola,” that raised US$34 million from ordinary citizens throughout the continent. The ASEOWA team ran Ebola treatment units and contributed to community mobilization. The epidemiologists tracked 49,493 people through contact tracing. It provided training to 6,505 local health workers, community workers, traditional leaders, and other participants. It also helped to restore health services in 88 hospitals and public clinics. Ebola was an African challenge and in an unprecedented way. By drawing on experiences from member states, and bringing them together to scale up regional action, the AU was able to arrest its spread. Several important outcomes emerged from the aftermath of the crisis. The Ebola crisis inspired the creation of the long-awaited African Centres for Disease Control and Prevention (Africa CDC) to provide a pan-African infectious disease surveillance and response mechanism. It will also coordinate responses to pandemics across the continent. The experience from managing the Ebola pandemic created a crop of African specialist health workers who are being called upon to manage health crises in other parts of the world. For example, several Senegalese doctors with ASEOWA went to Brazil to help with the Zika virus outbreak. Several other ASEOWA health workers have also since been employed by international organizations. The Ebola pandemic was not just a health crisis. Its impact was felt in other fields, such as security, economy, immigration, and politics.374 These lessons are therefore critical in strengthening Africa’s capacity to prevent and be better prepared in managing emergencies in health and other sectors. Regional and sub-regional organizations such as AU, ECOWAS, and the Mano River Union play an important catalytic role in resolving different African problems, as they successfully did in the Ebola crisis, due to their convening power and ability to share experiences and leverage strengths amongst several nations. Availing more resources and strengthening the capacity of these regional organizations will enable them to perform even better. A UNDP report made this same observation with the conclusion that a “regional perspective could have greatly enhanced the effectiveness of the response” to Ebola. Some of the recommendations from the report included “joint investigation missions, sharing of best practices between bordering districts, and establishing a biosafety protection level four laboratory—the highest available—in the region.”375 One of the key lessons from the Ebola crisis is that there is no alternative to partnerships between public and private institutions in effectively protecting the general population from pandemics. This was illustrated by how Nigeria 216

responded to the Ebola crisis. The country relied on a range of state capacity options to deal with the challenge. First, it launched a coordinated approach involving 18,000 visits to 898 people linked to one initial infected patient and a nurse who had cared for the patient and travelled 500 km away. This focused tracing was enabled by access to phone records on private networks. Second, Nigeria drew from lessons learned from its previous efforts to contain polio and relied on the input and institutional arrangements created for the polio campaign. Lastly, the biomedical capacity at the University of Lagos teaching hospital managed to improve the completion of lab tests and make them available in 24 hours. These efforts were successful because of the coordination provided through state capacity and the key role played by committed public leaders in ensuring correct and timely decision-making. Nigeria, Uganda, and the Democratic Republic of the Congo were among the countries that sent hundreds of health workers to the Ebola-affected areas. While pledging funds has its importance, the most important part is to have medical workers on the ground, a case which was clearly articulated by Doctors Without Borders/Medicines Sans Frontières (MSF) in its rejection of Australia’s $2.2 million pledge. MSF argued that just a dozen trained staff overseeing local workers managing an isolation center could help find cases and implement outbreak control measures, saving thousands of lives. The point made by MSF was that building human capacity was more critical than just pledging financial aid, which they saw as an excuse by Australia not to join the fight against Ebola. The existence of such expertise is not sufficient unless there are organizations such as the AU and its regional arms that can help to provide the necessary convening authority and mobilization power. The importance of institutional complexity in expanding the possibilities for innovation is also illustrated by the case of Africa’s growing space sector. The area of space technology is another example where regional institutions catalyze cooperation by building on capabilities at different governance levels. African countries are increasingly recognizing that having space programs is essential for development. They still have to contend with the popular but misleading view that the programs involve sending vehicles and astronauts into outer space. This misconception has resulted in popular claims that Africa should focus its limited resources on funding activities such as food security, clean water, and improved health care. These claims often demonstrate the lack of understanding of the critical role that geographical information, satellite data, and communications capabilities play in the ability of countries to address development objectives. One example of such earth observation applications includes monitoring land-use change.376 The use of ecological data for development planning and management is rising, especially in light of the changing climate. Due to the high cost and the dual military-civilian nature of space technology, no single country or even region is able to implement space programs in isolation. 217

There are always facets that demand cross-border relationships and cooperation. Space technology-based activities such as communication, observation of natural resources, disaster management, and climate change observation also cut across national borders. The use of satellites makes it practically impossible to restrict communication or earth observation within national boundaries. The full cycle of space operations has different stages from sub-systems design, instrumentation testing, launch, operation, and tracking. All these different stages have different requirements that necessitate countries to cooperate until the entire cycle is completed. There are large variations in space technology capabilities among African countries, with South Africa being the most advanced.377 The capabilities are not evenly distributed, and they evolve over time.378 For example, only a small number of countries offer launch services. But the data from space systems is used widely far beyond the country running the mission. South Africa’s Stellenbosch University was the first institution of higher learning in the developing world to design and launch its own miniaturized satellite for training and commercial purposes. The Stellenbosch University Satellite (SUNSAT) was built by post-graduate engineering students and launched in 1999. The country did not adopt a space policy until about a decade later. This is another example where policy follows practice and builds on lessons learned from experimentation. South Africa is building on this pioneering record and is leading the continent’s efforts to promote space science and technology. The technological imperatives for cooperation drove the AU to create a continent-wide space policy, which was adopted in 2016. The most important policy issue, therefore, is not whether countries have satellites in space.379 It is whether they have built the requisite capacity on the ground to process the available data. The African space policy underscores the need for cooperation and sharing of infrastructure. The continent is structured into regions that share the same resources and hence have common priorities. This is why policies built to leverage regional cooperation are vital. The African space program aims at accelerating delivery of socio-economic needs through industrialization and capability development to tap into current and future novel technologies. The goal is to bring along each country to share enabling infrastructure, products, and services in a seamless manner. The approach also recognizes that not every country has the resources needed to develop its own space program. Regional cooperation gives every country the opportunity to share space assets, infrastructure, products, and services in different space programs at reasonable cost. This provides diverse skills, capacity, and political cooperation for both space-faring and non-space-faring countries to participate in developing the requisite infrastructure. However, it does not mean that relatively smaller countries cannot develop space infrastructure on their own. Such countries 218

can choose to invest in full development of space systems with the aim to export space products and services on commercial basis, thereby creating jobs, expanding industries, and opening doors for cash inflows. Another goal is fabricating space-related technologies for missions and downstream sectors. In this regard, the policy shares similarities with the evolution from science to the commercialization of space technology and services in India. 380 The African space program builds on prior collaboration in areas such as earth observation, communication, navigation and positioning, and space science and astronomy. Examples of such baseline activities include the African Reference Frame (AFREF) initiative that seeks to unify and modernize the geodetic reference frame in Africa and the Square Kilometre Array (SKA), which is a global baseline interferometry focusing on astronomy. SKA consists of an African node, which involves different countries (South Africa, Ghana, Kenya) working together. Another collaborative activity is the African Resource Monitoring Constellation (ARMC) which focuses on earth observation. ARMC was established by Nigeria, South Africa, Kenya, and Egypt to enable other African countries to share their infrastructure and data in an open manner in order to facilitate development. The Regional African Satellite Communications Organization (RASCOM) established in 1993 is an intergovernmental treaty organization that provides satellite capacity and services for national and international civilian telecommunications services via commercial arrangements. These services include direct TV broadcast services and Internet access in rural areas of Africa. RASCOM includes 45 of the 55 AU member countries. The African space program illustrates the extent to which the AU is playing its catalytic role to facilitate integration at the national, regional, and continental levels. It is also building on prior national and regional capabilities to create a basis for the next phase of technological advances in space technology. With the multi-level governance, it is going to be easier for Africa to accommodate the application of small satellites, especially micro-satellites, whose capabilities are exponentially expanding. 381 In addition, the expanded capacity in areas such as earth observation can also be extended to emerging technologies such as drones, especially in agriculture.382 The African space program is likely to strengthen the ability of the AU to represent its member states in international forums involving regional or global sharing of geographical information. The enhancement of the continent’s agency on science and innovation diplomacy is a new benefit of the regional integration. The ability of the continent to assert itself on the international stage would be significantly diminished if it relied on its members to individually try to represent the continent. Collective diplomatic agency is therefore an added advantage of the program that is only possible through regional integration. The existence of an African program does not, in this regard, compete with national or regional efforts. It enhances them by generating new diplomatic benefits. 219

8.4 Negotiating the Continental FTA The AFTA negotiations got off to a shaky start. It wasn’t until June 2017 that the negotiations concluded on and adopted modalities for the tariff and services liberalization. Even then, the adopted modalities still required more work on the scope of sensitive and excluded products, and resolution of a reservation made by a group of seven countries. With just six months left to the end of the year, it was generally felt that the timeframe of completing the negotiations and establishing AFTA by December 2017 was unachievable. There was optimism, though. The African Union Presidents had designated the President of Niger to champion the establishment of AFTA by December 2017. He hosted long meetings, some lasting four continuous weeks, aimed at fast-tracking and concluding the negotiations. He remained optimistic that the negotiations could be completed and urged the ministers to ensure the timeframe was met. AFTA negotiation modalities The negotiators agreed to include services in AFTA. Services already contribute, on average, 50% of the output of African economies. Modalities for negotiation of services in AFTA were adopted. They provided for negotiating schedules for specific commitments and regulatory frameworks in the sectors to be subsequently identified by experts in the technical working group on services. The priority sectors were agreed upon subsequently in July 2018 at the African Union Summit in Mali, after adopting the Protocol on Trade in Services on 21 March 2018 at the extra-ordinary summit in Kigali, Rwanda. While adoption of services modalities was fairly straightforward, modalities for tariff negotiations—i.e., negotiation of liberalization of trade in goods—raised a number of serious issues. Apparently rejecting the Tripartite FTA approach as not ambitious enough, AFTA negotiations adopted vastly differing modalities for tariff negotiations: agreeing to eliminate duties on only 90% of the tariff lines over a five- to 15year period and keeping 10% as sensitive and excluded products. The Tripartite version set an ultimate objective of achieving elimination of customs duties with 100% product coverage and with duties to be immediately eliminated on 60% to 85% of tariff lines upon into force of the Tripartite FTA Agreement. Duties on the remaining 15% to 40% of the tariff lines were to be eliminated over a 5- to 8-year period. In practice, Tripartite negotiations were in terms of which tariff lines would go into the 60% to 85% category and which into the other and were over the duration of the phase down period for given products in the 15% to 40% category. Of the tariff offers made in the Tripartite negotiations, the least ambitious was by SACU to the EAC, which aimed at eliminating duties on 63% of the tariff lines upon entry into force of the Agreement. Eventually, when the 220

negotiations concluded, SACU and EAC agreed to immediately liberalise about 66% upon entry into force of the Tripartite FTA Agreement, and to reach 90% liberalization over a five-year period. The offers by other countries were on the basis of the acquis of the COMESA and SADC FTAs, that is, extending the FTA treatment to the rest of the Tripartite countries subject to reciprocity. The COMESA FTA already had 100% product coverage on a duty-free and quotafree basis. The EAC, too, had achieved elimination of duties with 100% product coverage. The SADC FTA had achieved elimination of duties on more than 97% of the product lines. However, Angola and Ethiopia were not in either the COMESA or SADC FTA, and therefore would need to develop and make new offers. The Democratic Republic of Congo joined the COMESA FTA in 2015, though actual implementation was slow, and agreed to extend the COMESA acquis to the other Tripartite countries subject to reciprocity. On top of that, ECOWAS was a customs union since January 1, 2015, and had achieved its FTA following a long trade liberalization program, though there were numerous bans by some member states that needed disciplining. IGAD countries, apart from Somalia, were either in EAC or COMESA. Somalia, together with Tunisia, eventually joined COMESA on 19 July 2018. The AMU, CENSAD, and ECCAS were the remaining RECs that had made the least progress on FTAs and should have been the explicit focus of AFTA Modalities, prodding them to catch up with the others; and the others should have been requested to extend the market access they had achieved to the rest of the continent subject to reciprocity. The AFTA modalities could have reflected the additional areas for negotiations, such as non-tariff barriers, customs cooperation, health and technical standards, trade remedies, and dispute settlement, to complement tariff negotiations in light of the little progress in the other RECs in these critical areas. The Tripartite modalities had a section on the situational analysis for each of the three RECs, clearly setting out the progress made and the status of market access, which provided context and meaning to starting with or consolidating the acquis into the Tripartite FTA. However, the AFTA Modalities had no such section. The AFTA tariff negotiation modalities aimed for reduction of duties on 90% of the tariff lines over a five-year period for non-LDCs, 90% of the tariff lines over a 10-year period for LDCs, 90% of tariff lines over a 15-year period for a group of seven countries; the rest of the tariff lines to be designated as sensitive or excluded by each of the countries. Trade on excluded products would permanently be on the basis of Most-Favored-Nation (MFN) duties. Not to undermine the objective of boosting intra-African trade, it was agreed that an anti-concentration clause and disciplines would be negotiated, to limit the number of excluded products. Analysis by the UNECA had shown that 74% of intra-African trade took place on 51 tariff lines, that is, on less than 1% of total tariff lines.383 221

A concern in negotiating AFTA was the failure to explicitly build on the Tripartite FTA negotiations and the current market access in the three Tripartite regional FTAs. This could have been addressed by agreeing that the liberalization achieved in the regional FTAs would be part and parcel of the AFTA trade regime and that Tripartite countries would not be required to renegotiate tariff offers among themselves under AFTA. Though vigorously proposed by a number of countries, a few West African countries opposed it. Eventually, on the basis of the principle of acquis, countries in existing FTAs were at liberty notwithstanding the modalities to offer other African countries the levels of market liberalization achieved under existing FTAs. While there was reference to building on best practices in the RECs and a call upon them to improve their market opening, the clauses on sensitive and excluded products meant that countries could introduce new restrictions, especially as AFTA provisions on trade could end up taking precedence over conflicting REC provisions. The RECs that needed to improve their market openings were those that had not achieved functional FTAs, namely, AMU, CENSAD, ECCAS, AND IGAD but especially AMU, as countries in the other four had made some progress under other REC programs. The amalgamation of all RECs, and all countries into two categories of LDCs and non-LDCs, lost out on the variance in progress that could have recognized the fast-movers and prodded the others to catch up, thus fast-tracking the establishment of AFTA. The AFTA modalities provided that countries could exclude some products and designate others as sensitive. These two groups of products could reach 10% of the tariff lines of a country, that is, about 600 tariff lines or products. This approach was not largely consistent with the approaches taken in the REC FTAs on treatment of trade among the FTA members. For example, COMESA established its FTA on October 31, 2000. The FTA operates on a duty-free, quota-free, and exemption-free basis, with 100% product coverage. The COMESA trade regime doesn’t provide for exclusions. But like practically all trade agreements, the COMESA Treaty provides for prohibited products (such as drugs) and security and general exceptions. The COMESA FTA has a flexible safeguard clause, which member states can invoke in the event of economic disturbances following trade liberalization. Kenya, for instance, used a safeguard measure to protect its sugar industry from 2002 to 2018, as discussed in Chapter 7. In July 2018, the safeguard was extended for a further two years, that is, 2019 to 2020. The safeguard approach enables a country the flexibility to protect any of its industries that may need protection for the time being, rather than a straight-jacket exclusion list that might not take into account the dynamics of new or future products and industries that might need help in future. In addition, COMESA has an active Adjustment Fund, which member states may use to support implementing integration programs. Rwanda, for instance, obtained EU₏22 million to assist adjusting to the East African Community customs union. 222

There has been one exception in COMESA, though. When Seychelles joined the FTA, it asked to maintain MFN duties on about 200 products, providing a justification. The Ministers considered the matter and granted the request, to last for four years. Seychelles is a very small country, with a total population of a mere 95,000 people, settled on mainly four out of the 130 sparsely populated islands that make up the country. Fishing and farming are the mainstay of these local communities, while tourism and tuna are the predominant exports and sources of earning for the whole economy. On this basis then, Seychelles was given a special dispensation in COMESA to have a list of products on which to maintain MFN duties for a four-year period. Another dimension that should have been taken into account, in considering the matter of exclusions in the AFTA framework, was trade with major partners. On the whole, African countries import from China, EU, the Gulf, and US far more than they import from other African countries. Moreover, they import products from those third-party countries that are available in and can be sourced from other African countries. Each country should have undertaken its trade flow analysis to establish sources of its imports and the volumes or values, as well as its leading exports. A mapping of its industries to identify those that are actually viable and require protection would be helpful as well. With this information, evidence-based decisions could have been made on this matter. This meant that for purposes of addressing excessive or harmful volumes of imports that damage or threaten African domestic industries, it was imports from the rest of the world, rather than imports from other African countries, that should have been examined. Safeguard measures against imports from third-party countries were the appropriate response, rather than exclusion lists in intra-African trade. Should there be a provision for exclusion lists available to all countries, it would be possible for any country to identify products with high commercial value or of export interest from other countries and to put them on its exclusion list. This would obstruct the AU Summit decision on boosting intra-African trade. Another consideration was that regional and continental value chains should be encouraged. Eliminating tariffs on inputs into and products from these regional value chains could encourage them by making them competitively available in markets. An exclusion list that disconnected integrated production and value chains across countries would harm industrialization, economic transformation, and job creation. Therefore, caution was called for. In this regard, if there was to be an exclusion list, a narrow anti-concentration clause, carefully crafted, would ensure that regional value chains and intra-African trade were boosted and not obstructed. The anti-concentration clause could be a double-qualification 223

condition setting a low cap on volume of total imports and on the number of tariff lines under any chapter. The demands for exclusion of products as a protectionist intervention indicated that there were nascent industries that some countries hoped to develop. Industrialization should be a central focus of the Continental Free Trade Area negotiations. In the absence of a focus on deepening industrial development, Africa was likely to negotiate a hollow agreement that only helped to protect existing industries but hardly served as a driver of economic transformation as envisaged in Agenda 2063. Regional trade negotiations in the 20th century were dominated by the need to provide preferential market access to foster import substitution on a regional scale. This approach, however, is no longer a viable option for promoting regional integration in the 21st century. This is mainly because of the growing recognition of the close relationship between industrial development and regional trade. There has been a general tendency for African countries to look to the European Union as sources of ideas for their regional integration activities. The case of the rapid industrial development and regional integration among South East Asian countries offers more relevant lessons. The key shift in the approach was the recognition of the role that global and regional industrial value chains perform in regional integration. Evidence from South East Asian countries shows a clear focus on unilateral tariff reductions, creation of export processing zones, duty-drawback arrangements, and creation of sectoral trade agreements on issues such as information technology. Africa has a strong basis upon which to build a new regional trade regime. Two-thirds of the products Africa imports are available on the continent. They can be found in sectors such as agro-processing, minerals and natural resources, chemicals, leather products, textiles, household goods, and light and heavy manufacturing. Africa needs to build the required technological skills and resource capabilities for value addition and diversification through cooperation and sharing and pooling of training and innovation infrastructure. Many products in intra-African trade come from protected markets and low levels of technological advancement. As a result, there is a tendency for countries to want to put them on lists that preserve their current status. A value chain approach, however, would involve deeper industrial growth through specialization and technological advancement. A value chain approach that brings producers from different parts of the region to cooperate in manufacturing, through increased trade in inputs and measures such as joint ventures, will lead to regional expansion in trade in technology, goods, and services. Countries will, therefore, start to specialize in carrying out certain tasks which can be readily transferred to new categories of products. Africa can no longer limit its regional market by excluding products where there is potential for regional value chains. Doing so limits opportunities for 224

large scale production (utilizing economies of scale) and business development. The small size of businesses and the informality of much of Africa’s economies is a source of the lack of competitiveness and low level of technological uptake. In light of the above, African trade officials needed to view their nascent industries as starting points for industrialization and the creation of regional value chains. This would be a departure from the current tendency to seek to protect those industries, a move that stunts them. However, achieving this shift would require deliberate efforts by governments to pursue aggressive industrial policies that advance economic transformation. There is no substitute for state actions focused on fostering industrial growth and the associated infrastructure development that is key to the efficient functioning of value chains. The AFTA package A new, emergent Africa started off the year 2018 with bold initiatives addressing its fragmentation, low levels of trade, and the nightmare of traveling on the continent.384 Though the indicative deadline of December 2017 was missed, the Agreement establishing the African Continental Free Trade Area (AFTA) was signed on March 21, 2018, in Kigali, at an extraordinary summit of the African Union hosted by President Paul Kagame of Rwanda, which the African Union had decided at its summit on January 28, 2018, in Addis Ababa. It had to be done, for a new crop of African leaders wants to be taken seriously, and the promise of jobs and wealth creation meant that delay was not an option. The presidents also signed a Declaration Launching the AFTA. To the Agreement were attached a Protocol on Trade in Services, a Protocol on Trade in Goods, and a Protocol on Dispute Settlement. The Protocol on Trade in Goods had annexes on rules of origin, non-tariff barriers, customs cooperation, trade facilitation, transit trade, technical standards, sanitary and phytosanitary measures, and trade remedies. This was the AFTA Kigali package. The AFTA will progressively become a single market, building on the progress made at the sub-regional level. The delivery of the African Continental Free Trade Area; the establishment of the single African air transport market, beginning with 23 countries and covering over 70% of African air travel; and the conclusion of a protocol on free movement of persons (3 of the 12 flagship programs under Agenda 2063) combined was the first response that year to the remaining Afro-pessimists who continued to doubt the emergence of a new Africa that was determined to systematically achieve peace and prosperity under Agenda 2063. At a meeting in Niamey on December 1-2, 2017, a group of 13 out of 55 African ministers hashed out key outstanding issues to produce a framework Agreement establishing the AFTA that the presidents could sign, together with a protocol on trade in services. 225

Two quick points need to be made here. One is that the ministers were able to resolve nine critical issues around which the negotiations were stuck and, thus, paved the way for establishing AFTA. This demonstrated mature diplomatic skills and determination on the part of the African ministers—a feat global trade negotiations elsewhere in the world would envy, with the collapse of the WTO negotiations in December 2017. The other point, arising from the fact that only 13 ministers attended and decided to exclude the other delegations from their informal consultations, is that the process of negotiating AFTA had its fair share of ups and downs, especially when suggestions for corrective action or better ways forward were not received well by some of the protagonists. But communications improved, and focus shifted to making the best of what there was or remained to be done, while ensuring an inclusive, transparent, and rulebased process that garnered the required ownership right from the beginning. On this, Ambassador Albert Muchanga, the African Union Commissioner for Trade and Industry, made the aptly political observation that while everyone else was flocking to Africa to pursue trade and investment opportunities, African ministers were slow to attend continental meetings, but they hurried overseas in large numbers to events for engaging donors and other partners. Following the African Union Summit of January 28-19, 2018, in Addis Ababa, the African Union Commission planned a series of back-to-back meetings from February to March 2018, culminating in the extraordinary summit. The two months provided one last opportunity to finalize some critical outstanding issues that were pre-requisites for a functional free trade area. There were five critical areas to get right, if a credible African Continental Free Trade Area was to be signed and launched. It was understood, of course, that work on industrialization, agriculture, and infrastructure development would move ahead of—or simultaneous with—AFTA. A first overarching issue to immediately sort out was management of the negotiation sessions. Reports of some critical meetings showed that about half of the total number of agenda items were not considered due to time constraints, at meetings that lasted two to four continuous weeks. The chairing and secretariat functions were pertinent in avoiding distractions arising from mundane logistical and administrative issues, which resulted in angry delegates worried about where to stay, their allowances, and lack of documents. The chairing and secretariat functions also needed to help control unhelpful chatter or wrangling during the formal negotiation sessions. Respect would remain important. Endless off-topic interventions could be prevented through proper introduction of the agenda items and clearly setting out the issues for consideration and decision. Surprise sessions or documents that required fresh national level consultations in the course of the meetings could be addressed through better foresight and planning.


Second, the obvious mismatch between the political leaders and technical experts on what was feasible needed to be addressed. While experts suggested more time to complete the negotiations, political leaders wanted the AFT launched yesterday. Given that a number of issues still had to be negotiated, national consultations could assist to produce coherent positions owned by all relevant stakeholders. Equally important were realistic work plans that clearly sequenced out the outstanding work on the basis of which political leaders could make pragmatic decisions. Unrealistic work plans only resulted in disappointments and apparent embarrassment. The high ambition of the political leaders was founded on the basis that the decision to establish the AFTA by the indicative date of December 2017 was taken way back in 2012, giving an ample period of just over five years for the negotiations, taking into account that the free trade areas and trade programs of the existing regional economic communities (RECs) were to be the building blocs and starting points for AFTA negotiations. However, due to organizational challenges, the negotiations were launched much later in June 2015, leaving only two and a half years to meet the deadline. When the negotiations were launched, there was resistance to using the existing programs of the RECs to facilitate the negotiations. A third overarching issue related to finalizing the legal text for the Agreements. Technical work had been completed in a number of important and necessary trade-related areas, including non-tariff barriers, customs cooperation, trade facilitation, trade remedies, and technical and health standards. It was possible to formally adopt these instruments over an hour or so, if distractions were avoided in the meeting. Some negotiations still took place in the Negotiation Forum (NF) on text that the experts had finalized, which was the NF’s remit. However, outstanding technical work was still required to produce instruments on transit trade and guidelines for trade remedies. REC and Tripartite instruments were used to expedite progress. The Tripartite FTA had negotiated and adopted instruments in these two areas, drawing on good practices from around the world. A detailed protocol on dispute settlement was required before the AFTA Framework Agreement could be signed, unless the dispute settlement provision in the Framework Agreement were beefed up to cover consultation and negotiation for mutually agreed solutions and arbitration and to recognize the systems for addressing non-tariff barriers already agreed upon by technical experts. In this area, again, some RECs already had detailed instruments reflecting good practices from around the world. Some regional courts, for instance ECOWAS, COMESA, and EAC, had handled trade and trade-related cases and generated important jurisprudence. These REC provisions establishing courts and procedures could be drawn upon. The break-through was when the AFTA 227

negotiators decided to use the Tripartite FTA Annex on Dispute Settlement as the basic working document, which expedited finalizing the Protocol. Regarding services, the Protocol was mostly done except for a few provisions that needed updating in light of the agreement reached on institutional arrangements; but agreement was yet to be reached on the sectors where the countries would negotiate liberalization and regulatory instruments. Views ranged from taking all the 12 sectors, only nine of them, or selecting a few in which an African integrated services market could be established. Taking the experience of the RECs, the realistic option would be to select a few sectors to begin with, especially infrastructure services, and move into others progressively. Tourism, transport, communication, and financial services were sectors that a large number of countries had already opened up either autonomously or at the REC or WTO level. These four sectors, therefore, could be a starting point for an integrated African services market. It could be agreed, though, that in addition to the four sectors already named, countries could open up additional sectors. Education, energy, construction, and professional services were equally critical areas, for instance. Guiding criteria for selecting the priority sectors could include whether the sector was infrastructure and an enabler, a high growth area, or had been liberalized in the RECs. The African Union Summit in July 2018 in Mali eventually agreed on liberalizing five sectors: business, communications, finance, tourism and transport. The fourth issue was tariff schedules, which indicated the customs duties that would be charged on imported items originating from other African countries. The tariff schedules were required for a free trade area to function. But given that negotiations on tariff offers could take a while, especially if they were on a bilateral basis, and that some countries might not join the FTA right away, a transition arrangement could be agreed upon, recognizing variable geometry, reciprocity, and use of the acquis within the RECs. This would allow countries that were ready to immediately start implementing AFTA on its entry into force and others to come on board progressively through accession. Instead of protracted tariff negotiations, though, a better approach could be to use an agreed upon linear reduction formula, under which every country would undertake a commonly agreed percentage reduction on the customs duties over a period of time, say five years, to reach the target, in this case, 0% duty on 90% of the tariff lines of every African country. Combining this approach with a recognition of the existing functional and ambitious FTAs of the RECs would not require countries in those FTAs to reopen negotiations among themselves. Flexibilities on a case-by-case basis could be negotiated upon request, the foremost consideration being to boost intra-African trade and to industrialize through targeted interventions that actually grew given industries. Measures to this end included affordable and patient capital, market intelligence 228

tools, mentoring schemes and skills development, quality infrastructure, and harnessing of innovation and technology. In this regard, high protectionist tariffs might be applicable to imports from third-party countries using trade remedies and other mechanisms under the WTO, but it would be politically and economically strange to apply them to imports from other African countries in the context of boosting intra-African trade. It was noteworthy, too, that imports from third-party countries such as China were usually much cheaper, even after paying full taxes, than similar locally produced products. This was why high tariffs on intra-African trade would not quite address the problem of low industrialization in Africa. There would be some challenges sorting out which products would be sensitive or excluded, amounting to not more than 10% of the tariff lines or total number of internationally recognized traded products, which could come to 600 lines or products. This would be the weak point of AFTA, if countries ended up excluding the most traded products, notwithstanding anti-concentration disciplines to minimize exclusion of important tradeable products. Note could be made of the fact that there were inter-REC memorandums of understanding between the Arab Maghreb Union, COMESA, EAC, ECOWAS, and SADC. This quintet could be called upon to support and fast-track AFTA. It also showed the operational consensus already in place for inter-REC and continent-wide trade and economic integration. What was eventually agreed was that reduction of tariffs on 90% of product lines would be on the basis of a linear approach, while negotiations would take place on the sensitive and excluded products. The products to be negotiated would be the crux of AFTA. A fifth area was rules of origin. These are criteria used to determine in which country a product should be considered to have been produced. If the product is produced in one of the FTA countries, it gets the favorable treatment under the FTA. For instance, lower or no customs duties will be paid when the item is imported into another FTA country. The importance of rules of origin is that without them, trade cannot happen on the FTA terms, because there would be no system for sorting out which imports originate from other FTA countries. Apart from products that are wholly obtained (such as agricultural products, minerals, cement, and fuels—Chapters 1 to 27 of the World Customs Organizations’ Harmonized Commodity Description and Coding System (HS)), there was a sharp difference of views on whether to have general and flexible rules that apply across the board—in the form of minimum or maximum thresholds for local or foreign materials used in production—or to have product-specific rules that specified the required processing or working for each one of the six thousand or so products traded across Africa. In Africa, SADC uses the product 229

specific rules, while the other RECs on the whole use general rules, as well as change-in-tariff heading. The possibility of using wholly obtained, value-added thresholds for non-originating inputs or change-in-tariff heading allows options and flexibility for economic operators in planning production and sourcing of inputs. Experience showed that developing product-specific rules of origin could take years, for instance, in the Tripartite FTA negotiations. One might argue that going the product-specific route was a way of delaying or prolonging the process of ever getting to a functional FTA. In the Tripartite FTA, for instance, only 60.6% of product lines had been done by July 2018, after five years of negotiations. This meant that trade under FTA terms can only take place on these product lines and not on the rest. If general rules had been adopted, it would mean that all originating products could be traded on FTA terms. A practical way forward could be to recognize all the options (wholly obtained, maximum percentage for non-originating inputs, minimum percentage for local inputs, and change-in-tariff heading) and design the AFTA certificate of origin with all these options for users to select from, but with an exception that imports into designated (SADC) countries must comply with the changein-tariff heading criteria or agreed product-specific rules, which would be progressively developed. Another suggestion was that the model of the Arab FTA could be used, where general rules were used on a transitional basis only, giving way to product specific rules when eventually developed. A review could be undertaken after five years. Bearing in mind that it is private sector operators who choose which criterion or rule of origin to use for their consignments, the review could elicit some constructive feedback for improvement, if any. A key point on rules of origin is that they can become a major source of non-tariff barriers through a cumbersome system of issuing and authenticating certificates of origin. In this regard, a system of electronic certificates of origin, supported by active databases of producers and exporters available to customs and other relevant regulatory authorities, eventually moving towards selfcertification, should be considered. This calls as well for digitization of customs and trade facilitation instruments and procedures, supported by trade portals and single windows, to reduce document-, fraud- and time-based costs of doing business. Onlineand SMS-based systems for resolving non-tariff barriers should be immediate priorities for AFTA. The AFTA negotiations were characterized by a certain animosity and fear towards the Tripartite FTA. The negotiators were cautious when Tripartite positions or examples were given. The African Union Commission, supported by the Economic Commission for Africa (who served as secretariat to the 230

negotiations), at times seemed afraid that taking the Tripartite instruments and approaches would render them redundant, and sought to re-invent the wheel despite lessons and good practices painstakingly developed by the regional bodies. Over time though, and towards the tail end of the negotiations, it became impossible to ignore the good practices and instruments already developed in the Tripartite FTA, if the negotiations were to be concluded in time for the extraordinary summit scheduled for March 21, 2018, for signing the AFTA Agreement. Besides, there was evidence already that the annexes on nontariff barriers, customs, standards, and trade remedies had been negotiated with relatively much ease using the Tripartite instruments as starting points or working documents despite initial skepticism. The last-minute conclusion of negotiations on the Protocol on Settlement of Disputes in December 2018 in one week, using the Tripartite Annex on Dispute Settlement as the working document, was further evidence of the propriety of using Tripartite instruments and good practices. It could have helped that these instruments were prepared by experts in technical working groups, who interacted as experts open to using available best practices and technically sound provisions, rather than senior officials. The balancing act between technical expertise and political or vested industrial interests seemed difficult at the senior official level, which complicated the negotiations handled at that level, such as the modalities and provisions for tariff liberalization, as well as the institutional set up of AFTA. At the high political level, it was fairly straightforward that AFTA had to be concluded and launched the soonest possible. 8.5 Financing the African Union Financing the activities of the AU has always been a major challenge for the organization. Much of its budget has come from donor agencies. This has made the AU look like a continuation of the same post-colonial relations it is seeking to break away from. At worst, sections of the AU Commission have looked like implementing outposts of donor-funded projects. This has prompted African leaders to start exploring alternative ways to generate AU funding from African sources. The novel approaches used to address the Ebola crisis illustrate that alternative sources of funding for African programs are possible and can be achieved through concerted effort. Indeed, the African Union in July 2016 adopted a decision for funding its peace and security and integration programs through a levy on customs duties collected by member states. In July 2016, the African Union tasked President Paul Kagame of Rwanda to look into the issue of reforming the African Union in light of the aspirations of Agenda 2063 to achieve a free, peaceful and prosperous Africa. He formed a task force, and as a team, they proposed important improvements.385 The 231

proposals were based on the following findings: lack of implementation of the numerous AU decisions; the AU was far removed from the citizens and had limited relevance to them; the AU had numerous incoherent work programs; overdependence on donor funding; poorly functioning institutions due to unclear mandates and low funding; low managerial capacity in the institutions; lack of accountability for performance and delivery; unclear division of labor between member states, the AU, and regional bodies and mechanisms; and inefficient working methods in the intergovernmental processes, including the meetings. These findings are also relevant for various African regional economic bodies, and therefore, the proposals for reforming the African Union could equally apply to the RECs. In some cases, however, the African Union could learn lessons from how the RECs have addressed some of these challenges. On the basis of those findings, President Kagame made four proposals, namely, calling for a refocusing of the AU on key priorities, realignment of AU institutions to the priorities in a results-based manner, efficient managing of the AU, and financing of the AU “ourselves and sustainably.�386 He then detailed some recommendations for actions required for each of the four proposals. On the first proposal, he recommended that the AU focus on priorities that are continental in nature, such as peace and security, political affairs, regional integration, and diplomatic agency in international forums and around the world. Africa’s security, governance, economic, and diplomatic priorities remain relevant as it tackles challenges of socioeconomic transformation and of rallying the international community to its cause. As the framework for engaging the rest of the world from a point of strength, or on the basis of common African positions, the AU has already proven its worth, and it is widely recognized in the world as the interlocutor for Africa. On realignment of AU institutions, he recommended that the senior leadership of the AU Commission should be lean and results-oriented. He also called for an evaluation to establish the right size and required capabilities of the Commission and an audit of the bureaucratic processes that might cause inefficiency. Jointly with this, he recommended that the New Partnership for Africa Development (NEPAD) should be fully integrated into the AU Commission, the African Peer Review Mechanism should be strengthened, and the role of the two AU courts and the Pan-African Parliament should be clarified. The African Peace and Security Council should be reformed by streamlining its membership in line with its constitutive protocol and its working methods and by strengthening its role. The role of the AU Permanent Representatives Committee should be clarified and limited to facilitating communication between the AU and the capitals and advising the ministers, rather than supervising the AU Commission. Finally, only those Specialized Technical Committees covering the new focus areas should be maintained. These recommendations recognize the critical role of AU institutions, for efficiency at this level can greatly drive the regional integration programs. 232

To promote relevance of the African Union, there should be quotas for women and youth in all institutions; there should be common services, such as technical platforms, to support data and analytical work for development; and the African passport should be made available to all citizens. To promote efficiency, the AU summits should not deal with more than three critical issues, and there should be one full summit every year. A second summit should be dedicated only to coordination among the regional economic communities and the AU, with participation limited to the bureau, the chairpersons of the RECs, and regional mechanisms. Other matters should be delegated to the ministers. The summits are typically not more than two days, yet they usually generate decisions across the whole range of the multifarious programs. In effect, the presidents hardly discuss those decisions, except one or two on sensitive political matters like conflicts. For summits with partners, Africa should be represented by the heads of the regional economic communities, the chairperson of the AU Commission, and the current, outgoing, and incoming chairpersons. Partnership summits have been attended by large numbers of African presidents, and in some cases, African presidents have queued for bilateral meetings with the hosts. Continuity requires a bureau system where the next chairperson is elected at least one year in advance. This system works in COMESA, EAC, and SADC and serves as a training and transition system. Also, the sanctions mechanism needs to be strengthened so that member states who don’t implement the agreed decisions don’t participate in summits. Such an approach has proven to be effective in SADC. President Kagame recommended that, to improve the operations of the AU Commission, the Deputy Chairperson and the Commissioners should be competitively recruited and appointed by the Chairperson to whom they should report. The Deputy Chairperson should be the Chief Operations Officer of the Commission. Also, the staffing needs of the AU Commission should be reviewed. The ECOWAS Commission was established to replace the secretariat and the COMESA, SADC, and EAC secretariats have been restructured a number of times. Experience shows that this can be a protracted process. The AUC, however, already went through this experience in the period of 2000 to 2002, when the OAU was transformed into the African Union, and the Commission was established to replace the Secretariat. On financing of the AU, he observed that donors provide 97% of the required funds and posed the question, “How can member states own the African Union if they do not set its agenda?”387 He proposed immediate implementation of the Kigali financing decision, which called for a contribution from the customs duties collected by member states to the AU budget, a revision of the formula for member states’ contribution to the AU budget, and the formalization of the Committee of Ten Ministers of Finance, established for the AU financing 233

decision, into an oversight committee for AU budget and finances and to reform AU financial rules. Donor dependence has hobbled practically all African institutions, but ECOWAS stands out as an exception. It established and operates a community levy system, which yields about US$630 million annually to fund its regional integration programs. Hopefully, the AU will be able to follow the ECOWAS example. To underpin this change process, President Kagame recommended the establishing a high-level panel of presidents to supervise the progress, establishing the change management unit in the office of the chairperson, and adopting a legally binding mechanism for ensuring implementation of AU decisions. Such leadership will be absolutely required to see this through. 8.6 Conclusion Tripartite FTA negotiations covered a number of areas, which many AFTA negotiators wanted to learn from, build upon, and improve, though initially a number of negotiators from West Africa were skeptical or cautious. The areas included opening of markets for trade in goods and services, rules of origin, customs cooperation, health and technical standards, nontariff barriers, trade facilitation, transit trade, trade remedies, and dispute settlement. Accordingly, the AFTA negotiations had agenda items for presentations by the secretariats of the regional economic communities on key issues and areas, although the REC secretariats did have to fight for this space and were lucky to have the overwhelming support of many government negotiators. Regional economic integration in Africa derives from and reflects the right to development through the raison d’être of the regional economic communities and the African Union, as set out in the constitutive instruments, and through the design and implementation of programs in a wide range of areas critical for socioeconomic development and protection of the environment. The developmental challenges on the ground have propelled Africa toward regional economic integration as the overarching development strategy that provides a framework for mobilizing key actors in the public and private sectors and for maximizing resource use and opportunities. Through integration, shared challenges of small markets and inadequate investment and infrastructure are being addressed, with a goal for improving people’s living standards and ensuring sustainable development. Going forward, it will be useful if the right to development explicitly informs the design, implementation, and monitoring and review of regional economic integration programs in Africa. This will situate the programs in the context of the right to development and mainstream them into the global development agenda.


9. Governing economic complexity 9.1 Transforming economic structures 9.2 Financing industrialization 9.3 Governing uncertainty 9.4 Lessons learned 9.5 Conclusion Over the last 50 years, Africa has devoted considerable diplomatic effort toward creating the catalytic institutions needed to advance its overall agenda of economic transformation through regional integration. A large part of that transformation involves shifting from dependence on raw material exports to a more dynamic economy driven by innovation. There are two questions that arise from this phase in the integration process. The first is how to foster the structural transformation needed for Africa to pursue alternative development pathways. The second is how to manage the growing institutional complexity arising from the integration process. This chapter looks into the future and explores those two themes by identifying new pathways for transformational development. 9.1 Transforming economic structures The creation of catalytic institutions is just the first step. The next main issue is figuring out where the sources of economic transformation will come from. Africa’s rapid population growth of 2.55% per year is emerging as a key global policy theme. More than half (1.3 billion) of the (2.4 billion) people added to the global population by 2050 will be in Africa. By 2050, Africa will be adding 42 million people per year, bringing the total population to 2.4 billion, double its current size.388 This is the equivalent of adding today’s population size of Sudan to the continent annually. Africa has a relatively young population, with a median age of 19.4 years, compared to a world median age of 29.5 years. There are major variations in the age structure of African countries. South Africa has the highest median age of 20 years, while Niger is the lowest at 15.1 years. This age structure compounds 235

the dependence problem with a small section of the adult population being expected to support a large youth population with limited skills and employment opportunities to contribute to household income. These demographic dynamics have two important implications for Africa. First, unlike in other regions of the world, there has been no demographic dividend associated with the population “bulge.” Poverty is still the norm despite high economic growth rates in some of the countries. Second, the patterns of urbanization in Africa are not associated with significant reductions in pressure on rural areas, and as a result, they have not offered an ecological dividend.389 This is the context in which Africa has sought to reframe its development strategies and focus attention on the role of technological innovation in economic transformation. The African Union’s ten-year Science, Technology and Innovation in Africa Strategy (STISA-2024) seeks to reposition Africa as a technology-driven economy and move away from supplying raw materials for the global economy. To resolve the tension between mineral dependency and innovation, policymakers stress the importance of adding value to natural resources. African states should try to get the best possible deal for their resources and often this will involve adding value to their resources in-country. At present, the continent’s commodity systems not only suffer from enormous illicit financial flow leakages, sucking money out of the continent and away from government treasuries, but also tend to engage in the least profitable end of the value chain. For example, in 2014, Africa exported US$2.4 billion of coffee. Germany, which is not a producer but a processor, reexported nearly US$3.8 billion worth of coffee worldwide. The standard response to the disparity is to call on Africa to add value to its coffee. To do this, African countries must build the required technological capabilities as specific and deliberate interventions. Value addition, however, should not be the primary model for industrial diversification. To give it that focus would be to ignore lessons from economic history and from tariffs imposed on African exports by trading partners. For many of African states’ largest export markets, the tax charges are higher when the product is more refined. Therefore, it is expensive for countries to add value to their exports, unless they can convince trading partners to give them more beneficial terms or find new trading partners. Reducing or removing tariff barriers would not automatically lead to value addition in producer countries. Raw material exporters would need time to build up complementary industrial processing capabilities. The temptation under such conditions is to enter into joint ventures with importing country companies or to encourage them to set up processing capabilities in the exporting countries. These policies may be successful, but they may also give too much away to those foreign companies, especially if the policy is erroneously seen as the route to industrialization. 236

There is little evidence to suggest that countries industrialize by adding value to their raw materials. Rather, the causality runs the other way—countries add value to raw materials because they already have the complementary technological capacity to do so.390 In fact, commodity booms are often a consequence of policy incentives, improvements in exploration technology, and investment in commodity-related public research.391 Africa’s traditional focus on its minerals has caused it to lag far behind in such efforts. The problem is more profound than it appears. There is a common view that industrialized countries advanced largely because they exploited low-cost natural resources from their African colonies. Those holding this view then make the logical leap that they too can industrialize and grow by making use of their natural resources. But a review of the role of raw materials in the history of countries such as the United States, Canada, and Australia does not support the argument.392 African nations have the benefit of being latecomers. The world is full of inspirational examples they can learn from. In fact, many of the countries that have recently transitioned to being learning economies started off with significantly fewer resources (in terms of finance and research facilities) than the majority of African countries have today. Take the case of Taiwan. In the early 1960s, the country was a world leader in mushroom exports. When dealing with such a high-volume, low-value, perishable export commodity, the prospects of industrial learning are quite limited. In fact, Taiwan transitioned to become a semiconductor powerhouse only by redefining itself as a learning economy. Taiwan’s Industrial Technology Research Institute, which spawned many of its leading semiconductor firms, was created by consolidating four dilapidated research centers left behind by Japanese occupiers.393 The institute was not created to add value to mushrooms, but instead it was a focal point of the country’s policy decision to reinvent itself as a learning economy. The case of Taiwan illustrates how economic diversification results from the initial use of existing technologies that can be readily combined to generate increasingly diverse products. Some technological capabilities generate more combinations than others. Semiconductor and chemical industries are examples of such a platform of generic technologies. Raw materials appear to have high value but are hard to use in creating economic development. This is like using revenue from raw materials to acquire technological capabilities that have higher recombinant value. Industrial development involves considerable learning, not just about letters but also about vocabulary and strategies for thinking about creating new words. The fundamental point here is the ability to create new industrial combinations.394 Emerging technologies Exponential technological growth and diversifying the application of emerging technologies has expanded the possibilities for Africa to experiment 237

with new innovation-led development strategies. Technologies, such as solar photovoltaics that are suited to the geographical location of the continent, historically appeared to be out of reach because of their high prices. The rapid fall of solar prices expanded the adoption of the technology, making it accessible to isolated communities in Africa.395 Its use is also expanding in other critical areas, such as water pumping for irrigation. But in all the cases involving emerging technologies, the focus is usually on providing services such as energy and telecommunications, rather than on using the technologies to seed industrial development. For example, information and telecommunications technologies serve as essential motherboards for other industrial activities. There are many other relevant emerging platform technologies. For example, the rise of 3D printing could do for Africa what semiconductors did for Taiwan in the 1960s, for several reasons. These include ease of use and mobility, because the printing process is controlled by software and dispenses with the cumbersome mechanical parts found in traditional manufacturing. Second, the majority of this software is open source and available online. Third, 3D printing is additive rather than subtractive, meaning it starts small and builds up to the final product instead of starting big and being refined down to the final product. 3D printing is also more ecologically friendly than traditional production, thus wasting less energy and resources. 3D printers can also produce spare parts, reducing the need for extended industrial supply chains. Finally, the technology allows users to be producers, or at least have a far greater input into production. The possibility for highly creative communities of creators or makers to drive the innovation process is significant. In addition, the expiration of critical 3D printing patents has resulted in explosive growth in the sector, estimated at 23% per year. This has also driven down the cost of 3D printers significantly. The world market was worth about US$2.5 billion in 2013, and its value was projected to exceed US$16 billion by 2018. 3D printing in metal is growing twice as fast as the rest of the industry, signaling the growth of the technology’s industrial applications. Another emerging platform technology relevant to Africa is genetic engineering. So far, the role of this technology has been discussed in the narrow context of genetically modified (GM) foods. The intensity of the controversies surrounding the issue, however, has blinded African countries to the benefits of acquiring and applying the same techniques in fields such as the development of vaccines and drugs against emerging infectious diseases. Building platform technologies can benefit from the export of raw materials, if countries mandate, for example, that a percentage of the revenue should be directed toward developing new technological capabilities. Some of these might be related to value addition only as a starting point. Africa can shift its thinking from a narrow focus on raw materials to a broader one that encompasses the technological capabilities that underlie all economic 238

activities. This approach will also require greater cooperation between the private sector and knowledge-based institutions such as technology-oriented universities and research institutes. More importantly, it will take concerted efforts to expand the base for training young Africans in practical fields such as engineering and entrepreneurship. Infrastructure and technological development Typical infrastructure concerns focus on rates of return on investment, impact on public finances, formation of private-public partnerships, and identification of sources of funding. Other concerns, especially from civil society organizations, stress the environmental and social costs of large infrastructure projects. Although they may differ on implementation strategy, policymakers understand infrastructure investment’s role in stimulating economic development. The strategic connections between infrastructure investments and technological innovation, however, are less appreciated. Infrastructure projects are inherently technological in nature. They represent bundles of scientific and technical knowledge embodied in both equipment and human capabilities. Taking full advantage of infrastructure’s technological potential requires a more sophisticated approach to policy, procurement practices, and project design. The first step is recognizing the magnitude of the challenge and the associated opportunities. The African Development Bank has estimated that Africa will need to invest US$93 billion annually over the next decade to meet its infrastructure needs. The estimate for Nigeria alone is US$15 billion a year. A large part of the necessary investment will come from overseas, as is evidenced by China’s investment in African infrastructure projects, mainly in transport. The recent creation of the China-led Asian Infrastructure Investment Bank (AIIB) will strengthen the country’s role as a source of funding not only for Africa but also for many other regions of the world, including in the industrialized countries. China’s investment in African infrastructure will be discussed later. In addition to supporting economic activities and generating employment, infrastructure projects serve as bundles of technological stocks and reservoirs for engineering capabilities. The development of geothermal energy in Kenya, for example, has also resulted in the creation of a large pool of experts working in Kenya and other countries. These types of infrastructure projects offer Africa a unique opportunity to build the necessary engineering and managerial capabilities for their design, construction, and maintenance. In addition, the projects can also be used as a basis for designing new engineering courses and research activities. Large projects are often associated with the spread of corruption. This may be true, but the problem is worsened by the use of batch models that often result in supplying faulty equipment. This is often because the separation between 239

construction and maintenance eliminates the need to agree on technical specifications for the supply of spare parts. The outcome has been a continent that is dotted with decaying infrastructure. Some of the contracts on the supply of equipment restrict local firms from sharing technical information on plants until a certain period after they start operating. This makes it hard to identify local or low-cost sources of spare parts. A large part of the problem is reliance on procurement procedures that focus on awarding contracts to the lowest bidder. To win in the competition, construction firms look for places to trim their budgets and maintenance is usually an easy target for cuts. In many cases, maintenance is subjected to separate contracts altogether. Decaying existing infrastructure and changing climate has made it urgent to rethink procurement rules. More technical consideration needs to be given to the need to build infrastructure that can withstand shifts in rainfall, temperature, sediment transportation, and humidity. Hydro-power dams, for example, face great uncertainties from projected shifts in rainfall. Coastal infrastructure projects are also likely to be affected by rising sea levels and will need to use different design criteria that incorporate the risks of corrosion and other ecological impacts. Other design criteria might include the use of modular systems that allow for ease of replacement. The batch infrastructure management model is not just costlier in the long run, it is unsuited to a world made more uncertain by climate change. Batch model infrastructure and procurement rules that favor the lowest bidder have given low priority to infrastructure maintenance. The World Bank, as indicated, has projected that the continent will need to invest US$93 billion annually over the next decade to meet its economic needs, of which a third will be for maintenance.396 Much of the infrastructure construction in Africa today is done by Chinese firms. It is unclear whether and how many of such projects include sufficient long-term maintenance plans. The failure to incorporate such plans could result in monumental failures that could tarnish the image of AfricaChina cooperation. One way to shift from a batch model to a continuous approach is to explicitly incorporate technical knowledge generation into the initial project design. This can be done by either adding research facilities onto infrastructure projects or linking them to existing institutes and engineering schools in national universities. A common argument used against such linkages is that local universities lack the capacity to contribute to such projects. The real issue is that procurement procedures do not provide for the incremental acquisition of competence and as a result, tend to favor foreign firms. But where local people are included in contracts, they usually include experts from universities. Though not unusual, the practice of adding technical units to infrastructure projects involves different procurement procedures that emphasize industrial 240

technological learning. When South Korea built its first high-speed rail, it also created the Korea Railroad Research Institute in 1996.397 Over its short period of existence, the institute has become a world leader in transportation science and technology. African universities learn to innovate The role of African universities in economic transformation has been one of the most debated policy issues on the continent. This is mainly because the postcolonial universities were created to train functionaries for the public service, so they were more aligned with government than industry. They also did less research, because that task is generally assigned to national research institutes. But African universities are slowly shifting their programs to accommodate entrepreneurial activities. In a refreshing departure from traditional African higher education roles, the University of Nairobi announced in 2016 that it was setting up a US$1 million fund to support business start-ups created in partnership with firms such as Safaricom Ltd., the telecoms firm that also operates a venture capital facility. The announcement follows more than a decade of efforts by a small number of professors working to partner with the private sector or to turn their ideas into commercial ventures. However, these efforts went against the dominant role of African universities as teaching institutions. In most African countries, research is the preserve of national institutes, while product commercialization is left to the private sector. The functional separation is often enforced through incentives and restrictions imposed on the different actors. Professors, for example, spend most of their time teaching. They have little time left for research, even if they have access to funding. The inclusion of entrepreneurial activities in African universities represents one of the key shifts in higher education policy and practice in recent decades to reflect trends in adjustments in universities’ missions.398 Only a decade ago, a suggestion to include such activities to the regular functions of universities was not just frowned upon but, in some cases, furiously challenged. More recently, however, universities are proving more willing to expand their missions to include developmental functions. There are at least five reasons that explain this shift: natural incubation functions of universities and the rise in inspirational models; reforms in overall development policies; growing university autonomy; changes in the labor markets for graduates and an expanding alumni base; and global learning from experiences in other regions. Universities are natural incubators of students, ideas, and novel institutions. This happens despite formal statements about adherence to classical missions. There are many examples of African firms that were informally incubated by universities. An archetypical example is Zamnet, an internet service provider that was incubated in the Physics Department of the University of Zambia in the early 1990s before becoming a separate entity.399 241

Over time, universities have increasingly become sources of many ideas, especially in fields such as energy, agriculture, environment, telecommunications, human health, and community engagement. Many of them simply withered on the vine due to lack of funding, but those that flourished showed the versatility in universities that could not be associated with statements about adherence to traditional teaching missions. Labor market changes also become a powerful signal to universities. The initial mission of post-independence universities was to train civil servants. By the 1980s, it became clear that public services could not absorb the growing number of university graduates. The private sector was still nascent, and there were no strong reasons for universities to adjust their training accordingly. Today, the private sector is a growing employer. The final influence on policy change has come from global learning. African universities have historically looked to Europe as a reference point for their missions. Over the last two decades, European universities have been gradually expanding their missions and exploring how to engage with the private sector. But more importantly, as Africans more recently started to look to Asia for new development ideas, they also started to learn about the entrepreneurial role of universities in countries such as China, South Korea, and Malaysia. The pressure on African universities to diversify their missions will also be driven by a rising population and a growing demand for higher education. The increase in the number of universities provides opportunities to diversify university missions. Coupled with autonomy, this should result in the emergence of higher education systems that are more responsive to local needs. In the first few decades following independence, universities strictly followed government policy. Current developments suggest that the time has come for governments to adjust their policies by learning from experiments underway in universities across the continent. The ultimate teaching function of universities would be to become centers of innovation. To become centers of innovation, universities must shift their focus from civil service and even from private-sector business practices to a new focus on engineering and infrastructure management. By training engineers, universities will solidify their link to the budding infrastructure and technology industry and give their graduates the tools and education they need to enter this new job market. Africa wants to boost its economy by incorporating technology and better infrastructure, but to do so will require a large pool of appropriately trained engineers to help with the design, construction, and maintenance of infrastructure. It is the routine maintenance and additional construction that will require significant and timely creation of local capacity, which the universities can provide by offering engineering programs. This also includes entrepreneurs who can identify business opportunities associated with new infrastructure 242

projects that will contribute to sustained economic development and the spread of prosperity. Strategic measures to build capacity Much of the technological knowledge needed to sustain Africa’s economies is available in the public domain. Access to such knowledge is not limited by intellectual property but by lack of engineering capacity and limited incentives for enterprise development. At face value, Africa’s engineering challenges are daunting. Leading economies such as South Africa and Nigeria suffer from critical worker shortages that are worsened by international skills migration. It is estimated that South Africa loses nearly as many engineers through migration as it trains annually. Worse, no African country maintains reliable records on training and deployment of engineers. However, this situation can be helped by training engineers at universities. There are a few strategic measures that the countries can use to ramp up their capacity. First, African countries, as well as cities, need to demonstrate the critical role that infrastructure plays in entrepreneurship and development. The most inspirational opportunity today is making broadband more accessible and affordable to young entrepreneurs. In fact, in terms of importance, broadband access should fall in the same category as transportation networks. Indeed, some African cities have begun providing free Wi-Fi to stimulate entrepreneurial activities. Such experiments are underway in Kenya, Nigeria, Rwanda, and South Africa. Second, specific measures must be adopted to expand engineering training. African countries will need to supplement traditional university departments with novel approaches that include upgrading training institutes to offer certified engineering training, strengthening engineering training within private and public enterprises, and forging stronger international education partnerships. Third, all major infrastructure projects should include specific engineering education objectives as part of performance. Expansion of telecoms infrastructure should include support for new electronics engineering schools. Examples of such efforts include the role of telecoms ministries in creation of new technology universities in Egypt, Ghana, and Kenya. Similarly, ongoing infrastructure corridors such as the one connecting Kenya to South Sudan and Ethiopia provide a foundation for engineering education. Mining operations on the continent should also serve as foundations for building capacity. Such investments will pay off in the long run through reducing maintenance costs. Fourth, African governments need to revise their procurement project tendering systems so that they focus on more than just lowering the cost of project design and construction. Smart procurement practices should specifically provide for engineering training and involving local engineering firms in all 243

stages of project implementation, thus allowing for local learning. Again, one way to achieve this is to include local universities and research institutes in infrastructure projects. Fifth, armed forces are one of the most important sources of engineering capacity. Carefully designed programs could help repurpose sections of the military to support infrastructure construction. To do this, the military will need to strengthen its own internal engineering capacity. Engaging the forces in civilian projects is not new. What is important is to clarify the lines of accountability and design strategies to foster better cooperation with civilian agencies. Finally, these measures will require presidential champions. This is reflected in the Agenda 2063 of the African Union, which shows that there is growing consensus among African countries on the importance of infrastructure in development. 9.2 Financing industrialization One of the challenges facing African countries in their aspirations for structural transformation is how to finance industrial development.400 The role of finance in emerging economies’ industrial transformation was a central theme in Schumpeter’s classic book, The Theory of Economic Development.401 Schumpeter argued that credit was critical in the early stages of industrial development.402 His analysis focused on banks as catalytic institutions that provided the credit needed by those involved in innovation, which he defined as the transformation of the economy through introducing new combinations. He views banks as a special kind of institution that performed specific functions in emerging economies.403 To him, the “banker stands between those who wish to form new combinations and the possessors of productive means. He is essentially a phenomenon of development, though only when no central authority directs the social process. He makes possible the carrying out of new combinations, authorizes people, in the name of society as it were, to form them. He is the ephor of the exchange economy.”404 Schumpeter’s view of the role of banking in fostering industrialization reflects the conditions that prevailed when Europe and the US were emerging economies.405 However, the role of banks in financing industrial development has gone through a number of changes since Schumpeter’s time. One explanation for the change is the reluctance of incumbent industries to support financial development because it breeds competition. But opposition will be weaker when an economy allows both cross-border trade and capital flows.406 This political economy interpretation is not the only reason for historical shifts in the banks’ role as catalysts of industrialization.407 However, it provides an entry point into exploring how regional integration in Africa could create new opportunities for emergence of roles for the banking sector. 244

The general view is that local banks are too risk-averse to finance industrial projects, except in proven technologies for less uncertain markets. Banks are viewed largely as mechanisms for allocating capital, screening firms, and monitoring corporate activities.408 The lending activities of most banks are limited within national boundaries. They often operate under strict national laws that reduce their ability to expand operations into new areas, especially those that involve new technologies. The solution to this problem may lie in the catalytic role of regional integration efforts that signal the emergence of large markets. Historically, banks acted as catalysts for industrialization in Western Europe and the United States. Evidence from the early role of banks in select countries such as Belgium (1830-1850), Germany (1850-1870), and Italy (1894-1914) shows that banks “will only play a catalytic role if they are sufficiently large to invest in a critical mass of firms. And they need to have enough market power to recoup the cost of mobilizing the critical mass.”409 The cost of mobilizing the critical mass of firms was reduced in cases where banks owned equity. “The intuition is that equity allows banks to participate in the value they create by mobilizing the critical mass. This leads to the additional prediction . . . that universal banks will find it easier to promote investments in new industries.”410 In the Unites States, the “passage of the National Banking Acts (of 1863 and 1864) stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. These new banks concentrated in the area that would eventually become the Manufacturing Belt.”411 Evidence “shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing and the nation’s sudden capital deepening. The entry not only resulted in more manufacturing capital and output at the county level, but also more steam engines and value added at the establishment level.”412 The structural transformation of the United States involved the use of new production techniques and technology developed by workers in locomotive works, iron foundries, and textile mills.413 Prior to that the “industrial sector was composed of shops that hired small numbers of laborers to handicraft the product. The few mechanized shops used water power which constrained their location and limited production throughout the winter months.”414 These industrial activities were concentrated in the Northeast of the United States. It was the rapid entry of new banks following the legal reforms that made it possible for industrial investments to spread to the manufacturing belt. This was aided by the existence of transportation infrastructure that facilitated the movement of raw materials and finished products. Despite the differences with contemporary Africa, many of the challenges of expanding industrial output and promoting structural transformation are similar to those that prevailed in the early history of Europe and the United States. The 245

signal of larger and growing markets provided incentives for the expansion and consolidation of banking services, which increased the capital available for industrial investment. It was not the expansion of industries that resulted in capital accumulation; it was the expansion of financial services that resulted in industrial development. This early role of banks as catalysts for industrial development in emerging markets deserves special attention when exploring ways to transform the structure of African economies. The role of finance has been an integral part of the evolution of COMESA. COMESA’s financial arm, the Trade and Development Bank (TDB), was established in 1985 with a mandate to provide financing for trade, infrastructure, and enterprise development. Initially known as the Preferential Trade Area (PTA) Bank, the TDB has a footprint in 20 countries and has disbursed over US$12 billion to member states in both trade and project finance over the last three decades. Its current balance sheet stands at about US$4 billion, and TDB has been instrumental in financing the development of key production areas in African economies such as Africa’s industrial sector. TDB helped spur regional trade by focusing on increased production in Zimbabwe, particularly since the dollarization of its economy in 2009. TDB has availed more than half a billion dollars to Zimbabwe to support its industrial sector, with a focus on spurring the nation’s economic recovery and development. Since 2000, Zimbabwe’s economy has been declining, characterized occasionally with periods of increased rapid decline and hyperinflation. Amidst its struggling economy, Zimbabwe has instituted a series of measures to deal with its hyperinflation and spur economic recovery and development; one of these measures was the dollarization of the economy in 2009. Since the dollarization of the economy, TDB has been an active financial partner, and one of the few international financiers that supported Zimbabwe’s quest for economic recovery and development. As part of this support, TDB has injected 51% of its portfolio, or US$536,360 million, into the Zimbabwean economy, supporting over 30 projects across all sectors of the economy, encompassing manufacturing, information and communications technology, financial services, hospitality, and energy. By committing 51% of its portfolio to the manufacturing and heavy industries sector, TDB seeks to equip these sectors with affordable financing that will create more jobs and ultimately promote economic development in line with Zimbabwe’s economic blueprint, the Zimbabwe Agenda for Sustainable SocioEconomic Transformation. TDB, which is a multilateral treaty-based financial institution, has implemented this support by disbursing credit facilities to the Reserve Bank of Zimbabwe, CBZ Holdings, and other financial institutions for on-lending to various clients in the productive sector. 246

Cement maker PPC Zimbabwe secured about US$75 million to expand its operations, which will allow it to increase its exports to Zambia, Malawi, Mozambique, and other countries in the region. ZESA Holdings’ power generation unit (the Zimbabwe Power Company) secured US$150 million for the expansion project at Kariba Power Station and the rehabilitation of some of its small power stations. Schweppes Zimbabwe also secured about US$7 million from the bank. Through increased financing from the PTA Bank, Schweppes Zimbabwe is exporting to countries in the region such as Zambia, Mozambique, and Angola. TDB is therefore not just funding national activities but rather supporting regional trade by targeting areas that can spur productivity, job creation, and economic development. The case of TDB in Zimbabwe illustrates the role of COMESA in regional trade and integration. Through financing key sectors of industrialization and production in Zimbabwe’s economy, COMESA has been able to spur economic development, regional production and trade, and, therefore, foster regional integration. Another important lesson from the case of TDB in Zimbabwe is that regional integration signals the emergence of large markets, which is a major factor in attracting manufacturers, and these manufacturers borrow money in order to invest, therefore, giving the banking sector a place to begin growing. Probably one of the most important examples of the impact of regional integration is the emergence of Pan-African banks (PABs), which are becoming more important than the long-established foreign banks (mostly from Europe and the United States). Indeed, there “has been a rapid expansion of Pan-African banks in recent years, with seven major PABs having a presence in at least ten African countries: three of these are headquartered in Morocco, two in Togo, and one each in Nigeria and South Africa.”415 Other banks, mainly from Kenya, Nigeria, and South Africa, “have a regional presence with operations in at least five countries. PABs have a systemic presence in around 36 countries.”416 Some of the leading PABs originate from Kenya (Equity Bank and Commercial Bank of Kenya), Morocco (Attijariwafa Bank, Banque Marocaine du Commerce Extérieur, Bank of Africa, and Groupe Banque Centrale Populaire), Nigeria (Guaranty Trust Bank and United Bank for Africa), South Africa (Nedbank and Standard Bank), and Togo (Ecobank/ETI and Oragroup). The banks have entered into Memoranda of Understanding with the central banks of the countries they operate in to ensure their oversight. Arrangements also reflect the growing complex arrangements between regional and national institutions. The arrangements show the improvement in regulatory capacity of national institutions, which makes it possible for regional expansion to flourish. This is in contrast with earlier days when foreign firms operated in Africa with little or no oversight. It also shows the coexistence between national and regional institutions. 247

The footprints of the PABs roughly map onto the geographical space of RECs in East, South, West, and North Africa. Of the banks, those from Morocco have shown the strongest interest in financing industrial development. “As part of their expansion strategy, Moroccan banks export their business model characterized among others on development of small- and medium-sized enterprises as well as the high supervision standards imposed by the Moroccan central bank—Bank Al-Maghrib (BAM).”417 Morocco can act as a strategic bridge between Europe and Africa in promoting technology-based businesses. The early focus on SMEs could be seen as a starting point in demonstrating the importance of lending for industrial development. The role of ECOWAS in the creation of Ecobank, the largest PAB, illustrates the important catalytic role that regional organizations can play in fostering economic complexity. The Togolese capital of Lomé is often associated with the Lomé Convention, a trade and aid agreement concluded in 1975 between 71 African, Caribbean, and Pacific (ACP) countries with the European Economic Community (EEC). The treaty was designed to provide mostly former Belgian, British, Dutch, and French colonies duty free access to the EEC market for their mineral and agricultural exports. The Lomé Convention became a symbol of post-colonial trade continuity between Europe and the ACP countries. A decade later, Lomé became the headquarters of the largest PAB, Ecobank, which was facilitated by ECOWAS. In the early 1980s, the West African financial sector was dominated by foreign and state-owned banks. Ecobank Transnational Incorporated (ETI), a public limited liability company, was set up as a bank holding company in 1985 to expand offerings. This was done under a private sector initiative led by the Federation of West African Chambers of Commerce and Industry (FWACCI) with support from ECOWAS. The FWACCI promoted and launched a project to establish a private, regional bank in West Africa. The founding shareholders of Ecopromotions, incorporated in 1984, raised seed capital to undertake feasibility studies and promotion that led to the creation of ETI. In 1985, ETI was incorporated with authorized capital of US$100 million. The initial capital of US$32 million came from more than 1,500 institutions and individuals from West African countries. The largest shareholder was the ECOWAS Fund for Cooperation, Compensation and Development, the development finance arm of ECOWAS. In 1985, the government of Togo granted Ecobank the status of an international organization. This status gave ETI the rights and privileges to operate as a regional institution. This included the status of a nonresident financial institution. ETI started operations with its first subsidiary in Togo in 1988. By 2017, Ecobank operated in 36 African countries and had operations in Paris and representative offices in Beijing, Dubai, Johannesburg, London, and Luanda. 248

It is expected that the adoption of agreements expanding the African free trade area and their implementation will help to facilitate the consolidation and expansion of PABs. But more importantly, the need to produce goods and services which can be traded among African countries will also provide incentives for PABs to increase their lending to industrial development. This process will go hand in hand with the creation of capacity in PABs on industrial development. It will create opportunities for engineers, for example, to play larger roles in providing technical advice to banking institutions. It is, therefore, important that people with expertise in industrial development are part of the trade negotiations. The relationships between the financial sector and structural transformation will continue to be debated for some time to come, as has been the case in the economic history of Western countries. These relationships are not deterministic or linear. What is needed is to find ways by which banking regulations are designed to reflect African economic transformation needs. The challenge for African policymakers is to pay closer attention to their local needs, such as infrastructure and industrialization, and to design banking institutions that can meet those challenges. It is not enough to simply create a few scattered industrial banks. It is more important to create incentives that allow for the emergence of banks that serve industrial purposes. Banks are not the only sources of support for industrial development. Many countries have pursued alternative approaches such as state funding and the creation of conglomerates. These measures should be part of the growing financial ecology that supports Africa’s structural transformation. These ideas are not new, but applying them today is not returning to the past, either. The design of banks to catalyze industrial development occurred when Western countries were emerging economies. This is the stage at which Africa is today and some of these experiences provide heuristics—not transferrable models— which Africa can learn from. 9.3 Governing uncertainty Creating governance structures that support innovation is going to be a slow reform process. It will take a closer look at the nature of development goals and the need to align key aspects of the executive branch with those missions. The case for such reforms is harder to make in countries where innovation is not considered a driving force for development. In fact, in many African countries, innovation tends to be equated with research and development (R&D), with the related institutions being bounced around from ministry to ministry whenever there are changes in ministerial functions. In many countries ‘science, technology, and innovation’ (variously named) is either a separate ministry or part of other ministries dealing with education, telecommunications, or industry. Its centrality as a driving force has yet to 249

gain competing attention. Looking at the impact of regulation on innovation, and the need for more systematic science and innovation advice to heads of state, underscores the importance of exploring how to improve innovation governance.418 The birth of mobile money transfer in Kenya has raised considerable optimism about the potential of the continent to leapfrog in other technologies. However, Africa’s mobile technology looks like an exception despite efforts to create start-ups using emerging technologies and platforms such as drones, 3D printing, robots, and machine learning. There are many reasons for the slow pace at which Africa is able to harness the power of emerging technologies and put them to economic use in the same way it did with mobile phones. One of them is the prevalence of regulatory cultures that suppress innovation. Most legislative reform on innovation simply creates new bureaucratic structures that inadvertently smother innovation by simply guaranteeing a proportion of the GDP to research and development (R&D)—measures that are among the least useful in spurring innovation. An example is the case of commercial drones, whose global market is projected to reach US$127 billion by 2020. Although drones are stigmatized because of their military use, they have critical civilian applications that can benefit African countries seeking to leapfrog traditional data collection services and transportation infrastructure. These applications include infrastructure, agriculture, transport, media and entertaining, insurance, telecommunications, and mining. None of these benefits will accrue to nations that use old laws to suppress the new technology. Ghana, for example, has issued new directives under which those operating unregistered drones could be jailed for up to 30 years. The intent is to protect Ghana’s airspace. But without complementary policies to promote the drone sector, the regulation will simply crash this nascent sector. This has already happened in Kenya, where drone operations are highly restricted on security grounds. Nigerian policies are equally draconian, requiring a registration fee of US$4,000, compared to US$5 in the United States. The restrictions extend to the private sector. Drone-operating businesses must have a minimum share capital of US$100,000. In addition, they must pay a one-time US$2,500 processing fee. Then they require security clearance as well. These requirements are reminiscent of the introduction of email in Africa in the 1990s. Email could only be accessed by using a personal modem to dial London or Paris. Many countries imposed restrictions on the use of modems claiming that they could damage the national landline infrastructure. The restrictions were quickly rendered irrelevant by the introduction of mobile networks. Ironically, some of the countries that are imposing heavy restrictions on civilian drone use are encouraging their use for military and policing purposes. 250

The Ghanaian police received donated drones for its operations. Nigeria is deploying drones in its fight against Boko Haram and marshalling the local oil industry. It appears that some African countries are waking up to the dangers of imposing restrictive rules on drone operations. Kenya is now working on new regulations for civilian drone operations. The regulations are partly a result of pressure from firms and organizations that want to use drones for film shooting, relief operations, and other commercial activities. Some of this change in policy is driven by Rwanda’s pioneering experimental work in deploying cargo drones for the delivery of medical supplies to remote regions. Rwanda is also working on policies that will stimulate the emergence of a drone innovation ecosystem including design, manufacture, and maintenance. Rwanda’s approach is driven by the recognition that the long-term benefits of drones will outweigh its risks to present-day operation. Its focus is to work with foreign firms to introduce the technology in the country, build the requisite human capability to operate the drone, and incrementally learn about the technology. This strategy involved adopting a learning approach to regulations. Here, regulations are, therefore, likely to be informed by practical experience instead of relying on the assumption that any technology that flies carries the same risk profile as a conventional aircraft. The traditional legal assumptions in many African countries fail to take into account the fact that drones offer new benefits, but they also pose new risks that require different regulations. The new benefits include the ability to adapt them to meet diverse cargo delivery requirements in an economical way. These include being able to deliver medical supplies in small packages. But by being remotely controlled, drones are also susceptible to hacking. Countries seeking to promote a local drone industry need to include cyber-security concerns as part of their innovation policy. Given these challenges, policymakers have clearly not learned the lessons from the introduction of mobile phones. Pioneers in mobile communication recognized the potential impact of the technology and liberalized the policy environment accordingly. They were aware of the risks of the technology, but their decisions were based on balancing them with the benefits. Such visionary leadership and entrepreneurial courage will be needed if Africa is to benefit from emerging technologies such as solar photovoltaics, drones, 3D printing, gene editing, robots, and machine learning. But applying restrictions based on existing laws makes the successes of mobile communications look like an irreproducible historical accident. In 2014, New Zealand hosted the International Network of Government Science Advice Conference. The conference served as “a forum for policymakers, practitioners, academies, and academics to share experience, build capacity, and develop theoretical and practical approaches to the use 251

of scientific evidence in informing policy at all levels of government.� There were no African participants at the conference, because African presidents and prime ministers do not have dedicated offices of science and innovation advice. This means that important decisions in Africa are made without the support of scientific evidence.419 African governments currently maintain governance structures created for managing resource-based economies where the focus is on commodity prices. They can thrive with occasional input from their chief economists and newspaper reports. But running an innovation-driven economy requires greater attention to the dynamics of technological innovation worldwide. STISA-2024 reflects the fact that science and innovation are not sectoral issues that can be implemented only through line ministries. Every ministry deals with science and innovation issues and should have its own internal advisory system. The UK, for example, has established an ecosystem of science and innovation advice. Every government department has a chief scientific advisor. Another area that could benefit from systematic science and innovation advice is security. There is growing concern about potential conflicts over access to critical natural resources such as water. The first key task in addressing such issues is having reliable, timely, and low-cost access to geographic information. Science and innovation advice can help in two ways. First, advice to governments can help provide options for ways of getting such information, which may include setting up satellite programs. Second, science and innovation advisors could play a role in interpreting the data and identifying action strategies. Science and innovation advice could also be used to address controversial issues. Some emerging issues that require systematic advice include the automation in manufacturing and its implications for employment. Another example is sorting out the divergent views related to genetically modified crops or climate change, as there is growing concern over climate change and its implications for African agriculture. Systematic science and innovation advice can provide leaders with reliable information on emerging trends. It would also help them to decide on what kinds of innovation strategies to adopt to adapt agriculture to changing conditions. Other areas that could benefit from systematic science and innovation advice include natural resource management. The challenge at the national level is analogous to continental and regional needs for science and innovation advice. The difference, however, is that the demand for advice is even higher when dealing with the implementation of specific economic objectives. This not only includes the choice of technologies, but it also involves assessing the impact of emerging technologies, as illustrated by the intense debate over genetically modified crops. Africa is creating scientific academies as part of a wider ecology of advice. This could include the input of national and regional scientific academies. So far 16 African countries (Cameroon, Egypt, Ethiopia, Ghana, Kenya, Madagascar, 252

Mauritius, Morocco, Mozambique, Nigeria, Senegal, South Africa, Sudan, Tanzania, Uganda, and Zimbabwe) have national academies. There is also the nongovernmental African Academy of Sciences. These academies have the internal capacity to offer advice to their governments. They cannot effectively function, however, without having high-level offices in the presidencies that can help to define advisory needs, assessment procedures, and delivery methods. Such offices must be created by law and supported by competent staff. They need their own budgets and can benefit from mentorship by established academies around the world. There are, however, some aspects of the academies that could stand in their way of serving as dynamic advisors to government. These include their honorific nature, which leads to the elections of fellows whose pioneering work may no longer be relevant for today’s needs. This can be remedied through the election of younger fellows whose work can directly contribute to contemporary needs. Another major limitation is the use of publications as a major criterion for election. This works against experts in fields such as engineering and medicine where professional standing is based on practice and not necessarily publications. This could be remedied through expanding the criteria for election of fellows as well as the creation of new academies that cater to fields such as infrastructure development, industrialization, healthcare, and agriculture that demand continuous scientific and technical advice, given their primacy in Africa’s development priorities. There is, for example, room to create an African Academy of Engineering given the growing demand for advice on infrastructure projects across the continent. A final area of interest that will emerge as a result of the focus on structural transformation is how to build relevant international science and technology partnerships. The field of science and innovation diplomacy is underdeveloped in Africa and the little that goes on is mostly driven by Africa’s external partners. But this will change as African countries start to focus on implementing the key elements of the regional agreements such as free movement of goods and services, infrastructure, and industrialization. Relations between African countries and their international partners will, over time, be shaped by immediate scientific, technological, and engineering priorities. This is already evident in the expanding partnerships with countries such as Brazil, China, India, Japan, Malaysia, South Korea, and Turkey. Science diplomacy will play a role when dealing with possible trade disputes among African countries, especially on products that carry health risks. But in many other cases, the emphasis is likely to be technological and engineering cooperation. The adoption of emerging technology and the very promise of industrial transformation come with socio-economic risks that need to be addressed. Unless such risks are addressed and strategies for inclusive innovation are put in place, the technologies are likely to be resisted or their adoption delayed. Of 253

the technological revolutions, automation appears to involve the most social anxiety.420 Concern over the impact of automation is likely to be heighted in Africa, given the high rate of youth unemployment. People do not resist technologies because they are new. They oppose those technologies that are associated with business models that lead to loss of livelihoods, identity, meaning, or sense of purpose. Of these concerns, loss of livelihoods is usually the main trigger for concern. Though the others are equally important, they are often invoked to support the underlying argument about loss of livelihoods. That said, people will readily accept new technologies that are perceived to promote shared benefits and economic inclusion. Access to new technologies, therefore, holds the key to such inclusion.421 Historical evidence suggests that while new technologies may destroy jobs, they also create new ones. This has been true and will continue to happen, though not in all industries. There are at least four major factors that differentiate today’s technological advancement and the circumstances that prevailed during the Industrial Revolution in England at the height of the Luddite rebellion.422 First, robots, automation, and artificial intelligence will rapidly invade every conceivable human activity. The spread will be pervasive, covering much of the world, irrespective of the level of integration into global value chains. Second, the speed of technological advancement is discernibly exponential, and disruptions will occur soon after new technologies are introduced. Third, the claim that displaced workers can be retrained is only partly valid.423 In many cases, machines learn at an exponential rate while human training is largely linear. Finally, technological advancement now involves a wide range of disciplines and engineering practices. This technological convergence amplifies both the benefits and risks of emerging technologies. The key to inclusive innovation might be broader access to the same disruptive technologies. The first step is being able to provide engineeringrelated training to a broader section of society. This needs to be accompanied by open technology platforms that expand Africa’s opportunities to create new businesses. Governments need to be proactive in designing evidencebased strategies that enable society to minimize the impacts of technological innovation.424 This shared future will make resistance to innovation and the associated economic populism less attractive. These concerns and strategies for inclusive innovation should be an integral part of the trade remedies introduced to address the impacts of regional integration on incumbent industries. 9.4 Lessons learned The last 50 years or so of building regional institutions in Africa have yielded extensive lessons. These lessons are vital sources of guidance not only for governments but also for nonstate actors that will contribute to the regional 254

integration regime. Governments have provided the initial catalytic structures. They will add more. But in many cases, they will work with non-state actors in private-public partnerships. In other cases, non-state actors such as private firms will undertake their own regional integration efforts. These lessons will not only help during negotiations but also will provide guidance on how to sustain the new institutions. Africa has been active in regional and international negotiations in various forums, which have stretched its financial and human capacity. With the conclusion of the Tripartite FTA agreement, Africa demonstrated its diplomatic capacity for large-scale negotiations designed to translate vision into text and architecture of actual rights, obligations, and programs. The negotiations have provided many lessons to be internalized and institutionalized for posterity. The negotiations underscored the utter need for good analytical work to support evidence-based policymaking, for preparatory work before the actual negotiation sessions, for options and bargaining chips, for clear instructions and an organic link between the negotiators and their capitals to create regular guidance on issues that arise, and for clarity of vision and adequate motivation on the part of the negotiators. A preparatory process is important, as it provides the opportunity for analytical work, dissemination, and awareness creation. It allows consensus to emerge early in certain areas and identifies sticking issues that will require some focus. A preparatory process that involves all relevant stakeholders in government, the private sector, academia, and civil society promotes ownership of both the process and outcomes and improves prospects for uptake and utilization of resulting regimes. The preparatory work also involves the housekeeping elements for conducting the actual negotiations, such as agreement on principles, rules of procedure, roadmaps and issue-specific timeframes, hierarchy for resolution of stalemates, and format of the outcomes. The actual negotiations for the Tripartite FTA showed the need for skills development in the various specialized areas of tariff offers, customs, rules of origin, nontariff barriers, technical and health standards, trade remedies, international relations, and drafting of text, among others. The negotiations on the Work Program for Industrial Development showed the need for skills development with respect to innovation, incubation and clusters, intellectual property, financing, structural transformation, and inclusive industrialization. Negotiations on infrastructure showed the need for skills development regarding energy, information and communication technology, and surface, air, and pipe transportation, as well as a holistic understanding of competitiveness and structural bottlenecks to economic transformation in the region. Above all, the negotiations clearly showed the need for clarity on what economic integration in Africa means. There were times when national 255

outlooks and interests undermined progress in the negotiations or denied optimal regional programs. Protection of influential domestic industries, for instance, went counter to the greater welfare gains that would result from deeper trade liberalization. Preservation of domestic regimes went counter to the welfare gains that would result from a large seamless economic space with a harmonized policy and regulatory framework. In some cases, the continental template for African integration seemed totally unknown. These skills gaps call for a dedicated approach to building specialized capacity for negotiations and African economic integration. In international economic interactions, African countries seek to protect and improve their development prospects by addressing the constraints relating to production, market access, and physical and social infrastructure. They seek to address five specific problems. First, they have limited domestic resources to finance development, investment, and job-creation. Second, they are saddled with huge foreign debt that constrains their limited resources; indeed, any inflow, including government revenue, goes toward repaying debt. Third, market access for exports such as agriculture and textiles is extremely limited. Fourth, they are often unable to capitalize on the limited market access opportunities they do have. Finally, domestic constraints limit productivity, which in turn limits the ability to export products to domestic, regional, and international markets. A framework for addressing negotiation challenges A country enters trade negotiations to promote its trade objectives relating to socioeconomic development. To effectively negotiate these objectives, a country must have relevantly skilled negotiators and supportive resources. Yet streamlining trade objectives, finding and keeping skilled negotiators, and harnessing supportive resources constitute major challenges for African countries. Broad trade objectives usually entail increasing a country’s exports and securing imports on favorable terms after taking into account factors such as the nurturing of domestic industry while maintaining a suitable degree of competition from imports, ensuring adequate sources of government revenue from customs duties (for African countries), and securing a variety of good-quality products for consumers. A fundamental objective is to ensure that the rules provide for sufficient flexibility for adopting and implementing development policy. Specific trade objectives depend on the structure of the economy. African countries, like other developing countries, have traditional exports they want to diversify away from. Thus, trade negotiations will aim to secure markets for new products in addition to finding markets for the traditional exports. The negotiations also seek cooperation of trading partners for technical and financial assistance required to meet market preferences and satisfy health and technical standards and other customs or entry procedures. Negotiations typically aim 256

to assist developing and especially least-developed countries to address their production and supply constraints so that these countries can increase their productivity and take advantage of greater market access. A country must position itself to effectively negotiate its objectives into the specific results of the negotiations so that the instruments adopted contain rules that secure and promote those objectives. In order to do so, a country should streamline or strengthen its major forums of action and implement a concrete program on capacity building for trade negotiations. The forums of action The major forums of action will be at the organizations where trade negotiations take place (e.g., at the WTO, or at the AU or REC and their secretariats) and at the domestic institutions that prepare and negotiate the national positions (e.g., in capital cities where line ministries are located). The idea is that a country should establish a link between its representatives in the negotiations, its officials in the line ministries, and the support institutions for the negotiations. The support institutions will include researchers and other thinktanks that provide timely evidence or other material to sustain the negotiating positions adopted. The institutions will also include a structure within which the think-tanks directly link to the line ministries and within which both the line ministries and the think-tanks link into the actual negotiations by expeditiously providing feedback and input on the way forward. While it is necessary for the REC member states to designate coordinating ministries and to designate desk officers, it is equally necessary to have permanent representatives that closely follow developments in negotiations on specific matters, such as the establishment of contacts and setting of context for advancing the country’s trade objectives. This is particularly essential as the RECs become more important to the formation of the African Economic Community. Linkages between the forums of action are important. Trade negotiations with other countries tend to raise similar issues, concerns, and objectives, particularly issues of obtaining market access and the stability of that market access. In cases of African countries seeking foreign markets outside the continent, the trade partners will be the same, regardless of the forum of the negotiations. In the WTO and in bilateral arrangements, the major trade partners will be the European Union, the United States, and other developed countries, as well as, to a significant extent, the newly industrialized countries that promise new markets, especially for non-traditional exports. Given this similarity of issues and negotiating partners, the forums of action must coordinate their activities not only in relation to negotiations in one forum but also in relation to trade negotiations in all other forums. The aim of the coordination is to ensure first that the country’s officers and representatives 257

all speak with one voice and understand the same positions, and, second, that the country’s positions on issues are similarly advanced and defended in all the forums; for if the country loses its positions, and its interests are thereby prejudiced in one forum where a major trading partner participates, successes in other forums will be severely compromised and rendered ineffective. Therefore, shortcomings at any one forum of action will constitute serious fault lines and will be the focus of attacks from negotiating partners where they seek to defeat what they consider adverse negotiating positions. Functions and effectiveness of the line and lead ministries The line and lead ministries should provide an overall direction for the negotiations. The representatives in the negotiations should then be able to clearly articulate the positions communicated from their capitals. Identifying a lead ministry is critical to avoid a conflict of leadership between the ministries and to ensure harmony and unanimity in pursuing the country’s trade objectives as defined in its negotiating positions. The lead ministry must coordinate all the relevant ministries. In trade negotiations with other countries, the Trade and Foreign Affairs ministries will fulfil this role, unless there is a specific ministry on external trade. In broad WTO negotiations, various ministries will be involved, such as justice, agriculture, health, finance, telecommunications, labor, immigration, and intellectual property. On negotiations for African economic integration, a similar variety of ministries will be involved. The specific function of the lead ministry is to coordinate and facilitate, where possible, the government representatives who become the negotiators. The lead ministry must do this in accordance with the mechanisms, including any protocols that the government would have put in place relating to international negotiations and dealings. The specific functions of the line ministries will include first preparing and communicating the country’s position in accordance with the institutional arrangements, if any, on how negotiating positions are prepared and adopted and then coordinating programs to support and supplement its positions once they are adopted and pronounced in the negotiations. To be effective, line and lead ministries will require adequate staff and reasonable terms of service and work conditions to ensure the officials are singleminded, settled, motivated, and patriotic in undertaking their functions. The ministries also require a broad-based and well-resourced institution providing a legitimate and authoritative forum (by including all relevant interested parties in the country) for the formulation and implementation of trade policy and positions; access to a pool of information as well as expertise from academic, research and other sources. Also, they require an adequate budget and clear rules and guidelines on their mandates and hierarchy. In Africa, however, the ministries face formidable constraints arising mainly from limitations on 258

government spending and shortage of expertise and information in specific areas. Functions and effectiveness of representatives in the negotiations A country’s representative in trade negotiations must faithfully and effectively present, advance, and defend its country’s positions. Where none exist, the representative should remind the governments to formulate and communicate clear positions. The representative should inform the capital of the timeframes for relevant negotiations and provide updates so that programs are in place for the timely formulating and communicating positions. Representatives should personally participate in the processes for formulating trade policy and position. A country’s representative also engages in trade diplomacy, aiming to win over opponents and public opinion through participation in the media, presentations, meetings, academia and empirical literature, manifestos and work programs of political parties or organizations, and interactions between political and civic leaders. Representatives in trade negotiations will be either based in the capitals or stationed at the forum of the negotiations. In either case, their effectiveness will be assisted by expertise in the subject, either acquired from training or internalized from regular briefs provided by those with expertise. Other traits that will boost their effectiveness include personality and the ability to clearly, consistently, and proactively articulate and advance positions with precision. In addition, three other factors that will help negotiators include: support from the capital and its trade policy institutions, including its experts and think tanks; a group of like-minded countries and negotiators around which positions can be nurtured and through which they can be advanced and defended in negotiations; and adequate provisions and resources to meaningfully engage in trade diplomacy. Functions and effectiveness of support institutions Support institutions are necessary to supplement the expertise and resources available both to officials in lead and line ministries and to the representatives. If support institutions are broad and inclusive, they could serve as democratic, consultative forums for developing national trade policy and positions that would help to legitimize the negotiating positions, compared to secretive processes carried out within the bureaucracies of line ministries. Support institutions could discuss and adopt recommendations and positions on all issues arising from subjects to be negotiated while addressing positions and interests of negotiating partners. They could provide experts and additional material to negotiators. They should network with all known and willing researchers and their institutes, including domestic and foreign academic institutions and research organizations. They should also initiate and share research on pertinent topics. 259

An effective support institution will be structured rather than improvised and will be formally recognized in the country as the forum for deciding on trade policy positions. The institution will need to be adequately funded, especially for conducting research and hosting experts on various issues under negotiation. The institution should ensure inclusiveness so that as many of the country’s experts are consulted as possible and all stakeholders should fully participate in its proceedings. Stakeholders’ participation will be important in identifying interests and concerns on which the institution could formulate policy and positions. National programs for capacity building for trade negotiations Lessons learned from the TFTA experience indicate that a national program on capacity building for trade negotiations would be a key foundation for sustainability in effective trade negotiations, because without the human and skills capacity to negotiate, a country will fail to pursue its objectives. Such a program should address several elements. First, an institutional memory should be maintained, including retention of employees, so that they can build upon negotiation experience. Training must occur, particularly through institutions of higher learning; curricula could include, for instance, African Economic Integration or WTO Law and Policy. Manpower planning should adequately cater to the personnel needs of the country in the short-, medium-, and longterm. Inter-ministerial and inter-organizational coherence will help eliminate inconsistent government policies and positions on key issues. National and regional networking is necessary for government officials, researchers, education institutions, and civil society. Finally, the national budget must include adequate trade provisions. Institutional memory Institutional memory is the collective memory that people gain after training or working in a specific field. The main sources of institutional memory are the pursuit of specialized training courses, hands-on learning or on-the-job training, and keenly following specific subjects either as part of one’s job specifications or out of interest. The capacity-building programs on trade negotiations through the WTO, UNCTAD, and the World Intellectual Property Organization (WIPO) have produced a cadre of trainees in the civil service of many African governments. Civil servants develop contacts and working relations with colleagues; join networks of negotiators, researchers, and activists; and become practitioners and experts in their fields. Together, they become an invaluable resource during negotiations, and they can also help train others for further capacity building. Maintaining an institutional memory helps to avoid losing what the country has obtained and is, therefore, a basic way of efficiently conserving and utilizing 260

human and training resources. In Africa, the civil service is constantly trimmed, and civil servants often leave for the private sector as well, resulting in loss of expertise and human resources. Governments must find the means to retain established civil servants to aid in intensive trade negotiations. Human resources and capabilities The training component of the program should aim to endow people with the requisite skills to become effective multilateral, regional, and bilateral trade negotiators. The program should incorporate theoretical and practical training. Seasoned trade negotiators and other practitioners should be included among the teachers. Where possible, students should participate in trips and internships with secretariats of the WTO and UNCTAD, as well as the secretariats of the African regional economic communities. The planning ministries forecast and provide for the manpower needs of the country in the short-, medium-, and long-term. Trade negotiations typically have not been a priority because of the obvious personnel and skills shortfalls. For example, the WTO Uruguay Round was negotiated from 1986 to 1994 and, by the time the WTO was established in January 1995, some advanced developing countries already had experts on the WTO. The WTO put together a training program for developing countries, but it was basic. Twenty-one years after the establishment of the WTO, African countries still needed to establish training facilities for producing cadres of experts on trade negotiations. This is even truer of African integration. Economic integration has been adopted as the overarching development strategy for Africa since the adoption of the 1980 Lagos Plan of Action. Both the African Economic Community and the African Union are in force as continental organizations providing direction for the future and development of Africa. Yet African higher education institutions offer hardly any specialized courses designed to produce students of African economic integration and African trade negotiations. Manpower planning for trade negotiations should include programs beyond those described above. African governments should develop student and scholar exchange programs with recognized universities offering appropriate courses. African governments should set aside funds for scholarships for core teams of trade negotiators and teachers to undertake graduate studies in recognized universities for one or two years. Those teams would return to train government officials and students. And again, the scope of the scholarship programs should reflect the manpower needs of the country. Manpower planning should account for promotions and the need for experts, in addition to envisaging the needs of the private sector. The exporting community is a good watchdog against infringements of obligations by other member states where they adopt measures against the country’s exports in breach of the trade agreements negotiated. One of the key limitations of charting new territory is that Africa has not had role models to draw on nor existing capabilities in specific areas of regional 261

trade. Much of this capacity has been built during negations and implementation. A key cause of the slow progress of regional integration is the lack of human and institutional capacity to implement the numerous protocols, decisions, and legal guidance originating from regional bodies. There are very few universities around the world that offer courses on regional integration. Where they exist, they tend to focus on the priorities of their regions. To address this concern, COMESA decided in 2010 to establish a university devoted to training the next generation of thinkers and practitioners on regional integration.425 In an unexpected move, at a 2010 meeting, the COMESA Council of Ministers decided to create a university, despite knowing it didn’t have a budget for it. The idea was compelling enough that the absence of funding was not an impediment to the creation of the university. To provide a low-cost starting point, they agreed to create a virtual rather than physical university. The idea was to build on a network of existing universities and also incorporate the academy of science, technology, and innovation proposed in the 2010 meeting of ministers. The university is envisaged to be a specialist graduate school for interdisciplinary research and training on regional integration. It aims to bring world class academics, researchers, and practitioners from leading institutions around the world together through digital platforms. The goal is to offer a twoyear Masters of Regional Integration (MRI). In 2016, 22 universities from the 19 COMESA member countries agreed to collaborate in supporting the course. The syllabus requires learners to do ten core courses, five electives, a dissertation, and an internship at a regional integration organization. The target ground for the MRI is government officials dealing with trade, integration, and cooperation issues; students intending to work as trade officers, trade policy analysts, advisers, researchers, or trade attaches; private sector trade practitioners; media practitioners specializing in business, gender, climate, and trade issues; chambers of commerce, manufacturer and consumer associations, consulates and other diplomatic missions, and development organizations dealing with trade and integration issues, among others. The MRI could also be offered to middle-level trade researchers and consultants and existing COMESA staff. The objectives of the university include: providing sound conceptual, policy, and practical training on regional integration; imparting practical skills to learners and to update their knowledge with the intent to support trade negotiations and the entire process of integration in the COMESA region; enhancing and promoting research activities in the area of regional integration issues; extending access to research opportunities and higher education on regional integration within the COMESA region, and in the continent, by promoting and enhancing the generation of research output relating to regional integration; supporting and promoting the dissemination and exchange of research findings on regional 262

integration; and facilitating attitude change among officials who are involved in the day-to-day management of the integration process. COMESA decided that Kenyatta University in Kenya would be the host of the virtual university with the expectation that, in the long run, it would become a stand-alone institution. In 2017, it admitted its first class. The creation of the COMESA Virtual University is another example of the catalytic role that adaptive regional institutions can play in responding to specific needs, and by doing so, they expand the functional complexity of regional activities. It is notable that the university was created in conjunction with existing institutions of higher learning and was not viewed as duplicating their efforts. In the long run, it is expected that the virtual university will inspire the creation of courses in existing universities, thereby strengthening the system of higher learning and research on regional integration. The emerging patterns of regional integration provide a basis for the COMESA Virtual University to serve as a platform for the creation of a continental university system on regional integration. This suggests that regional integration bodies may provide new opportunities for expanding higher education in Africa without having to deal with the traditional rigidities and politics of national higher education systems. The bodies offer new avenues for creativity that are only possible through regional cooperation among member states. Coherence Officials in various ministries may have different perspectives on various trade policies. Finance ministries tend to be powerful and lean toward policies espoused by the World Bank and International Monetary Fund; and they may even have the desks servicing bilateral trade relations with major trading partners, particularly the European Union and the United States. Foreign Affairs ministries are often excluded from national trade policy formulation and implementation, except to the extent that they may be designated as the lead ministry. This is a serious strategic flaw. Trade ministries are, on the whole, poorly funded and weak, and have a low stature in government. Yet trade allegedly plays a key role in economic development and poverty reduction. It simply reflects the mismatch between words and action and the apparent lack of seriousness on the part of many African governments. Thus, coherence is crucial among all relevant ministries and in their relations with international organizations. The coherence will ensure a consistent national position on specific trade issues. This assists in terms of harnessing all the capacity in the various ministries to the same cause and behind the same policies and positions, rather than infighting and spending resources to duplicate functions or correct mistakes.


Networking and budgets When government departments network at the regional level, they develop a shared understanding of trade issues, which can assist in arriving at common positions to present and negotiate. Countries can mutually reinforce each other to present a strong negotiating team. Trade institutions, such as exporters’ associations and the private sector, can network to organize and share market information. Trade institutions can act as powerful lobby groups that promote particular positions or a region as a destination for investment. These functions help identify priorities and concerns and formulate trade policy and positions. Funding needs of African countries are monumental, though not insurmountable. It has been clear for decades now that donor funds will not be the panacea to the development finance needs of African countries, since donors have specific objectives and short timeframes and Overseas Development Assistance (ODA) levels have continued to fall since the 1970s. African countries have the capacity to fund development programs if they mobilize and share their human resources and skills and more closely cooperate toward a common goal of continental economic integration. African countries face multilateral, regional, and bilateral trade negotiation challenges. In particular, economic integration as the overarching development strategy for Africa will require that countries prioritize trade negotiations relating to the African Union and the RECs. Governments should coordinate and strengthen their forums of action. This should be done in conjunction with a systematic program of capacity building for trade negotiations. For African countries, their forums of action in trade negotiations will be their capitals, as well as the capitals of their major trade partners for bilateral arrangements, and will primarily aim to effectively implement the arrangements. For the regional market, the stations hosting the secretariats of the African Union and the African regional economic communities will be important forums of action. In WTO negotiations, Geneva will be a major forum of action. African missions in Geneva and the trade ministries will be major players and will need to position themselves to successfully negotiate the trade objectives of their countries into the specific results of the negotiations, mainly through enhanced expertise and manpower. A program of capacity building must aim to nurture an institutional memory within government, to train a pool of experts within the public and private sectors, to plan for the manpower needs of the country, to ensure coherence across the ministries and across relevant international organizations, to establish public and private sector networks at the national and regional levels in order to access and share all relevant expertise as much as possible, and to provide an adequate budget to support the programs.


The AFTA and AEC Africa’s integration journey is geared toward the ultimate formation of a functional African Economic Community by 2028—a complete economic and monetary union. This goal should be reflected throughout the programs of the regional economic communities as the building blocs. Africa has agreed to expedite progress toward this goal. Accordingly, COMESA, EAC, and SADC have negotiated and concluded the Tripartite Free Trade Area comprising 27 countries, that is, half of Africa. A free trade area covering half of Africa was a significant step toward the Continental Free Trade Area, both of which have now been established, and which will be the motherboard for the African Economic Community, just as free trade areas have been in the RECs. The developmental approach to economic integration, covering market integration, industry, and infrastructure will provide the overall framework as Africa journeys toward the African Economic Community. 9.6 Conclusion This chapter addresses how the creation of catalytic continental and regional institutions has provided a basis for pursuing strategies for structural economic transformation. It also explains how to manage the emerging complex institutional arrangements so that they can perform their catalytic role. It explores some of the operational issues that need to be addressed to make effective use of the catalytic institutions. Leveraging the power of these institutions requires a governance approach that assumes that the future is always open and the best way to respond to uncertainty is to promote institutional diversity. To determine a vision for the future, Africa has focused on creating regional and continental institutions. But over the same period, nation states emerged as operational nodes in the complex ecology of regional institutions. This approach did not require transferring sovereignty to supranational institutions, but it involved a shared future in which institutions at different levels were able to cooperate to solve problems. This is an important contribution because it expands the concept of inclusive institutional innovation that is central to the systems worldview that has guided Africa’s regional integration. It also resolves the false dichotomy between national and supranational institutions. The flexibility in the system allows for adopting pragmatic approaches that focus on problem-solving. This brings us full circle to the experimental approach that has brought Africa this far. But this time, there are more entry points for experimentation and learning that will help to move Africa toward the milestones set out in Agenda 2063.


10. Outlook 10.1 Taking stock 10.2 The way ahead 10.3 Conclusion This book has traced the history of African integration, beginning with the decolonization era where political emancipation was a priority. The regional integration efforts were founded on the premise that the pioneers of pan-Africanism saw opportunities for shaping a new continent from chaos into order, through experimentation and learning at the regional level. The fundamental departure for African regional integration was the view that the prevailing conditions did not represent a state of equilibrium where problems could be solved through minor adjustments. The pioneers of pan-Africanism embraced the far-from-equilibrium conditions that prevailed at independence and embarked on the most elaborate and complex political experiments ever undertaken in human history. Over the last 50 years, Africa has laid a foundation for its transformation through the creation of catalytic institutions at the continental and regional level. These institutions provide the basis through which a new vision of inclusive growth and sustainable development will be implemented.426 The creation of the institutions has expanded opportunities for creativity and innovation. The way forward will be equally experimental, except that it will build a richer tapestry of institutional arrangements based on lessons learned from past integration efforts. 10.1 Taking stock This process was guided by the view that Africa could not define its future by accepting the position of sitting on the margins of the prevailing economic system. For Africa, a return to some form of global equilibrium after the two world wars was not a viable option. For pioneers, the future lay in defining a new vision given the far-from-equilibrium conditions in which Africa found itself. The conditions were marked by uncertainty, but they also offered new opportunities for the creative transition from chaos to order and complexity. 266

The starting point was crafting a new vision that captured the geographical breadth of the continent, the spread of its cultural connections, the depth of its historical roots, and the loftiness of its aspirations. For the pioneers, this vision was pan-Africanism, and the starting point was a combination of decolonization and political integration. At the time of independence, the only way forward was to provide a vivid and inspirational reference point for unification. The political ideology of pan-Africanism suited the purpose. Then, however, it appeared that politics trumped economics and all else. There were differences in the timing of political integration between those who wanted the creation of the United States of Africa and those who preferred an incremental approach. The latter group won the day, partly because of the desire to protect nationalist interests. But this turned out to be an important starting point for a regional integration approach that built on the strength of sovereign actors while seeking to foster greater and nested hierarchy of integration across the continent. Nothing could be achieved without the creation of institutions and sets of rules for governing political interactions and organizations that provided structures for implementing regional integration objectives. The creation of such catalytic institutions involves extensive diplomatic efforts at the continental and regional levels. African leaders envisaged the creation of a continental economic area. But they also understood the limitations of pursuing this objective on a continental level. The solution lay in creating and designating regional economic communities as the building blocs for continental economic integration. The regional bodies’ treaties and constitutive instruments shared the common purpose of fostering economic development. But how they implemented their mandates was left to regional priorities, often driven by opportunities or crises. What followed was a period of regional experimentation reflecting local priories. These priorities included supranational politics, trade, security, environment, and infrastructure. Through years of experimentation trade became the platform for the broadest base upon which to foster economic integration. For Africa, deepening regional trade was about more than just liberalizing markets. It was viewed as a starting point for economic development. Armed with the lessons from the various regional experiments, African countries embarked on a process to consolidate the gains made so far, promote convergence, and solidify practical interactions. This process involved new negotiations to integrate regional bodies on trade and development issues. The negotiations highlighted the importance of foundational investments in areas such as infrastructure and the importance of industrialization in structural transformation. Although the consolidation started with trade and development, it also provided a framework of expanding integration in other areas such as peace and security, human health, infrastructure development, and environmental management. The regional catalytic institutions also provided a framework for regional integration among nonstate actors such as the private sector. 267

10.2 The way ahead Africa has moved on from the age of decolonization. It has drawn from its regional integration lessons to project a new outlook for the future under the umbrella of Agenda 2063. No other continent has set out a 50-year vision. Its overall goal is to become a prosperous continent built on the principles of inclusive growth and sustainable development. It aspires to be more integrated using the ideals of pan-Africanism and continuous renewal. One of the most pressing challenges of the coming decades will be seeking to meet human needs while protecting the environment. This will require a new view of the relationship between humans and the environment. More specifically, it will require a recognition of the importance of ensuring that Africa’s ecological infrastructure is managed in such a way that it can sustain the needs of its growing population. The future is open and provides a wide range of possibilities for creativity, especially when supported by abundant access to energy services.427 These opportunities, however, must be pursued within the context of inner human limits as well as outer ecological limits.428 A number of regional integration bodies have grappled with how to address ecological degradation and drought. The lessons they have learned in the process are similar to the measures that are needed to address the long-term impacts of climate change. The unfolding trade regime may also offer lessons on how to address some of the critical challenges of loss of species. Like in regional trade, ecosystems maintain their robustness when species are able to move freely based on their range needs. The survival of many of Africa’s iconic species like the cheetah, giraffe, and wildebeest can be enhanced through the regional expansion of their range. Similar approaches are needed for the management of water basins, forest biomes, and rangelands. Ecological integration will be a central aspect of Africa’s sustainable development objectives. 429 Agenda 2063 projects improved governance, democracy, human rights, justice, and the rule of law. Concerns about peace and security, which are the subject of various regional bodies, feature prominently in Africa’s long-term outlook. Cultural bonds, common heritage, shared values, and ethics are seen are important elements in connecting the diverse peoples of the continent. One important element of the vision is the focus on human development and the emphasis on women, youth, and caring for children. Finally, Africa aspires to play a larger role on the global scene. These are ambitious goals whose implementation will take considerable effort. The difference between the next 50 years and the last is that Africa has a lot more experience to draw on, based on its own regional experiments. In fact, the elements of Agenda 2063 reflect the lessons Africa has learned since independence. These aspirations will not only enrich current regional integration efforts, but they will also become a basis for new integration activities.


The continent’s regional integration is the most complex and elaborate effort of its kind ever mounted in human history. It is an exercise in intellectual courage and is being pursued through peaceful diplomatic means. Africa is a large territory that is three times the size of the United States. The sheer size alone creates a wide range of challenges when managing regional activities. The Democratic Republic of the Congo, which is at the center of the continent, is as large as Western Europe. This geographical scope of the continent is often overlooked when assessing Africa’s governance and management efforts. Under such circumstances, the tendency has been to focus on a small part of the continent and refer to it as “Africa.” This geographical escapism is so pervasive that often Africa is equated with a collection of villages. Those who have been to one village think they have been to Africa. However, regional integration is both about geography and institutions. It is not uncommon to hear arguments for cost-effectiveness used to argue against institutional diversification in Africa. Those who make this point rarely examine the lost opportunities caused by the paucity of development institutions, especially at the regional level. Much effort is wasted through proxy activities such as regional conferences instead of institution-building. The future of Africa will be one of growing institutional complexity with many layers and locations of actions. Managing this complexity will require a new generation of professionals. Some of the capacity will emerge through practice, but this cannot be a substitute for deliberate efforts to train people with the capacity to manage large-scale institutions. Some of the necessary training facilities such as universities need to be incubated by regional organizations. They will complement national training programs and create their own layer of regional integration. One of Africa’s primary economic goals is changing its peripheral place in the global economy, where it is valued largely for its raw material exports. It is not just the fluctuations in commodity prices that pose continuous risks to Africa’s economic prospects; there larger challenge is the focus on raw materials. This focus has persisted at the expense of investment in human resources. This view was reinforced by international agencies’ decisions to define Africa as a continent whose people were only worthy of receiving support for primary education. These supposed custodians of international development support expected nothing higher from Africa nor its people. Africa is turning its attention to key sources of economic transformation, such as science and technology, infrastructure, technical training, entrepreneurship, and regional market expansion. This shift is not only going to change the way Africa seeks to position itself on the global scene, but it will also redefine its international relations. For example, much of Africa’s trade cooperation has been buttressed by its aspirations to expand its physical infrastructure as a foundation for development. This shift will also influence the patterns of human 269

resource development in Africa and lead to increased emphasis on technical and engineering fields. This in turn will lead to new forms of international partnership in science, technology, and education. Regional integration will not just change Africa, but it will also alter the way the rest of the world relates to the continent. The first step in building this cadre of professionals is through training programs such as those offered by the COMESA Virtual University. But such training should be extended to other universities so as to create people who see the value in strengthening regional integration through a systems approach. These will also be the same capacities needed to manage the continent’s growing complexity. The creation of the COMESA Virtual University is a metaphor for other approaches that could foster regional integration while lowering its transaction costs. For example, in 2017, the Nineteenth Summit of COMESA was paperless. Working documents for ministers and presidents were uploaded to a secure cloud and passwords provided in advance of the meeting to the countries and registered participants. At the meeting itself, the documents were uploaded onto laptops and each of the 19 countries received three laptops, each costing US$300. The documents were saved on pen drives as well, which were provided to participants. Having a paperless summit itself is not novel, but what it represents for Africa’s future is a technologically advanced, interconnected continent working together seamlessly and quickly. What is important is exploring how such initiatives can be expanded to help facilitate governance in a more complex regional regime. This kind of thinking can be extended to other areas such as the provision of digital national identity systems, digital passports, and virtual voting systems. The technology platforms for designing such systems already exist and are being deployed in the banking sector. They can be adapted to other areas to facilitate the effective management of regional activities. This will also inspire innovation in emerging fields such as blockchain, artificial intelligence, and machine learning. Managing complex regional regimes cannot be effectively accomplished without deploying equally complex technological systems. One of the risks that Africa faces is institutional ossification or stasis. This could happen if the various institutions that have been created become a barrier to change and innovation and seek to perpetuate their mandates despite shifts in reality. Institutional stasis is a common source of resistance to change and needs to be addressed. It is not uncommon for those who negotiated treaties to oppose any attempts to modify them. It is not uncommon in international circles for countries to shop for new forums for action because the framers of existing treaties oppose any changes to make them reflect changed circumstances. There are at least three factors that can help to mitigate this risk. The first is history. Africa set the tone from the creation of the OAU that institutions 270

seek to solve problems, and when the task is done, they are adjusted to perform new roles. The OAU was created largely to focus on decolonization, and when Mandela was freed, it was reconstituted as the AU to focus on new challenges. This spirit of constant review of institutions is critical for the evolution of the continent. The second mitigating factor is institutional diversity and complexity. What appears on the surface as the existence of too many overlapping institutions is in fact an asset for continuous renewal and innovation. The diversity and complexity provide a wide range of contact points through which new activities can be launched. A good example of this is the creation of the COMESA Virtual University, which exists because it is embedded in a regional organization and supported by existing universities. It would have been more difficult to create such an institution in a country without the institutional flexibility that is offered at the regional level. The third factor has less to do with stasis but more with the tendency to fall back on national identities as a way to drive regional operations. The founding fathers of pan-Africanism had more allegiance to their inner identity as Africans and less so as nationals of the countries they came from. This was aptly captured by Nkrumah when he said that he was African, not because he was born in Africa, but because Africa was born in him. The time has come to cultivate the next generation of pan-Africanists, because they are the ones who will drive the next phase of Africa’s regional integration. 10.3 Conclusion The creation of catalytic institutions is a necessary but insufficient condition for success. What is important is ensuring that these institutions provide the motivation needed to enable people to implement a shared vision.430 The guiding principles for such a common purpose are laid out in Agenda 2063. But the implementation of the elements of the vision will require continuous upgrading of the African people’s competence. There is no better option than to focus more attention on human resource development. Over the first 50 years of postcolonial existence, much attention was paid to the importance of Africa’s natural resources and how they could be leveraged to advance human wellbeing. Little will be achieved without greater investment in human resource development. Africa’s catalytic institutions will need to focus on this priority, especially given the youthful nature of the continent. The final source of motivation for action is the autonomy needed for people to innovate without excessive constraints, especially constraints arising from government control. It is acknowledged that such autonomy is essential for unleashing Africa’s entrepreneurial potential. But such potential does not only lie in the private sector. Entrepreneurship—viewed as the ability to generate innovation—needs to be nurtured in all spheres of human endeavor. It is only by nurturing the 271

capacity to innovate that Africa can effectively build resilient economies that show the rest of the world there are alternatives to being stuck in an equilibrium bubble.


Endnotes 1 2 3

4 5 6 7 8

9 10 11 12 13 14 15 16 17 18 19

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groups of countries will consolidate their internal integration, and in turn merge to form the bigger continental body. 157 OAU, Lagos Plan of Action for the Economic Development of Africa 1980–2000, Organisation of African Unity, Addis Ababa. 158 Asante, S. 1991. African Development: Adebayo Adedeji’s Alternative Strategies, Hans Zell, London, p. 65. 159 Anyanwu, J.C. 2015. “Foreign Direct Investment in Africa: Lessons for Economics,” in Monga, C. and Lin, J.Y., The Oxford Handbook of Africa and Economics, Vol. 2, Oxford University Press, Oxford, UK, pp. 227–246. 160 Examples include the United Nations Programme of Action for African Economic Recovery and Development (UN-PAAERD), the United Nations New Agenda for the Development of Africa (UN-NADAF), and the United Nations System-Wide Special Initiative for Africa (UN-SSI). 161 OAU, 1995. Relaunching Africa’s Economic and Social Development, The Cairo Agenda of Action, Organisation of African Unity, Addis Ababa. 162 World Bank, 1981. Accelerated Development in Sub-Sahara Africa: An Agenda for Action, World Bank Washington, D.C. 163 Stiglitz, J. 2013. The Price of Inequality: How Today’s Divided Society Endangers Our Future, W.W. Norton & Co, New York; Stiglitz, J. 2004. Globalization and its Discontents, W.W. Norton & Co, New York. 164 World Bank, 1989. Sub-Saharan Africa: From Crisis to Sustainable Development, World Bank, Washington, D.C, p. 152. 165 Balassa, B. 1961. The Theory of Economic Integration, Richard D. Irwin, Homewood, USA, pp. 1–3. 166 Seck, D. ed. 2014. Regional Economic Integration in West Africa, Springer, New York. 167 The treaty entered into force on May 12, 1994. 168 Oloruntoba, S.O. 2016. “ECOWAS and Regional Integration in West Africa: From State to Emerging Private Authority,” History Compass, Vol. 14, No. 7, pp. 295–303. 169 Marasinghe, M.L. “A Review of Regional Economic Integration in Africa with Particular Reference to Equatorial Africa,” International and Comparative Law Quarterly, Vol. 33, No. 1, pp. 39–56. 170 There seems to be support for this view, for apart from Article 33(1) which prohibits trade barriers at regional levels after the second stage, RECs are, in Article 30(2), designated as the entities to determine the program and modalities for elimination of customs duties at the level of RECs. Further, the third stage, under Article 6(2)(c), requires the establishment of regional FTAs “through the observance of the time-table”; but the RECs on the face of it have the right to agree upon their own “programme and modalities” for the elimination of customs duties. The question is whether these programs and modalities can differ from the timetable. 171 Kassim, L. 2015. “The Impact of Trade Liberalization on Export Growth and Import Growth in Sub-Saharan Africa,” in Ncube, M. et al. eds. Regional Integration and Trade in Africa, Palgrave Macmillan, London, pp. 47–68. 172 Doe, L. 2006. “Reforming External Tariffs in Central and West African Countries,” International Monetary Fund, Washington, D.C. 173 Article 6, AEC Treaty. See also Manelisi, G. 2000. Formation of the African Union, African Economic Community and Pan-African Parliament, Africa Institute of South Africa, Pretoria, South Africa. 174 Article 6(2)(f)(ii). 281

175 Geda, A. and Seid, E.H. 2015. “The Potential for Internal Trade and Regional Integration in Africa,” Journal of African Trade, Vol. 2, Nos. 1–2, pp. 19–50. 176 Mutharika, B.W.T. 1972. Toward Multinational Economic Cooperation in Africa, Praeger Publishers, New York. 177 Teubner, G. and Bankowski, Z. 1993. Law as an Autopoietic System, Blackwell, Oxford, UK. 178 Ruhl, J.B. et al. 2017. “Harnessing Legal Complexity,” Science, Vol. 355, No. 6332, pp. 1377–1378. 179 African Union Commission, Agenda 2063: The Africa We Want, African Union Commission, Addis Ababa. 180 Bhagwati, J. 1995 “U.S. Trade Policy: The Infatuation with Free Trade Agreements” in Bhagwati, J. and Krueger, A. eds. The Dangerous Drift to Preferential Trade Agreements, AEI Press, Washington, D.C. 181 Economic Commission for Africa, 2004. Assessing Regional Integration in Africa, Vol. I, Economic Commission for Africa, Addis Ababa, p. 39. 182 Ibid., pp. 40–54. 183 Economic Commission for Africa, 2006. Assessing Regional Integration in Africa, Vol. II, Economic Commission for Africa, Addis Ababa. 184 Khadiagala, G. 2016. “Region-Building in Eastern Africa,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 175–190 185 Lemarchand, R. 2016. “Region-Building in Central Africa,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 231–244. 186 Adejumobi, S. 2016. “Region-Building in West Africa,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 213–230. 187 Layachi, A. 2016. “Region-Building in North Africa,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 245–263. 188 On monetary unions, see Camara, I. 2015. “Impact of Monetary Unions on Trade: The Case of WAEMU,” in Ncube, M. et al. eds. Regional Integration and Trade in Africa, Palgrave Macmillan, London, pp. 53–172. 189 Makochekanwa, A. 2014. “Welfare Implications of COMESA-EAC-SADC Tripartite Free Trade Area,” African Development Review, Vol. 26, No. 1, pp. 186–202. 190 Avom, D. and Njikam, M.M. 2015. “Market Integration in the ECCAS Sub-Region,” in Ncube, M. et al. eds. Regional Integration and Trade in Africa, Palgrave Macmillan, London, pp. 71–90. 191 Abdullah, N. et al. 2015. “The Determinants of Trade and Trade Direction of Arab Maghreb Union,” Journal of Economic Cooperation & Development, Vol. 36, No. 3, pp. 123–148. 192 Franke, B. 2007. “Competing Regionalisms in Africa and the Continent’s Emerging Security Architecture,” African Studies Quarterly, Vol. 9, No. 3, pp. 31–64. 193 Adejumobi, S. 2016. “Region-Building in West Africa,” in Levine, D. and Nagar, D., eds., Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, Basingstoke, UK, p. 215. 194 Ibid., p. 215. 195 Adejumobi, S. 2016. “Region-Building in West Africa,” in Levine, D. and Nagar, D., eds., 282

Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, Basingstoke, UK, p. 218. 196 Tavares, R. 2011. “The Participation of SADC and ECOWAS in Military Operations: the Weight of National Interests in Decision Making,” African Studies Review, Vol. 54, No. 2, pp. 145–176. 197 Udogu, E.I. 1999. “Economic Community of West African States: From an Economic Union to a Peace-keeping Mission?” Review of Black Political Economy, Vol. 26, No. 4, p. 55. 198 Arthur, P. 2017. “Promoting Security in Africa through Regional Economic Communities (RECs) and the African Union’s African Peace and Security Architecture (APSA),” Insight on Africa, Vol. 9, No. 1, pp. 1–21. 199 Oppong, R.F. 2010. “The African Union, the African Economic Community and Africa’s Regional Economic Communities: Untangling a Complex Web,” African Journal of International and Comparative Law, Vol. 18, No. 1, pp. 92–103. 200 Kumar, S. et al. 2014. “Does Economic Integration Stimulate Capital Mobility? An Analysis of Four Regional Economic Communities in Africa,” Journal of International Financial Markets, Institutions & Money, Vol. 29, pp. 33–50. 201 Negota, G.M. 2001. The Impact of Transport Investment on Infrastructure and Economic Development, 20th South African Transport Conference, South Africa, 16th–20th July. 202 Anglin, D.G. 1983. “Economic Liberation and Regional Cooperation in Southern Africa: SADCC and PTA,” International Organization, Vol. 37, No. 4, pp. 681–711. 203 Ranganathan, R. and Foster, V. 2011. The SADC’s Infrastructure: A Regional Perspective, World Bank, Washington, D.C. 204 Ibid. 205 Havenga, J.H and Pienaar, W.J. 2012. “The Creation and Application of a National Freight Flow Model for South Africa,” Vol. 54, No. 1, pp. 2–13. 206 Op. cit. 207 Ibid., p. vii. 208 Ibid., p. vii. 209 SADC. 2012. Regional Infrastructure Development Master Plan, Southern African Development Community, Gaberone, Botswana, p. 4. 210 Ibid. 211 Mwapachu, J. 2017. Personal Communication, Dar es Salaam, Tanzania. 212 Mangachi, M.W. 2011. Regional Integration in Africa: East African Experience, Safari Books, Ibadan, Nigeria. 213 Buigut, S. 2016. “Trade Effects of the East African Community Customs Union: Hype versus Reality,” South African Journal of Economics, Vol. 84, No. 3, pp. 422–439. 214 Wolfe, B. 2011. Regional Integration in Africa: Lessons from the East African Community, South African Institute of International Affairs, Johannesburg, South Africa. 215 Adar, K.G. 2008. “Fast Tracking East African Political Federation: The Role and Limitations of the East African Legislative Assembly,” Africa Insight, Vol. 37, No. 4, pp. 76–97. 216 Possi, A. 2015. “Striking a Balance between Community Norms and Human Rights: The Continuing Struggle of the East African Court of Justice,” African Human Rights Law Journal, Vol. 15, No. 1, pp. 192–213. 217 Mulugetta, A. 2012. “Systemic Economic Transition of East African Community Customs Union,” Journal of Current Research in Global Business, Vol. 15, No. 24, pp. 108–120. 218 Davoodi, H. ed. 2012. The East African Community After Ten Years: Deepening Integra283

tion, Washington, D.C. 219 Negasi, M.Y. 2012. Regional Integration in Africa: Assessing Trade Effects of Regional Economic Integration in Africa at Sectoral Level, Lambert Academic Publishing, Saarbrücken, Germany. 220 Ebaidalla, E.M. and Yahia, A.M. 2014. “Performance of Intra-COMESA Trade Integration: A Comparative Study with ASEAN’s Trade Integration,” African Development Review, Vol. 26, Suppl. 1, pp. 77–95. 221 The members are Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. 222 COMESA, Reports of the Meetings of the Council of Ministers, CS/CM/… series, 1994 to 2017+. Lusaka, COMESA Secretariat. The secretariat surveys and domestication reports can be obtained through a request to the secretariat. 223 Sean Woolfrey. 2016. The Political Economy of Regional Integration in Africa—The Common Market for Eastern and Southern Africa (COMESA), University of Amsterdam, European Centre for Development Policy Management, Amsterdam. 224 Article 3 of the COMESA Treaty. 225 Article 4. 226 226. Ibid. 227 Article 164. 228 Article 4(4)(a); Vieira, C. and Vieira, I. 2013. “Monetary Integration in Eastern and Southern Africa: Choosing a Currency Peg for COMESA,” South African Journal of Economics, Vol. 81, No. 3, pp. 356–372. 229 COMESA. 2017. Report of the Thirty Seventh Meeting of the Council of Ministers, Lusaka, para. 256–268. 230 For instance, Gathii, J.T. 2015. “Sub-Regional Court or Employment Tribunal? The Legacy and Legitimacy of the COMESA Court of Justice”; Fabri, H.R., Howse, R. and Ulfstein, G. 2015. “The Legitimacy of International Trade Tribunals,” Loyola University, School of Law, Chicago, Research Paper No. 2015–012. Available at SSRN: https://ssrn.com/ abstract=2611362. 231 www.tradebarriers.org 232 COMESA. International Trade Statistics Bulletin, annual series, Lusaka, COMESA Secretariat. See also www.comstat.comesa.int, the freely-accessible COMESA statistical database. 233 For example, Bank of Uganda and Uganda Bureau of Statistics. 2011. Informal Cross Border Trade Survey Report, 2009 and 2010, Kampala; and see also Wanjiku, J. “Informal Cross Border Trade in Staple Foods in Eastern and Southern Africa”; and Kugonza, J. “Informal Cross Border Trade in Uganda: A Case Study of Mpondwe and Mutukula Customs Border Posts,” in COMESA. 2017. Key Issues in Regional Integration, Vol. V. COMESA Secretariat, Lusaka. 234 COMESA. 2017. Report of the Thirty Seventh Meeting of the Council of Ministers, Lusaka, para. 289. 235 COMESA. 2017. Report of the Thirty Seventh Meeting of the Council of Ministers, Lusaka, para. 315. 236 COMESA. 2017. Report of the Thirty Seventh Meeting of the Council of Ministers, Lusaka, para. 369. 237 COMESA. 2017. Report of the Thirty Seventh Meeting of the Council of Ministers, Lusaka, para. 436. 284

238 See for instance, COMESA. 2017. “Report of the Second Meeting of the Trade and Trade Facilitation Subcommittee held on 22–24 June 2017,” ref. CS/TCM/TTFS/2/2, COMESA Secretariat, Lusaka. 239 Articles 7 and 14–16 of the Treaty. 240 COMESA. 2017. Report of the Second Meeting of the Trade and Trade Facilitation Subcommittee, para. 142. Category A obligations are those to be implemented immediately upon entry into force of the WTO Trade Facilitation Agreement. The others require a transition period and capacity building. 241 UNCTAD. 2013. Economic Development in Africa Report 2013, United Nations Conference on Trade and Development, Geneva, pp. 11–43. 242 http://ec.europa.eu/eurostat/statistics-explained/index.php/Intra-EU_trade_of_the_most_ traded_goods 243 Musengele, B. et al. 2016. “Intra-COMESA Trade Potential, Opportunities and Challenges,” in COMESA, Key Issues in Regional Integration. Vol. IV, COMESA Secretariat, Lusaka. 244 Some examples include: UNECA. 2004. Assessing Regional Integration in Africa, United Nations Economic Commission for Africa, Addis Ababa; Kamau, N.L. 2010. “The Impact of Regional Integration on Economic Growth: Empirical Evidence from COMESA, EAC and SADC Trade Blocs,” American Journal of Social and Management Sciences, Vol. 1, No. 2, pp. 150–163; and Golit, P.D. and Adamu, Y. 2013. “Regional Integration Models and Africa’s Growth in the 21st Century: A Fitness Evaluation,” paper prepared for the African Economic Conference, Johannesburg, South Africa, October 28–30. 245 Balistreri, E. 2015. “Deep Integration in Eastern and Southern Africa: What are the Stakes?” Journal of African Economies, Vol. 24, No. 5, pp. 677–706. 246 UNECA, Assessing Regional Integration in Africa, Vol., 5, United Nations Economic Commission for Africa, Addis Ababa; Mavel, S. and Karingi, S. 2012. “Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of a Continental Free Trade Area followed by a Continental Customs Union,” paper presented at the 7th African Economic Conference Kigali, Rwanda, October 30–November 2. 247 For other publications analyzing the regional integration prospects of SADC, EAC, and COMESA, see: Gedaa, A. and Kebret, H. 2007. “Regional Economic Integration in Africa: A Review of Problems and Prospects with a Case Study of COMESA,” Journal of African Economies, Vol. 17, No. 3, pp. 357–394; Khandelwal, P. 2004. COMESA and SADC: Prospects and Challenges for Regional Trade Integration, International Monetary Fund, Washington, D.C.; Woolfrey, S. 2016. The Political Economy of Regional Integration in Africa: Common Market for Eastern and Southern Africa (COMESA), European Centre for Development Policy Management, Maastricht, The Netherlands. 248 Olayiwola, W. et al. 2015. “Economic Integration, Trade Facilitation and Agricultural Exports Performance in ECOWAS Sub-Region,” in Ncube, M. et al. eds. Regional Integration and Trade in Africa, Palgrave Macmillan, London, pp. 31–46. 249 Willenbockel, D. 2013. General Equilibrium Analysis of the COMESA-EAC-SADC Tripartite FTA, Institute for Development Studies, Sussex University, Brighton, UK. 250 Afesorgbor, S.K. 2017. “Revisiting the Effect of Regional Integration on African Trade: Evidence from Meta-Analysis and Gravity Model,” Journal of International Trade & Economic Development, Vol. 26, No. 2, pp. 133–153. 251 Mangeni, F.W. 2013. “The Political Economy of Integration in Africa: A Case Study of Issues to be addressed in the COMESA Customs Union,” in COMESA. Key Issues in Regional Integration, Vol. III, Common Market for Eastern and Southern Africa, Lusaka. 285

252 Willenbockel, D. 2013. General Equilibrium Analysis of the COMESA-EAC-SADC Tripartite FTA, Institute for Development Studies, Sussex University, Brighton, UK. 253 Estimates from the Kenya Revenue Authority are that collections increased from a third to half a billion dollars annually, yet Kenya reduced its prevailing customs duty rate of 35% to 25% on the band for finished products under the Common External Tariff of the EAC Customs Union. 254 ’Ofa, S.V. and Karingi, S. 2014. “Trade in Intermediate Inputs and Trade Facilitation in Africa’s Regional Integration,” African Development Review, Vol. 26, Suppl. 1, pp. 96–110. 255 For a review of the convergence between COMESA and SADC, see Nagar, D. 2016. “COMESA and SADC: The Era of Convergence,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 191–212. 256 Mavel, S. and Karingi, S. 2012. Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of the Continental Free Trade Area followed by the Continental Customs Union, selected paper for presentation at the 7th African Economic Conference, Kigali, Rwanda, October 30–November 2. 257 Iheduru, O.C. 2015. “Organized Business and Regional Integration in Africa,” Review of International Political Economy, Vol. 22, No. 1, pp. 1–31. 258 Oppong, R.F. 2014. “Legitimacy of Regional Economic Integration Courts in Africa,” African Journal of Legal Studies, Vol. 7, No. 1, pp. 61–85. 259 Polytol Paints & Adhesives Manufacturers Co. Ltd v. The Republic of Mauritius, COMESA Court of Justice, Reference no. 1 of 2012, Lusaka. 260 The systems consist of an online NTB reporting and monitoring system, a standing agenda item where the secretariat presents a report on NTBs during the meetings of the Technical Committee on Trade and Customs for consideration and resolution, provision for the secretariat to assist through producing technical opinions and facilitating bilateral consultations to resolve NTBs, and national NTB committees and focal points that coordinate the resolution of NTBs. 261 Robertson, C. 2012. The Fastest Billion: The Story behind Africa’s Economic Revolution, Renaissance Capital, London. 262 UNCTAD. 2014. World Investment Report 2014, United Nations Conference on Trade and Development, Geneva. 263 Fouda, R. 2014. “Empirical Result: West and Central Africa Standardization on Port Logistics,” International Journal of Trade, Economics and Finance, Vol. 5, No. 3, pp. 263–269; Mwemezi, J. and Huang, Y. 2012. “Inland Container Depot Integration into Logistics Networks Based on Network Flow Model: The Tanzanian Perspective,” African Journal of Business Management, Vol. 6, No. 24, pp. 7149–7157; Mpita, S. et al. 2016. “Integrated Facility Location Planning and Demand Assessment for Humanitarian Logistics: A Case Study in the Democratic Republic of the Congo,” Management Dynamics, Vol. 25, No. 1, pp. 34–50. 264 For more on why trade facilitation is important in Africa, see, for example, Rippel, B. 2011. Why Trade Facilitation Is Important for Africa, World Bank, Washington, D.C.; Economic Commission for Africa. 2013. Trade Facilitation from an African Perspective, Economic Commission for Africa, Addis Ababa; Elbeshbishi, A. 2013. Trade Facilitation in Africa: Challenges, Opportunities, and Progress, paper prepared for the OIC High Level Forum on Trade Facilitation and Single Window for Enhanced Regional Economic Cooperation, Casablanca, Morocco, February 25–26. 265 The second of the seven clusters of the Action Plan for Boosting Intra-Africa Trade is on trade facilitation, covering removal of roadblocks, simplification of procedures and docu286

mentation, establishment of one-stop-border-posts, and integrated border management. 266 Collier, P. 2008. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, Oxford University Press, New York, p. 161. 267 Robertson, et al. 2012. The Fastest Billion: The Story behind Africa’s Economic Revolution, Renaissance Capital, London, pp. 33–34. 268 The General Agreement on Tariffs and Trade, 1994, Articles V, VIII, and X. 269 Articles 45, 46 and 49 of the Treaty Establishing the Common Market for Eastern and Southern Africa. 270 Articles 8(5) and 9(4) of the COMESA Treaty. 271 www.tradebarriers.org 272 Valensisi, G. et al. 2016. “The Trade Facilitation Agreement and Africa’s Regional Integration,” Canadian Journal of Development Studies, Vol. 37, No. 2, pp. 1–21. 273 Reducing the cost of doing business increases the profitability of business (especially SMEs), creates more jobs through successful and new businesses, and provides much needed incomes for families. 274 This section draws also on information provided by the Federation of International Freight Forwarders (FIATA). 275 World Bank. 2012. Why Does Cargo Spend Weeks in Sub-Saharan African Ports? Lessons from Six Countries, World Bank, Washington, D.C. 276 African Development Bank. 2016. Africa Visa Openness Report, 2016, African Development Bank, Abidjan, Ivory Coast. 277 FIATA is a non-governmental organization representing an industry of about 40,000 forwarding and logistics firms. It employs nearly 10 million people in 160 countries. It was founded in Vienna, Austria in 1926. 278 Njoya, E.T. 2016. “Africa’s Single Aviation Market: The Progress So Far,” Journal of Transport Geography, Vol. 50, pp. 4–11. 279 This part draws on a visit to Chirundu one-stop-border-post and interviews conducted by Francis Mangeni. 280 On the spot interview with truck drivers and customs authorities at the Chirundu one-stopborder-post. 281 Ukpe, A.I. 2010. “Will EPAs Foster the Integration of Africa Into World Trade?” Journal of African Law, Vol. 54, No. 2, pp. 212–231. 282 Niada, L. 2011. “The Human Right to Medicines in Relation to Patents in Sub-Saharan Africa: Some Critical Remarks,” International Journal of Human Rights, Vol. 15, No. 5, pp. 700–727. 283 Mangeni, F. 2002. African Influence at the World Trade Organization: A Study for a Programme on Assisting Member States in Negotiations at the World Trade Organization. COMESA Secretariat, Lusaka. 284 Mangeni, F. and Karingi, S.N. 2008. Towards the African Template for Economic Partnership Agreements: Explanation and Recommendations, United Nations Economic Commission for Africa, Addis Ababa; ECA. 2008. North-South FTAs After All? A Comprehensive and Critical Analysis of the Interim Economic Partnership Agreements, United Nations. Economic Commission for Africa, Addis Ababa. 285 See Galtung, G. 1975. The Lomé Convention and Neo-Capitalism, University of Oslo; Isebill V. and Gruhn, I.V. 1976. “The Lomé Convention: Inching towards Independence,” International Organization, Vol. 30, No. 2, pp. 241–262; Green, R.H. 1976. “The Lomé Convention: Updated Dependence or Departure Toward Collective Self-Reliance?” Afri287

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24, No. 7, pp. 1–21; Mulangu, F. 2015. “Preferential Trade Agreements, Employment and Productivity: Evaluating the Impacts of AGOA and its Apparel Provisions on African Firms,” Ghanaian Journal of Economics, Vol. 3, pp. 4–27. 304 Ismail, F. 2017. “The AGOA Extension and Enhancement Act of 2015, the SA-US AGOA Negotiations and the Future of AGOA,” World Trade Review, Vol. 16, No. 3, pp. 527–544. 305 This section draws from Juma, C. 2015. “China-Africa Cooperation: The Evolution of Diplomatic Agency,” in Gadzala, A.W. ed., Africa and China: How Africans and Their Governments are Shaping Relations with China, Rowman & Littlefield, Lanham, MD, USA. 306 Wright, P. et al. 2001. “A Reexamination of Agency Theory Assumptions: Extensions and Extrapolations,” Journal of Socio-Economics, Vol. 30, No. 5, pp. 413–429. 307 Volberding, P. et al. 2017. China and Uranium: Possibilities for Agency in Statecraft in Niger and Namibia, China Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington, D.C. 308 Edoho, F. 2011. “Globalization and Marginalization of Africa: Contextualization of ChinaAfrica Relations,” Africa Today, Vol. 58, No. 1, pp. 103–124. 309 Berhe, M.G. 2013. “Introduction,” in Berhe, M.G. and Hongwu, L. eds., China-Africa Relations Governance, Peace and Security, Institute for Peace and Security Studies, University of Addis Ababa, pp. 1. 310 Bräutigam, D. 2009. The Dragon’s Gift: The Real Story of China in Africa, Oxford University Press, New York; French, H. 2014. China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa, Alfred A. Knopf, New York. 311 Zhao, S. 2014. “A Neo-Colonialist Predator or Development Partner? China’s Engagement and Rebalance in Africa,” Journal of Contemporary China, Vol. 23, No. 90, pp. 1033– 1052. 312 Asongu, S.A. 2013. “The Economic Consequences of China-Africa Relations: Debunking Myths in the Debate,” Journal of Chinese Economic and Business Studies, Vol. 11, No. 4, pp. 261–277. 313 Eisenman, J. 2015. “China-Africa Trade: Causes, Consequences, and Perceptions,” in Gadzala, A.W. ed., Africa and China: How Africans and Their Governments are Shaping Relations with China, Rowman & Littlefield, Lanham, MD, USA. 314 Sun, Y. 2014. The Sixth Forum on China-Africa Cooperation: New Agenda and New Approach? Brookings Institution, Washington, D.C. 315 People’s Republic of China. 2013. China-Africa Economic and Trade Cooperation, Information Office of the State Council, People’s Republic of China, Beijing. 316 Niu, C. 2014. “China’s Educational Cooperation with Africa: Toward New Strategic Partnerships,” Asian Education and Development Studies, Vol. 3, No. 1, pp. 31–45. 317 Large, D. 2008. “Beyond ‘Dragon in the Bush’: The Study of China-Africa Relations,” African Affairs Vol. 107, No. 426, pp. 45–61. 318 Wang, J. and Zou, J. 2014. “China Goes to Africa: A Strategic Move?” Journal of Contemporary China, Vol. 23, No. 90, pp. 1113–1132. 319 Central Intelligence Agency. 1955. Soviet Economic Assistance to the Sino-Soviet Bloc Countries, United States Central Intelligence Agency, Langley, VA, USA, p. 59. 320 Shen, Z. and Xia, Y. 2011. “The Great Leap Forward, the People’s Commune and the SinoSoviet Split,” Journal of Contemporary China, Vol. 20, No. 72, pp. 861–880. 321 Scalapino, R. “Sino-Soviet Competition in Africa,” Foreign Affairs, Vol. 42, No. 4, pp. 640–654. 289

322 Gonzalez-Vicente, R. 2011. “China’s Engagement in South America and Africa’s Extractive Sectors: New Perspectives for Resource Curse Theories,” Pacific Review, Vol. 24, No. 1, pp. 65–87. 323 Kaplinsky, R. and Farooki, M. 2011. How China Disrupted Global Commodities: The Reshaping of the World’s Resource Sector, Routledge, New York. 324 Kaplinsky, R. and Morris, M. 2009. “Chinese FDI in Sub-Saharan Africa: Engaging with Large Dragons,” European Journal of Development Research, Vol. 21, No. 1, pp. 551–569. 325 Carbone, M. 2014. “The European Union and China’s Rise in Africa: Competing Visions, External Coherence and Trilateral Cooperation,” Journal of Contemporary African Studies, Vol. 29, No. 2, pp. 203–221. 326 Chun, Z. 2014. China-Zimbabwe Relations: A Model of China-Africa Relations? South African Institute of International Affairs, Johannesburg, South Africa; Alao, A. 2014. China and Zimbabwe: The Context and Contents of a Complex Relationship, South African Institute of International Affairs, Johannesburg, South Africa. 327 Renard, M.-F. 2011. China’s Trade and FDI in Africa, African Development Bank, Tunis, Tunisia. 328 Bai, C.-E. and Qian, Y. 2001. “Infrastructure Development in China: The Cases of Electricity, Highways, and Railways,” Journal of Comparative Economics, Vol. 38, No. 1, pp. 34–51. 329 Démurger, S. 2001. “Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?” Journal of Comparative Economics, Vol. 29, No. 1, p. 95. 330 Vhumbunu, C. 2016. “Enabling African Regional Infrastructure Renaissance through the China-Africa Partnership: A Trans-Continental Appraisal,” International Journal of China Studies, Vol. 7, No. 3, pp. 271–300. 331 Anthony, R. 2013. “Infrastructure and influence: China’s presence on the coast of East Africa,” Journal of the Indian Ocean Region, Vol. 9, No. 2, p. 134. 332 Anyanwu, J. 2014. “Factors Affecting Economic Growth in Africa: Are There Any Lessons from China?” African Development Review, Vol. 26, No. 3, pp. 468–493. 333 Konijn, P. 2014. Chinese Resources-For-Infrastructure (R4I) Swaps: An Escape from the Resource Curse? South African Institute of International Affairs, Johannesburg, South Africa, p. 24. 334 Mthembu-Salter, G. 2009. Elephants, Ants and Superpowers: Nigeria’s Relations with China, South Africa Institute of International Affairs, Johannesburg, South Africa. 335 Tang, X. 2016. Chinese Investment in Ghana’s Manufacturing Sector, China-Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington, D.C, p. 1. 336 Tang, X. 2016. Chinese Investment in Ghana’s Manufacturing Sector, China-Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington, D.C., p. 1. 337 Chen, Y. et. al. 2016. Learning from China? Manufacturing Investment and Technology Transfer in Nigeria, China-Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington, D.C. 338 Gakunu, P. et al. 2015. If Africa Builds Nests, Will the Birds Come? Comparative Study of Special Economic Zones in Africa, International Poverty Reduction Center in China, Beijing, p. 6. 339 People’s Republic of China. 2010. China-Africa Economic and Trade Cooperation, Information Office of the State Council, People’s Republic of China, Beijing. 290

340 Makochekanwa, A. 2014. “Welfare Implications of COMESA‐EAC‐SADC Tripartite Free Trade Area,” African Development Review, Vol. 26, No. 1, pp. 186–202 341 South Sudan became independent in 2011 and in 2016 was admitted as a Partner State in the East African Community, thus becoming a member of the COMESA-EAC-SADC Tripartite Arrangement, raising the total number of Tripartite countries to 27. 342 Mangeni, F.W. 2013. “Trade Remedies in the Tripartite Free Trade Area,” in COMESA, Key Issues in Regional Integration, Vol. III, Common Market for Eastern and Southern Africa, Lusaka. 343 Reports on the preparatory activities are filed with the COMESA, EAC, and SADC secretariats, in the TP/TTF/. . . series, as reports of the meetings of the Tripartite Task Force (TTF) which serves as the secretariat of the Tripartite Arrangement. 344 The other areas included tariff schedules, rules of origin, technical standards, sanitary and phytosanitary measures, customs cooperation, transit, trade facilitation, trade remedies, dispute settlement, services and competition, investment, and intellectual property policies. 345 The reports of the negotiation sessions are filed with the COMESA, EAC, and SADC secretariats in the TP/ . . . series; TP/TTNF/ . . . for the technical trade negotiations, TP/TSCO/ . . . for the meetings of senior officials, and TP/TSMC/ . . . for the meetings of the ministers. 346 Saurombe, A. 2013. “A Synopsis of Problems and Prospects of SADC, EAC and COMESA Tripartite Free Trade Area,” International Journal of Liability and Scientific Enquiry, Vol. 6, Nos. 1–3, pp. 116–124. 347 COMTRADE, 2017 data. 348 Maricov, E. 2016. “Current Trends in the Economic Development of the Participating in the Tripartite Free Trade Area Regional Economic Communities,” Journal of Economics and Political Economy, Vol. 3, No. 1, pp. 81–104. 349 Gelan, A. and Omore, A. 2014. “Beyond Tariffs: The Role of Non-Tariff Barriers in Dairy Trade in the East African Community Free Trade Area,” Development Policy Review, Vol. 32, No. 5, pp. 523–543. 350 Baldwin, R. 2011. 21st Century Regionalism: Filling the gap between 21st Century Trade and 20th Century Trade Rules, World Trade Organization, Geneva. 351 Ibid. 352 Baldwin, R. 2016. The Great Convergence: Information Technology and the New Globalisation, Harvard University Press, Cambridge, USA. 353 Mangeni, F. 2013. “Trade Remedies in the Tripartite Free Trade Area,” in COMESA. Key Issues in Regional Integration, Vol. II, Common Market for Eastern and Southern Africa, Lusaka. 354 Tripartite Member or Partner States that are WTO Members are the following: Angola (1996), Botswana (1995), Burundi (1995), DRC (1997), Djibouti (1995), Egypt (1995), Kenya (1995), Lesotho (1995), Madagascar (1995), Malawi (1995), Mauritius (1995), Mozambique (1995), Namibia (1995), Rwanda (1996), Seychelles (2015), South Africa (1995), Swaziland (1995), Tanzania (1995), Uganda (1995), Zambia (1995), and Zimbabwe (1995). Observers are Comoros, Ethiopia, Libya, and Sudan; while Eritrea is neither a member nor an observer. South Sudan is yet to join COMESA, EAC, or SADC, though it has been recognized at the UN and African Union as a new nation. 355 For analyses on trade remedies in Africa, see, for example, Illy, O. 2015. “Trade Remedies in Africa: Experiences, Challenges, and Prospects,” Bridges Africa, Vol. 4, No. 3; and Gathii, J.T. 2011. African Regional Trade Agreements as Legal Regimes, Cambridge University Press, Cambridge, UK, pp. 298–341. 291

356 On trade disputes, see, for example, Schneidman, W. 2016. “Africa, TPP, and TTIP: Integration or Isolation?” Africa in Focus, Brookings Institution, Washington, D.C. 357 COMESA Secretariat, 2015. A Comparative Assessment of the Competitiveness of Sugar Production in the COMESA Region, Common Market for Eastern and Southern Africa, Lusaka. 358 One of the latest interesting articulations of Africa’s rising is Charles Robertson’s The Fastest Billion, Renaissance Capital, Greenwich, CT, USA, 2012. As usual, there must be some caution, and it’s important to remember that development for the last 100 years has been technology-led, and so it must be in Africa as well, indeed as eloquently explained by Peter Diamandis and Steven Kotler in their Abundance: The Future is Better Than You Think, Free Press, Washington, D.C., 2012. 359 Estimates are that some investigating authorities require at least US$600,000 per year in recurrent costs and staffing levels of 100. 360 Cheru, F. 2016. “Developing Countries and the Right to Development: A Retrospective and Prospective African View,” Third World Quarterly, Vol. 37, No. 7, pp. 1268–1283. 361 Grigorescu, A. and Komp, E. 2017. “The ‘Broadening’ of International Human Rights: The Cases of the Right to Development and Right to Democracy,” International Politics, Vol. 54, No. 2, pp. 238–254. 362 Fukuda-Parr, S. 2012. “The Right to Development: Reframing a New Discourse for the Twenty-First Century,” Social Research, Vol. 79, No. 4, pp. 839–864. 363 UNDP. 2011. Human Development and Regional Integration: A Pathway for Africa, United Nations Development Programme, New York. 364 Yusuf, S. 2012. “The Rise of Judicially Enforced Economic, Social, and Cultural Rights: Refocusing Perspectives,” Seattle Journal for Social Justice, Vol. 10, No. 2, pp. 753–791. 365 UNCTAD, Economic Development in Africa Report 2013, United Nations Conference on Trade and Development, Geneva, pp. 11–43. 366 Rule 2 of the ECCAS protocol on Rules of Origin, annexed to the treaty, in addition to the usual methods of place of consignment and classification, substantial transformation, and equity holding, includes a power for the Council of Ministers to draw a list of products deemed to originate in a member state on account of their importance for the development of the member states: r. 2(1)(b)(iv). 367 The lists are typically drawn subsequent to conclusion of treaties, whereas they should be an integral part of the negotiating process, if the treaty is to comply with the requirement in Articles XXIV GATT and Article V of GATS for substantial coverage of the intra-community trade. 368 Thus, whereas under Articles 28(1) of the SADC Treaty and 79(4) of the ECCAS Treaty, the community budget is funded by contributions made by members, under Articles 168(1)–(2) of the COMESA Treaty and 72 of the 1993 ECOWAS Treaty, a common market or community levy is provided for, in addition to members’ contributions (Articles 166–167 and 73 respectively). 369 Uzodike, U.O. 2009. “The Role of Regional Economic Communities in Africa’s Economic Integration: Prospects and Constraints,” Africa Insight, Vol. 39, No. 2, pp. 26–42. 370 COMTRADE, 2017 data. 371 Apuuli, K. 2016. “The African Union and Regional Integration in Africa,” in Levine, D. and Nagar, D. eds. Region-Building in Africa: Political and Economic Challenges, Palgrave Macmillan, New York, pp. 144–156. 372 Mevel, S. and Karingi, S. 2012, Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of a Continental Free Trade Area 292

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INDEX 3D printing 238, 250, 251 academia 52, 64, 114, 135, 209, 212, 255, 259 accountability 44, 106, 174, 178, 232, 244 acquis 101, 142, 145, 146, 191, 193, 194, 204, 221, 222, 228 Action Plan for Boosting Intra-Africa Trade 208, 286 Addis Ababa Declaration of the Heads of State and Government 50 Adedeji, Adebayo 3, 15, 45, 70, 273, 276, 279, 281 aerospace, see space technology Africa Centres for Disease Control and Prevention (Africa CDC) 216 Africa Growth and Opportunity Act (AGOA) 157, 158, 157, 159, 288, 289 Africa-India Framework for Enhanced Cooperation 149 Africa Science Observatory 113 African Academy of Engineering 253 African Academy of Sciences 113, 253 African Charter on Human and Peoples’ Rights 204 African Continental Free Trade Area (AFTA), see also Continental Free Trade Area 9, 11, 14, 17, 171, 173, 187, 203, 204, 205, 208, 209, 210, 211, 213, 214, 219, 220, 221, 222, 223, 225, 226, 227, 228, 229, 230, 231, 234, 265, 288, 293 African Development Bank 95, 126, 239, 287, 290 African Economic Community (AEC)—Treaty 6, 10 ,11, 41, 42, 48, 49, 50, 51, 52, 53, 57, 58, 62, 63, 66, 67, 77, 84, 87, 90, 91, 95, 144, 170, 174, 202, 206, 207, 208, 209, 257, 261, 265, 281, 283 African Peace and Security Council 232 African Reference Frame (AFREF) 219 African Resource Management Constellation (ARMC) 219 African Union (AU) 7, 9, 37, 39, 45, 53, 58, 65, 66, 69, 70, 73, 84, 85, 94, 95, 98, 102, 104, 107, 110, 113, 117, 119, 123, 134, 140, 144, 145, 146, 148, 149, 156, 158, 160, 166, 170, 171, 175, 203, 204, 208, 209, 210, 213, 214, 215, 216, 217, 218, 219, 220, 223, 225, 226, 228, 230, 231, 232, 233, 234, 236, 244, 257, 261, 264, 271, 273, 274, 277, 278, 279, 281, 282, 283, 288, 291, 292, 293 African Union Architecture for Peace and Security 119 African, Caribbean, and Pacific (ACP) countries 19, 138, 139, 141, 142, 143, 144, 146, 147, 248, 288 Afro-pessimism 18


Agenda 2063 20, 64, 65, 84, 98, 224, 225, 231, 244, 265, 268, 271, 274, 282 Agreement on Movement of Business Persons 186 agriculture 46, 50, 51, 52, 54, 56, 64, 84, 89, 90, 94, 95, 113, 114, 117, 126, 137, 148, 149, 152, 153, 205, 206, 219, 226, 242, 250, 252, 253, 256, 258 agricultural—development, machinery 16, 56, 62, 70, 87, 94, 96, 110, 112, 117, 135, 140, 141, 153, 166, 206, 229, 248 agro-processing 185, 224 airline 66, 78 air transport 64, 76, 77, 94, 96, 123, 225 Algeria 30, 68 Ali Baba 118 All-Africa Peoples Conference 46 Amin, Idi 78 Angola 38, 74, 75, 157, 159, 181, 191, 209, 215, 221, 247, 291 anti-concentration 221, 223, 229 antidumping 195, 196, 197, 198 apartheid 49, 54, 64, 67, 74, 75 Arab FTA 104, 230 Arab Maghreb Union (AMU) 66, 68, 69, 208, 221, 222, 229, 282 Arab Spring 68 arbitration 207, 227 Argentina 29, 201 arrow of time 27, 87 artificial intelligence 254, 270 arts 110 Asante, S. 45, 279, 280, 281 Asian Infrastructure Investment Bank (AIIB) 239 AU Peace and Security Committee 215 AU Support to the Ebola Outbreak in West Africa (ASEOWA) 215, 216 Australia 217, 237, 293 automation 211, 252, 254 automobile(s) 157, 158 balance of trade 152, 153 Balewa, Abubakr Tafawa 71 bank(s)(ing)—development, PanAfrican banks (PABs), regulations, Trade and Development 34, 35, 57, 78, 88, 93, 130, 137, 244, 245, 247, 248, 249, 270 Barrow, Adama 69, 70 Belgium 30, 245, 275 Benin 15, 71, 288 Berhe, M.G. 160, 289 Berlin Conference 25, 30 Bhagwati, Jagdish 65, 282 Biafra 31, 276 bilateral agreement(s) 108, 109 bilateral investment treaty(ies) 113 biometric system 68, 74 biosafety 216 biotechnology 13, 56, 150, 152 blockchain 270

borrowing—loans, credit 32, 188 Botswana 74, 75, 76, 144, 181, 195, 197, 198, 201, 209, 283, 291 Brazil 135, 143, 200, 201, 216, 253, 288 brewing 13 Bridon International Ltd 197 British 15, 31, 43, 126, 163, 177, 197, 248, 274, 276 broadband 34, 131, 243 broadcasting 13 budget, national 64, 79, 80, 87, 105, 107, 176, 215, 231, 233, 234, 258, 260, 262, 264, 292 Burkina Faso 16 Burundi 73, 78, 83, 91, 92, 93, 94, 98, 101, 103, 148, 154, 181, 191, 197, 198, 209, 284, 291 business start-ups 241 Cameroon 16, 252 capacity-building—negotiation, technical 260 capital 13, 14, 29, 43, 51, 67, 70, 74, 82, 88, 97, 99, 111, 121, 126, 137, 149, 165, 190, 194, 200, 207, 209, 213, 215, 228, 241, 244, 245, 246, 248, 250, 257, 259 capital goods 97, 99, 137, 149, 190 cargo delivery 251 Caribbean Forum (Cariforum) 141, 143, 145, 146, 147 Casablanca Group 30 cell phones, see mobile phones 34 cement 229 Central African Economic and Monetary Community (CEMAC) 16, 64, 66, 68 Central African Republic 16 Central Railway Project 83 certificate(s) of origin 230 Chad 16, 157 Chamber of Commerce 152 chaos 10, 24, 25, 27, 30, 32, 33, 39, 41, 43, 62, 63, 65, 71, 83, 87, 170, 171, 266 cheetah 38, 268 child labor 157 children 43, 268 China 7, 14, 47, 62, 94, 116, 133, 134, 135, 136, 138, 143, 156, 157, 159, 160, 161, 162, 163, 164, 165, 166, 167, 201, 208, 223, 229, 239, 240, 242, 253, 280, 288, 289, 290 civil society 73, 135, 149, 155, 196, 207, 212, 239, 255, 260 climate change 68, 112, 134, 138, 150, 152, 210, 218, 240, 252, 268 cluster development(s) 185 coffee 152, 153, 236 Cold War 32, 162, 276, 280 Collier, Paul 117, 287 colonial—occupiers, rule 9, 10, 14, 15, 16, 20, 24, 25, 28, 29, 30, 31, 32, 33, 42, 48, 74, 75, 115, 138, 160, 162, 163, 231, 241, 248 colonialism, see also colonial 18, 42,

43, 45, 48, 49, 138, 139, 160, 167, 278, 279, 280 COMESA Court of Justice 89, 91, 107, 108, 109, 119, 284, 286 COMESA Virtual University 263, 270, 271 commodity prices 252, 269 Common External Tariff (CET) 97, 99, 100, 101, 102, 104, 111, 137, 286 Common Market for Eastern and Southern Africa (COMESA) 61, 11, 14, 17, 18, 54, 59, 62, 64, 66, 67, 68, 77, 80, 81, 82, 85, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 126, 131, 133, 135, 137, 138, 140, 144, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 166, 170, 172, 174, 175, 181, 182, 184, 187, 188, 191, 194, 198, 199, 200, 201, 203, 207, 208, 209, 210, 211, 221, 222, 223, 227, 229, 233, 246, 247, 262, 263, 265, 270, 271, 282, 284, 285, 286, 287, 288, 291, 292, 295 Common Tariff Nomenclature 93, 99, 122 community engagement 242 Community of Sahel-Saharan States (CENSAD) 66, 68, 221, 222 Comoros 74, 91, 93, 144, 191, 197, 209, 284, 291 comparative advantage 29, 36 competition—policy 15, 55, 69, 77, 82, 104, 123, 126, 128, 135, 136, 142, 149, 154, 157, 165, 175, 176, 182, 192, 195, 196, 197, 200, 208, 240, 244, 256, 291 competitiveness 16, 81, 97, 99, 100, 110, 116, 117, 123, 128, 129, 131, 133, 137, 153, 156, 164, 175, 225, 255 complexity—economic 6, 7, 17, 24, 27, 33, 36, 39, 41, 63, 64, 65, 73, 79, 83, 87, 170, 203, 214, 217, 235, 248, 263, 266, 269, 270, 271 Comprehensive Africa Agriculture Development Program (CAADP) 94 computer(s)—programming 13, 131, 155 conferences of independent African states 46 Congo 16, 30, 38, 66, 73, 74, 76, 92, 118, 125, 181, 191, 217, 221, 269, 284, 286 Congolese music 38 consensus-building 212 conservation 38, 77 consumer—class, groups, protection 97, 105, 112, 192, 196, 210, 262 Continental Common Market 103 Continental Customs Union 88, 98, 103, 209, 285, 286, 288, 293 Continental Free Trade Area (CFTA)

9, 14, 56, 58, 59, 64, 69, 209, 224, 225, 226, 265, 285, 286, 288, 292 continental integration 14, 18, 62, 66, 67, 69, 84, 88, 89, 90, 91, 96, 103, 104, 109, 110, 115, 140, 147, 148, 174, 186, 208, 211, 214, 280 cooperation—economic, industrial, Afro-Chinese 15, 20, 42, 43, 46, 48, 49, 50, 51, 52, 53, 54, 55, 62, 67, 68, 70, 71, 72, 73, 75, 76, 78, 84, 90, 95, 110, 111, 121, 124, 125, 126, 130, 131, 139, 142, 146, 147, 148, 149, 150, 151, 152, 153, 154, 160, 161, 162, 163, 164, 165, 166, 175, 177, 180, 186, 189, 190, 192, 202, 204, 209, 212, 217, 218, 221, 224, 225, 227, 234, 239, 240, 244, 253, 256, 262, 263, 269, 291 copper 152, 153 corporate social responsibility 113, 156 corridor development, see road and rail 156 corruption 32, 72, 83, 117, 157, 162, 239 Côte d’Ivoire 69, 70, 71, 145 Cotonou Agreement 138, 141, 145, 288 coup, military 78 court(s) 65, 78, 79, 80, 81, 88, 92, 108, 106, 107, 208, 109, 119, 205, 227, 232 Court of Appeal for East Africa 15 Coveney, P. 27, 275 credit 18, 32, 123, 155, 161, 244, 246 crowd funding 216 culture 57, 106, 127, 149, 213 currency, African 57, 78, 83, 85, 136 Customs Management Act (CMA) 80, 87, 102 Customs Management Regulations 99, 111, 122 customs—cooperation, duties, procedures, standards, union 6, 16, 18, 47, 48, 52, 53, 54, 55, 56, 63, 66, 67, 68, 70, 78, 81, 82, 87, 88, 89, 90, 91, 92, 93, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 107, 108, 109, 110, 111, 112, 116, 117, 119, 120, 121, 122, 124, 125, 127, 128, 129, 131, 136, 137, 138, 140, 143, 145, 146, 147, 148, 175, 177, 179, 180, 182, 184, 186, 189, 190, 192, 195, 204, 206, 207, 209, 210, 211, 212, 220, 221, 222, 225, 227, 228, 229, 230, 231, 233, 234, 255, 256, 281, 286, 287, 291 Dahomey 15, 71 debt, foreign 45, 165, 256 decolonization 11, 12, 14, 15, 42, 43, 44, 45, 46, 47, 48, 49, 67, 98, 138, 171, 266, 267, 268, 271 delay 97, 126, 130, 225 democracy 31, 44, 64, 69, 72, 73, 145, 156, 157, 158, 162, 268 democratic change 31 Democratic Republic of Congo 66, 73, 74, 76, 221

Denmark 138, 280 Department for International Development (DFID) 177 derogation 91, 97, 101, 109 desertification 16, 51, 64, 68 destiny 28, 134, 139, 148 development—assistance, industrial, integration, agricultural 5, 7, 10, 12, 14, 16, 17, 18, 20, 24, 31, 32, 34, 37, 38, 39, 41, 42, 45, 46, 47, 48, 49, 50, 51, 52, 53, 55, 56, 57, 58, 62, 63, 64, 67, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 81, 83, 84, 85, 88, 90, 94, 95, 96, 102, 105, 106, 109, 110, 111, 112, 113, 116, 117, 118, 121, 122, 123, 124, 125, 126, 129, 131, 133, 134, 135, 136, 137, 138, 139, 141, 142, 143, 145, 146, 147, 149, 150, 151, 152, 153, 154, 155, 156, 157, 159, 160, 162, 163, 164, 165, 166, 170, 172, 175, 185, 186, 192, 193, 201, 203, 204, 205, 206, 208, 212, 217, 218, 219, 224, 225, 226, 229, 233, 234, 235, 236, 237, 238, 239, 241, 242, 243, 244, 246, 247, 248, 249, 250, 253, 255, 256, 261, 262, 263, 264, 266, 267, 268, 269, 270, 271, 292 diaspora 47, 150 Digital Bridge Institute 34 Digital Free Trade Zone 118 digitization 80, 85, 230 diplomacy—economic, trade 19, 47, 55, 70, 72, 160, 166, 219, 253, 259 diplomatic engagement 160, 162 disease, see public health 141, 215, 216 disequilibrium 12, 24, 62, 170 dispute settlement 135, 141, 175, 186, 187, 190, 197, 204, 209, 212, 221, 227, 234, 291 dissipative structure 27 diversification—product 37, 135, 136, 142, 154, 159, 224, 236, 237, 269 Djibouti 91, 93, 94, 122, 209, 284, 291 Doctors Without Borders/Médecins Sans Frontières (MSF) 217 domestic industries 101, 105, 137, 195, 197, 201, 223, 256 donor funding, see also development assistance 51, 232 drones 219, 250, 251 drought 32, 51, 64, 68, 199, 215, 268 drugs 222, 238 Du Bois, William E.B. 43 dumping, see antidumping 195, 196, 197 duties, see also tariffs 16, 45, 54, 55, 70, 81, 82, 87, 90, 91, 92, 95, 97, 98, 99, 100, 107, 108, 109, 110, 111, 119, 120, 125, 130, 136, 143, 144, 145, 146, 147, 152, 157, 180, 184, 189, 190, 195, 210, 220, 221, 223, 228, 229, 231, 233, 256, 281 duty—drawback, -free zones 72, 88, 91, 92, 97, 98, 99, 100, 101, 102, 105, 107, 108, 111, 119, 137, 139,


143, 155, 157, 182, 191, 197, 198, 199, 200, 204, 205, 221, 222, 224, 228, 248, 286 duty-free-quota-free (DFQF) 119 duty-free-tariff-preference (DFTP) regime 155 East African Community (EAC) 11, 14, 18, 43, 59, 64, 66, 67, 73, 77, 78, 79, 80, 81, 82, 83, 85, 87, 91, 96, 98, 100, 101, 102, 103, 105, 106, 116, 131, 139, 140, 142, 144, 145, 146, 147, 158, 170, 172, 174, 175, 181, 182, 184, 187, 188, 191, 194, 198, 200, 203, 209, 210, 211, 220, 221, 222, 227, 229, 233, 265, 282, 285, 286, 288, 291 East African Court of Justice (EACJ) 80, 283 East African Currency Board 15 East African Law Association 79 East African Legislative Assembly (EALA) 79, 80, 81, 283 Ebola 214, 215, 216, 217, 231, 293, 296 Ecobank Transnational Incorporated (ETI) 247, 248 Economic Commission for Africa, United Nations (UNECA) 15, 18, 45, 49, 66, 95, 103, 106, 128, 135, 205, 208, 209, 213, 221, 128, 208, 209, 221, 230, 273, 274, 280, 282, 283, 285, 286, 287, 288, 293 Economic Community of Central African States (ECCAS) 16, 64, 66, 68, 140, 207, 208, 221, 222, 282, 292 Economic Community of West African States (ECOWAS) 11, 16, 43, 54, 64, 66, 67, 68, 69, 70, 71, 72, 73, 74, 77, 85, 87, 88, 107, 116, 140, 174, 175, 203, 207, 208, 210, 216, 221, 227, 229, 233, 234, 248, 279, 280, 281, 283, 285, 292 Economic Partnership Agreement(s) (EPA) 134, 139, 140, 141, 142, 143, 144, 145, 146, 147, 287, 288 economies of scale 12, 13, 16, 35, 48, 116, 152, 191, 225 education 13, 34, 43, 51, 57, 64, 78, 81, 107, 113, 114, 126, 129, 130, 156, 164, 165, 206, 241, 242, 243, 249, 260, 261, 262, 263, 269, 270, 304 Egypt 14, 30, 34, 68, 81, 91, 92, 93, 96, 97, 100, 104, 107, 108, 109, 148, 153, 154, 157, 172, 181, 184, 187, 191, 195, 197, 198, 200, 201, 208, 209, 219, 243, 252, 284, 291 Einstein, Albert 27 election(s)—fraud, voting 46, 58, 69, 72, 79, 106, 158, 200, 253 electronic cargo tracking 131 Electronic Market Exchange System 122 electronics 13, 56, 166, 243 elite 46 email 179, 194, 213, 250 emancipation, see slavery 10, 11, 42,


46, 47, 266 emerging technologies 35, 219, 237, 238, 250, 251, 252, 254 endangered species 38 energy 16, 27, 32, 41, 46, 50, 54, 56, 57, 67, 68, 77, 84, 89, 90, 93, 96, 109, 110, 113, 123, 138, 149, 152, 153, 156, 161, 165, 206, 228, 238, 239, 242, 246, 255, 268 engineering—education 12, 13, 15, 20, 25, 34, 42, 62, 85, 133, 152, 153, 163, 166, 170, 171, 186, 218, 238, 239, 240, 242, 243, 244, 253, 254, 270, 299, 300 entrepreneur(s)(ship) 20, 33, 34, 88, 106, 156, 157, 159, 239, 242, 243, 269 environment, the 19, 25, 27, 33, 50, 51, 56, 57, 64, 70, 71, 78, 81, 90, 116, 117, 127, 149, 156, 234, 242, 251, 267, 268 equilibrium—disequilibrium, nonequilibrium 6, 10, 17, 24, 25, 26, 27, 28, 29, 33, 35, 36, 39, 41, 42, 50, 69, 134, 266, 272 Eritrea 91, 92, 93, 113, 181, 191, 284, 291 ethics 268 Ethiopia 30, 83, 91, 92, 93, 94, 113, 122, 127, 128, 154, 165, 181, 191, 221, 243, 252, 284, 291, 293 ethnic—divisions, interests, lines, groups 29, 31 European Union (EU) 7, 9, 10, 19, 32, 33,62, 92, 94, 104, 112, 118, 125, 134, 135, 136, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 156, 157, 160, 166, 174, 175, 200, 208, 223, 224, 257, 263, 273, 285, 288, 290 Everything-but-Arms scheme 139 evolution 10, 12, 14, 17, 25, 26, 30, 33, 35, 37, 40, 42, 43, 63, 65, 73, 84, 163, 219, 246, 271 exclusions 102, 181, 182, 193, 222, 223 experimental learning 6, 24, 26, 42, 204 experimentation 10, 11, 17, 18, 19, 20, 21, 25, 27, 33, 42, 58, 62, 63, 74, 83, 84, 85, 86, 115, 170, 171, 203, 218, 265, 266, 267 expertise 150, 161, 167, 201, 217, 231, 249, 258, 259, 261, 264 export(s)—non-traditional, processing zones 26, 29, 32, 56, 92, 94, 103, 115, 117, 119, 121, 125, 128, 135, 136, 137, 138, 139, 141, 143, 144, 147, 148, 150, 152, 153, 154, 155, 156, 157, 158, 159, 161, 162, 165, 182, 192, 195, 196, 197, 208, 219, 223, 224, 235, 236, 237, 238, 248, 256, 257, 261, 269 expropriation 113 extension services, agricultural 16 famine 199 Federation of International Freight Forwarders (FIATA) 5, 126, 127,

128, 129, 130, 287, 299, 304 Federation of Rhodesia and Nyasaland/ Central African Federation fiber optic 34, 77 Final Act of Lagos (FAL) 50, 51 finance 35, 45, 50, 54, 79, 90, 105, 135, 146, 149, 155, 156, 164, 180, 204, 209, 228, 237, 244, 245, 246, 248, 256, 258, 264 financial aid 217 financing 77, 112, 129, 138, 155, 160, 164, 185, 204, 232, 233, 244, 246, 247, 248, 255 finished products 99, 102, 133, 137, 245, 286 fishing 197 flexibility 19, 59, 86, 99, 100, 102, 105, 114, 125, 140, 142, 179, 194, 211, 222, 230, 256, 265, 271, 299 flowers 157 food safety 141, 192 food security 56, 94, 152, 217 footwear 154, 155, 157 foreign direct investment (FDI) 116, 135, 136, 137, 161, 166, 290 forest(ry) 56, 137, 268 Forum on China-Africa Cooperation (FOCAC) 136, 160, 289 France 43, 71, 138, 162 free movement—services, capital, human 38, 56, 62, 64, 67, 70, 74, 82, 84, 85, 88, 91, 111, 113, 121, 155, 209, 225, 253 free trade area (FTA) 6, 7, 11, 18, 19, 20, 29, 41, 47, 48, 52, 53, 54, 55, 56, 67, 68, 69, 70, 71, 81, 82, 87, 88, 89, 90, 91, 92, 95, 96, 98, 99, 101, 102, 103, 104, 108, 109, 110, 111, 113, 114, 115, 118, 119, 131, 133, 136, 139, 149, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 197, 198, 199, 201, 202, 203, 204, 208, 209, 210, 211, 213, 220, 221, 222, 223, 227, 228, 229, 230, 231, 234, 255, 285, 286 free trade arrangements 139 freight, see logistics 76, 126, 127, 129, 130 French Equatorial Africa (Afrique Équatoriale Française) 16 French Guinea 15 French Sudan 15 French West Africa (Afrique occidentale française) 15 funding 51, 104, 107, 113, 140, 177, 178, 207, 216, 217, 231, 232, 239, 241, 242, 247, 249, 262 Gabon 16, 159 Gadhafi, Muammar 68 Gambia 69, 70, 71 Garvey, Marcus 30 General Agreement on Trade in Services (GATS) 82, 174, 292 gender 20, 89, 205, 206, 262 General Agreement on Tariffs and Trade (GATT) 47, 53, 139, 151,

195, 196, 287, 292 genetic engineering 238 genetically modified crops 252 genocide 39 genomics 35 geographic information 252 geography 74, 128, 138, 269 geothermal energy 239 Ghana 9, 10, 11, 14, 30, 34, 46, 71, 125, 127, 138, 145, 165, 219, 243, 250, 252, 290 Giddens, A. 36, 277 giraffe 38, 268 global markets 126, 133, 142, 155 globalization 6, 9, 24, 32, 36, 45, 52, 103, 136, 193, 279 governance 10, 11, 21, 31, 37, 39, 44, 45, 46, 51, 58, 64, 65, 69, 71, 72, 81, 103, 121, 134, 138, 145, 146, 149, 156, 157, 162, 163, 214, 217, 219, 232, 249, 250, 252, 265, 268, 269, 270 grassroots organizations 212 Great Britain, see also United Kingdom 31 Guinea 15, 30, 46, 69, 70, 215, 301 Guinea Bissau 69, 70 Gulf States 47 handicraft 88, 245 health, see public health 13, 34, 36, 48, 49, 51, 56, 57, 89, 111, 112, 113, 120, 122, 133, 141, 149, 150, 157, 179, 180, 186, 192, 193, 206, 209, 213, 214, 215, 216, 217, 221, 227, 234, 242, 253, 255, 256, 258, 267 heritage, African 204, 268 Horn of Africa 64, 73 hospitality 213, 246 housing 113, 152 human resources 57, 105, 124, 261, 264, 269 human rights 58, 72, 138, 145, 204, 205, 268 hygiene, see public health 215 hyperinflation 246 identity 33, 204, 254, 270, 271 ideology 14, 15, 26, 267 implementation 10, 11, 18, 19, 20, 21, 24, 39, 46, 55, 57, 58, 63, 65, 69, 72, 83, 88, 89, 90, 92, 93, 94, 97, 99, 105, 106, 112, 113, 114, 120, 122, 123, 124, 128, 130, 131, 134, 146, 161, 164, 173, 174, 198, 199, 205, 212, 221, 232, 233, 234, 239, 244, 249, 252, 258, 262, 263, 268, 271 imports 48, 55, 56, 72, 82, 87, 91, 92, 107, 108, 112, 115, 119, 120, 124, 135, 137, 138, 139, 140, 141, 143, 144, 145, 147, 153, 154, 157, 159, 163, 182, 195, 198, 199, 201, 223, 224, 229, 230, 256 inclusive growth 20, 266, 268 India 7, 28, 29, 47, 62, 104, 125, 133, 134, 135, 136, 137, 143, 148, 149, 150, 151, 152, 153, 154, 155, 156, 160, 166, 167, 201, 205, 219, 253,

288, 293, 296 Indian Ocean 34, 88, 136, 150, 290 industrial development, see industrialization 12, 32, 37, 48, 56, 95, 134, 137, 154, 163, 165, 166, 170, 185, 204, 206, 208, 224, 238, 244, 246, 248, 249 industrial—development, learning, parks, power, processing 11, 12, 13, 32, 36, 37, 48, 56, 68, 70, 88, 95, 96, 99, 110, 111, 112, 134, 137, 154, 158, 159, 160, 163, 164, 165, 166, 170, 180, 185, 193, 204, 206, 208, 224, 225, 231, 236, 237, 238, 240, 244, 245, 246, 248, 249, 253, 274, 297 industrialization—strategy, clusterbased 7, 12, 13, 16, 18, 19, 32, 36, 48, 49, 51, 52, 56, 62, 63, 64, 67, 78, 79, 83, 84, 85, 94, 112, 113, 114, 116, 134, 147, 148, 158, 166, 185, 186, 206, 208, 212, 214, 218, 223, 225, 226, 229, 235, 236, 244, 245, 247, 249, 253, 255, 267 industries, infant 13, 19, 20, 29, 32, 34, 35, 36, 37, 48, 51, 54, 55, 56, 67, 94, 95, 99, 101, 104, 105, 108, 126, 137, 147, 153, 156, 172, 189, 195, 196, 197, 201, 219, 222, 223, 224, 225, 228, 237, 244, 245, 246, 254, 256 industry, domestic 34, 46, 50, 51, 54, 56, 62, 66, 81, 84, 89, 90, 95, 97, 116, 126, 127, 128, 129, 130, 132, 148, 149, 152, 166, 180, 199, 200, 202, 206, 222, 238, 241, 242, 249, 251, 256, 265, 287 inequality, economic 9, 45 information and communication technology (ICT), see also information technology 66, 77, 89, 96, 110, 128, 149, 150, 255 information gaps 155 information technology 152, 224 infrastructure—development, ecological, physical, institutional, rural 11, 12, 15, 16, 18, 32, 33, 34, 35, 37, 46, 48, 50, 52, 62, 63, 64, 67, 68, 74, 75, 76, 77, 78, 79, 83, 84, 85, 89, 94, 95, 96, 109, 110, 112, 113, 114, 117, 119, 123, 124, 126, 127, 130, 134, 140, 142, 143, 148, 149, 152, 153, 156, 162, 163, 164, 165, 166, 170, 186, 193, 199, 202, 203, 204, 205, 206, 208, 209, 212, 213, 214, 218, 219, 224, 225, 226, 228, 229, 234, 239, 240, 242, 243, 244, 245, 246, 249, 250, 253, 255, 256, 265, 267, 268, 269 innovation 14, 18, 19, 20, 25, 33, 34, 35, 37, 40, 42, 48, 51, 59, 62, 64, 82, 85, 89, 94, 96, 102, 113, 123, 128, 129, 134, 155, 170, 171, 185, 206, 208, 217, 219, 224, 229, 235, 236, 238, 239, 242, 244, 249, 250, 251, 252, 253, 254, 255, 262, 265, 266, 270, 271, 274, 301 institution-building 42, 78, 269

institutional—complexity, diversity, engineering, flexibility, learning, memory 3, 10, 11, 12, 16, 20, 25, 26, 28, 35, 42, 58, 59, 62, 63, 69, 73, 74, 77, 80, 81, 84, 85, 86, 105, 106, 115, 118, 122, 124, 125, 133, 139, 149, 157, 170, 171, 173, 174, 185, 186, 187, 188, 198, 201, 203, 212, 217, 228, 231, 235, 258, 260, 262, 264, 265, 266, 269, 270, 271 insurance—African Trade Insurance Agency, Re-insurance Company 88, 89, 93, 113, 121, 123, 128, 250 integrated circuits (IC) 13 integration—structural, social, economic, political, regional 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 24, 26, 27, 28, 29, 30, 33, 35, 36, 37, 38, 39, 40, 41, 42, 43, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 57, 58, 62, 63, 64, 66, 67, 68, 69, 70, 71, 72, 74, 75, 76, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 94, 95, 96, 97, 98, 99, 102, 103, 104, 105, 106, 107, 109, 110, 111, 112, 113, 114, 115, 116, 117, 119, 123, 126, 128, 131, 133, 137, 138, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 157, 160, 166, 167, 170, 173, 174, 185, 186, 188, 192, 193, 202, 203, 204, 205, 206, 208, 209, 210, 211, 212, 214, 219, 222, 224, 229, 231, 232, 234, 235, 244, 245, 247, 254, 255, 256, 258, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 280, 281, 285, 297 intellectual property 53, 89, 134, 149, 150, 157, 158, 175, 185, 208, 243, 255, 258, 291 inter-regional convergence 170 Inter-University Council of East Africa (IUCEA) 81 Intergovernmental Authority on Development (IGAD) 64, 66, 68, 221, 222 Intergovernmental Authority on Drought and Desertification (IGADD) 67 intermediate products 97, 99, 137 International Federation of Freight Forwarders Association (FIATA) 126 International Monetary Fund (IMF) 51, 210, 263, 281, 285, 294, 295 International Plant Protection Convention 122 International Trade Administration Commission (ITAC) 197 Internet 13, 219, 294 investigating authorities 198, 201, 292 investment—infrastructure, manufacturing 13, 16, 19, 46, 50, 51, 63, 64, 71, 74, 77, 79, 84, 85, 88, 89, 90, 105, 109, 110, 111, 113, 114, 116, 117, 118, 119, 126, 131, 135, 137, 142, 147, 149, 150, 151, 152, 153, 154, 156, 157, 159, 160,


161, 163, 165, 166, 172, 174, 191, 192, 206, 208, 226, 234, 237, 239, 246, 256, 264, 269, 271, 291, 296 irreversibility 6, 24, 27, 28, 33, 87 irrigation 238 Ivory Coast, see Côte d’Ivoire 15, 125, 287 Jammeh, Yahya 69, 70 Japan 134, 135, 136, 156, 163, 164, 253 job creation 117, 205, 206, 223, 247 joint ventures 154, 155, 224, 236 Kenya 15, 31, 34, 43, 66, 78, 79, 80, 81, 82, 83, 87, 91, 92, 93, 94, 101, 103, 119, 120, 123, 126, 127, 141, 144, 147, 153, 154, 157, 158, 172, 176, 181, 182, 184, 191, 198, 199, 200, 201, 205, 209, 219, 222, 239, 243, 247, 250, 251, 252, 263, 277, 278, 279, 280, 284, 286, 291 Kenya Association of Manufacturers 119 Kenyatta, Jomo 43, 78, 79 Kenyatta, Uhuru 79, 199 Kibaki, Mwai 79 Kinshasa Declaration 49 Korea Railroad Research Institute 241 labor, human 13, 29, 36, 43, 67, 82, 88, 91, 116, 157, 158, 165, 209, 232, 241, 258 Lagos Plan of Action 11, 46, 49, 52, 62, 77, 84, 95, 174, 261, 279, 281 Lake Victoria Basin Commission 81 land-use change 217 language 21, 81, 174, 183 Latin America 26, 29, 143, 276 law, rule of 46, 92, 106, 110, 157, 268 leadership 3, 29, 31, 58, 73, 85, 100, 118, 194, 232, 234, 251, 258 leapfrog 34, 250 learning—economy, industrial 6, 10, 11, 12, 13, 17, 18, 19, 20, 21, 24, 25, 26, 39, 42, 59, 62, 72, 84, 85, 86, 106, 114, 115, 118, 128, 129, 134, 155, 165, 170, 171, 172, 204, 210, 218, 237, 241, 242, 244, 250, 251, 260, 263, 265, 266, 270 leather 56, 152, 153, 224 Lesotho 73, 74, 75, 144, 181, 197, 291 lessons 10, 17, 20, 21, 24, 33, 39, 40, 42, 59, 62, 72, 83, 84, 86, 88, 102, 113, 128, 129, 145, 147, 148, 161, 163, 165, 166, 167, 170, 204, 210, 213, 216, 217, 218, 224, 231, 232, 236, 251, 254, 255, 266, 267, 268 liberalization—market, trade 9, 18, 53, 54, 55, 56, 67, 68, 69, 87, 89, 90, 91, 92, 93, 96, 104, 121, 142, 143, 145, 149, 150, 155, 156, 176, 177, 180, 181, 182, 186, 187, 189, 190, 191, 192, 193, 196, 199, 201, 205, 206, 207, 210, 220, 221, 222, 228, 231, 256, 288 Liberia 30, 46, 69, 70, 215 Libya 30, 68, 91, 153, 154, 157, 209, 284, 291 loans 34 logistics 6, 66, 115, 116, 118, 125,


126, 127, 128, 129, 130, 132, 179, 212, 287, 304 Lomé Convention 32, 138, 141, 248, 279, 280, 287, 288 Lumumba, Patrice 30 Luxembourg 138 M-Pesa 34, 123 machine learning 250, 251, 270 macroeconomic convergence 119, 156 Madagascar 73, 74, 91, 92, 93, 94, 104, 144, 153, 154, 158, 191, 209, 252, 284, 291 maintenance 71, 81, 147, 239, 240, 242, 243, 251 Malawi 15, 74, 75, 76, 91, 93, 94, 97, 106, 153, 154, 191, 198, 209, 247, 284, 291 Mali 15, 30, 210, 215, 220, 228 Mamdani, Mahmood 31, 276 Mandela, Nelson 49, 271 Mano River Union 216 manpower, see also labor 127, 261, 264 market(ing)—access, failure, integration, liberalization, share 9, 16, 18, 19, 24, 35, 37, 38, 46, 48, 52, 53, 56, 57, 62, 64, 67, 68, 76, 77, 78, 82, 85, 87, 88, 90, 91, 92, 94, 95, 96, 103, 104, 106, 109, 110, 111, 112, 115, 116, 119, 120, 121, 122, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 150, 152, 155, 156, 157, 158, 159, 162, 163, 164, 165, 170, 172, 174, 186, 188, 191, 192, 193, 194, 196, 200, 202, 204, 205, 206, 207, 208, 209, 210, 211, 221, 222, 224, 225, 228, 238, 242, 245, 248, 250, 256, 257, 264, 265, 269, 292 markets—goods, services 11, 12, 13, 15, 16, 19, 29, 32, 33, 35, 36, 38, 46, 47, 48, 49, 52, 53, 63, 71, 74, 84, 85, 92, 95, 104, 109, 110, 115, 116, 117, 119, 124, 125, 126, 131, 133, 135, 136, 137, 141, 142, 144, 148, 150, 155, 157, 158, 162, 172, 181, 186, 191, 195, 196, 197, 206, 208, 212, 223, 224, 234, 236, 241, 245, 246, 247, 256, 257, 267, 274 Master of Regional Integration (MRI) 262 Mauritania 15 Mauritius 74, 91, 92, 93, 96, 97, 104, 107, 108, 109, 119, 144, 153, 154, 158, 181, 191, 197, 198, 209, 253, 284, 286, 291 McCloskey, Deirdre 14, 273 media 107, 135, 149, 200, 212, 213, 250, 259, 262, 293 medicine 134, 253 mentoring 155, 229 mergers and acquisitions 154 metallurgical 56 metals 153 meteorology 77 MFN—Most Favored Nation 91, 92, 97, 151, 184, 190, 221, 223 microfinance 155

migration 34, 38, 243 military 31, 69, 70, 71, 72, 74, 75, 215, 217, 244, 250 mineral resources 112, 154 mining 30, 32, 137, 150, 161, 250 mobile phones, see also money transfer, mobile 13, 34, 76, 120, 123, 250, 251 modernization, agricultural 62, 94, 103, 114, 117, 124 Moi, Daniel Arap 79 Mokyr, Joel 14, 273, 295 monetary—harmonization, union 43, 53, 56, 57, 64, 66, 70, 78, 90, 91, 95, 96, 103, 110, 112, 144, 202, 206, 265, 282 money transfer, mobile, see also M-Pesa 34, 250 monitoring and evaluation 104, 129, 138, 211 Monrovia Declaration 49, 50 Monrovia Group 30 Morocco 9, 30, 68, 127, 128, 247, 248, 253, 286 movement of business persons 173, 174, 175, 185, 206 movement of persons, see also visas 56, 64, 67, 68, 74, 79, 91, 111, 225 Mozambique 74, 75, 76, 126, 198, 247, 253, 291 Muchanga, Albert 226 Mugabe, Robert 184 multiculturalism 38 Museveni, Yoweri 78, 158 music 38 Namibia 11, 74, 76, 144, 160, 181, 197, 198, 209, 289, 291 nanotechnology 150 nationalism, economic 9, 160 natural resource(s) 12, 45, 50, 51, 57, 112, 134, 153, 162, 163, 164, 166, 206, 218, 224, 236, 237, 252, 271 negotiation(s)—capacity-building, tactics, trade 7, 11, 135, 147, 151, 167, 172, 174, 179, 180, 181, 182, 183, 190, 191, 193, 194, 210, 211, 212, 213, 214, 220, 221, 226, 227, 255, 256, 260, 264, 291 negotiations 7, 11, 12, 15, 16, 17, 18, 29, 36, 37, 56, 58, 62, 65, 68, 69, 82, 89, 105, 124, 131, 133, 134, 136, 138, 139, 141, 142, 143, 144, 146, 147, 148, 149, 150, 151, 171, 172, 173, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 191, 193, 194, 195, 196, 203, 204, 208, 209, 210, 211, 212, 213, 214, 220, 221, 222, 224, 226, 227, 228, 229, 230, 231, 234, 249, 255, 256, 257, 258, 259, 260, 261, 262, 264, 267, 291, 293 Netherlands 138, 285 networks 32, 74, 75, 76, 150, 156, 217, 243, 250, 260, 264 New International Order 49 New Partnership for Africa’s Development (NEPAD) 113, 145, 232

Newton, Isaac 25 Niger 15, 71, 160, 220, 235, 289 Nigeria 30, 31, 34, 71, 125, 126, 157, 159, 164, 165, 215, 216, 217, 219, 239, 243, 247, 251, 253, 283, 290 Nkrumah, Kwame 9, 14, 30, 43, 44, 71, 271, 279, 280 nontariff barrier (NTB), see tariff 92, 286 nontariff measures (NTMs), see also NTBs 146, 192, 193 North American Free Trade Agreement (NAFTA) 155, 175 Northern Corridor Integration Projects (NCIP) 83 Norway 138, 288, 293 novelty 27, 28, 35 nuts 152, 153 Nyasaland 15 Nye, Joseph 3, 14, 15, 273 Nyerere, Julius 44, 78, 279 Obama administration Obasanjo Report 107 Obasanjo, Olusegun 107, 164 Obote, Milton 78 oil 13, 97, 100, 120, 125, 126, 136, 152, 153, 154, 157, 158, 159, 164, 251 one-stop-border-post (OSBP) 116, 130, 287 Organisation of African Unity (OAU) 14, 30, 43, 44, 45, 49, 50, 52, 53, 54, 57, 84, 85, 98, 138, 170, 187, 233, 270, 271, 278, 279, 280, 281 overseas development assistance, see also development assistance 138 Padmore, George 43 pan-African—congress, Parliament (PAP), University, vision 9, 10, 18, 20, 42, 44, 57, 58, 105, 160, 216 pandemic 215, 216 paperless 270 parliament 57, 58, 78, 79, 80, 106 passport 68, 74, 233 pathway, see also roadmap 171 patronage 104 peace—peaceful coexistence 11, 45, 64, 69, 70, 71, 72, 73, 74, 85, 89, 90, 96, 109, 110, 112, 138, 149, 150, 156, 225, 231, 232, 267, 268 peacekeeping 69, 71, 73, 74, 203, 215 performance requirements 113 petrochemical 56, 166 petrochemical engineering 166 pharmaceuticals 148, 149, 165, 166 philanthropists 113 phones, see mobile phone 13, 34, 76, 120, 123, 250, 251 physics 25, 27 piracy 150 plantation 32 plastic 152, 165 platform technologies 113, 134, 238 police 251 policy—public, reversals 19, 20, 26, 48, 50, 51, 52, 56, 59, 64, 67, 77, 80, 88, 93, 95, 96, 97, 99, 100, 101, 102, 104, 105, 106, 107, 109, 110,

111, 112, 113, 116, 117, 118, 124, 125, 126, 128, 130, 131, 132, 135, 136, 137, 138, 139, 142, 147, 149, 150, 154, 155, 157, 158, 161, 162, 165, 174, 175, 176, 178, 179, 181, 183, 188, 189, 192, 193, 196, 197, 205, 208, 209, 211, 212, 214, 218, 219, 235, 236, 237, 239, 241, 242, 251, 252, 256, 258, 259, 260, 262, 263, 264 polio 217 Polytol Paints v The Government of Mauritius 107 population 9, 14, 15, 57, 74, 83, 89, 110, 117, 128, 152, 204, 206, 209, 210, 215, 216, 223, 235, 236, 242, 268 populism 36, 254 ports 76, 79, 125, 126, 152 Postal Union 15 poverty 33, 52, 89, 106, 125, 142, 154, 157, 171, 263 power—transmission, generation 14, 20, 31, 39, 44, 64, 69, 71, 76, 77, 83, 102, 163, 167, 179, 180, 214, 215, 216, 217, 240, 245, 247, 250, 265, 292 Prebisch, Raúl 29, 48, 276, 280 preferential access 29, 139, 140, 159 Preferential Trade Area (PTA) 11, 89, 116, 246 Preferential Trade Area for Eastern and Southern Africa 116 Prigogine, Ilya 3, 25, 26, 27, 28, 33, 39, 40, 42, 274, 275, 276, 277 primary products 10, 48, 51 private sector 33, 52, 64, 105, 106, 112, 113, 114, 118, 123, 126, 128, 129, 130, 133, 154, 155, 175, 176, 177, 185, 190, 191, 194, 196, 199, 200, 209, 212, 216, 230, 239, 241, 242, 248, 250, 255, 261, 262, 264, 267, 271 private-public partnerships 239, 255 processing, industrial 12, 121, 139, 165, 185, 224, 229, 236, 250 procurement 134, 143, 147, 149, 150, 157, 239, 240, 243 prohibited goods trade 181 property rights 46, 157, 208 protection—market, protectionism 19, 20, 31, 37, 38, 51, 71, 101, 104, 108, 117, 120, 129, 137, 156, 157, 158, 181, 182, 189, 192, 195, 216, 222, 223, 234 Protocol(s)—Trade in Services, Trade in Goods, Dispute Settlement, free movement of persons 84, 121, 187, 188, 220, 225, 228, 231 Protocol on Rules of Origin 121 Protocol on Third Party Motor Insurance Scheme 121 Protocol on Transit Trade and Transit Facilities 121 public health 120, 133, 141, 215 pulses 152 quality assurance 121 quotas 125, 136, 195, 233

rail—corridor, freight, high-speed 76, 130, 156, 241 raw material(s) 13, 15, 20, 26, 29, 32, 97, 99, 115, 133, 135, 136, 137, 139, 153, 162, 165, 166, 190, 235, 236, 237, 238, 245, 269, 274 Reciprocal Trade Agreements Program of the Trade Act 196 reciprocity 18, 91, 136, 151, 181, 184, 186, 187, 191, 194, 210, 221, 228 recolonization 134 reform—tax, banking, energy, internet and telephony 57, 135, 150, 234, 249, 250 refugees 51, 72 Region Africa Middle East (RAME) 5, 126, 128 Regional African Satellite Communications Organization (RASCOM) 219 Regional Association of Energy Regulators for Eastern and Southern Africa 93 regional economic communities (RECs) 6, 7, 11, 39, 40, 50, 52, 53, 54, 55, 56, 57, 59, 63, 64, 65, 66, 67, 68, 69, 73, 77, 79, 80, 81, 83, 84, 85, 87, 95, 96, 101, 102, 103, 110, 115, 117, 125, 131, 136, 140, 144, 147, 156, 160, 172, 173, 175, 176, 177, 178, 179, 182, 184, 186, 188, 189, 191, 192, 193, 194, 201, 202, 203, 206, 207, 208, 210, 211, 221, 222, 227, 228, 230, 232, 233, 234, 248, 257, 261, 264, 265, 267, 280, 281, 283 Regional Infrastructure Development Master Plan (RIDMP) 77, 283 regional—integration (see integration), preferences 5, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 24, 26, 28, 29, 30, 33, 35, 36, 37, 38, 39, 40, 41, 42, 45, 46, 49, 50, 52, 53, 54, 55, 59, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 83, 84, 85, 86, 87, 88, 89, 90, 91, 93, 94, 95, 96, 97, 98, 99, 101, 102, 104, 105, 106, 107, 109, 110, 111, 112, 113, 114, 115, 116, 117, 119, 121, 122, 123, 124, 126, 128, 129, 131, 133, 135, 136, 137, 138, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 154, 155, 156, 157, 158, 163, 165, 166, 167, 170, 171, 173, 175, 184, 185, 187, 188, 189, 190, 192, 193, 194, 196, 198, 202, 203, 204, 205, 206, 207, 210, 211, 212, 214, 215, 216, 217, 218, 219, 222, 223, 224, 225, 227, 231, 232, 233, 234, 235, 244, 245, 246, 247, 248, 252, 253, 254, 255, 256, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 281, 285 regulatory framework 206, 256 Republic of the Congo 16, 92, 118, 181, 191, 217, 269, 284, 286 research and development (R&D) 50,


249, 250 research institutes 212, 239, 241, 244 resistance to technology 37 resource-for-infrastructure swaps 164 Rhodesia—Southern, Northern 15, 280 right to development—UN Declaration 7, 203, 204, 205, 234 rights, human 2, 45, 46, 56, 58, 71, 72, 81, 82, 108, 113, 138, 145, 157, 158, 188, 204, 205, 207, 208, 248, 255, 268, 280 road(s) 68, 74, 75, 76, 82, 83, 96, 128, 130, 136, 152, 200 roadmap 6, 10, 11, 17, 18, 24, 41, 42, 52, 58, 62, 63, 99, 170, 171, 173, 175, 176, 177, 178, 179, 181, 183, 212 robots 250, 251, 254 role model 29, 163 rubber 152 Ruhl, J.B. 65, 282 rule of law 46, 92, 106, 110, 157, 268 rule(s)—agreed-list, general, of law, of origin, product-specific, REC 15, 18, 30, 31, 33, 42, 43, 46, 48, 55, 66, 70, 88, 82, 106, 108, 109, 110, 111, 116, 119, 120, 121, 125, 126, 131, 135, 136, 139, 141, 142, 143, 149, 150, 151, 157, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 186, 187, 189, 192, 193, 194, 195, 196, 197, 204, 207, 210, 211, 212, 213, 214, 225, 226, 229, 230, 234, 240, 251, 255, 256, 257, 258, 267, 268, 291 Rwanda 39, 78, 82, 83, 91, 92, 93, 94, 98, 101, 103, 113, 123, 147, 154, 181, 191, 209, 210, 220, 222, 225, 231, 243, 251, 278, 284, 285, 286, 291 Saasa, Oliver 12, 273 Safaricom 34, 123, 241 safeguard measures 19, 99, 101, 107, 108, 151, 182, 196, 198, 199 sanctions 32, 45, 97, 100, 233 Saniquelli Meeting in Guinea and Liberia 46 sanitary and phytosanitary (SPS) measures 120, 122, 136, 175, 177, 204, 225, 291 satellite(s) 34, 217, 218, 219, 252 scale—effects, geometric, scaling 11, 12, 13, 16, 19, 30, 35, 38, 40, 48, 56, 72, 88, 92, 112, 116, 117, 118, 121, 123, 137, 152, 160, 164, 191, 200, 215, 216, 224, 225, 255, 269 SCAW South Africa 197 Schumpeter, Joseph 244, 274, 277, 293, 294 science—advice, diplomacy, and technology 20, 27, 32, 33, 50, 63, 84, 89, 94, 96, 113, 138, 149, 218, 219, 241, 249, 250, 252, 253, 262, 269, 270 Science, Technology and Innovation Strategy for Africa (STISA-2024) 236, 252


science, technology and innovation (STI) 113 scramble for Africa 25 second-hand clothes 158 secretariats 19, 59, 67, 73, 98, 144, 173, 174, 175, 176, 177, 178, 179, 184, 207, 211, 212, 233, 234, 257, 261, 264, 291 security 11, 16, 49, 56, 64, 70, 71, 72, 73, 74, 76, 78, 85, 89, 90, 94, 96, 110, 112, 117, 118, 119, 129, 138, 139, 149, 150, 152, 156, 181, 182, 189, 190, 191, 216, 217, 222, 231, 232, 250, 251, 252, 267, 268 seed 238, 248 self-sufficiency 50, 51, 160 semiconductor 237 Senegal 15, 30, 69, 70, 215, 253 sensitive and excluded products 87, 100, 210, 220, 222, 229 services—communication, transport, finance, tourism; professional, construction, energy 16, 34, 35, 41, 45, 51, 53, 62, 67, 68, 70, 77, 82, 85, 88, 89, 91, 96, 110, 111, 115, 117, 121, 126, 127, 135, 136, 137, 143, 147, 149, 150, 151, 154, 155, 156, 174, 175, 176, 191, 209, 216, 218, 219, 220, 224, 225, 228, 233, 234, 238, 242, 246, 249, 250, 253, 268, 291 Seychelles 74, 91, 93, 94, 96, 97, 104, 144, 181, 191, 209, 223, 284, 291 shipping, see logistics 125 Sierra Leone 69, 70, 215 Singapore 118, 125, 127 Single Administrative Document (SAD) 121 Sirte Declaration 53 skills transfer 134, 156 slavery 138 small and medium enterprise (SME) 112, 113, 155 socioeconomic transformation 56, 148, 203, 212, 213, 232 solar 238, 251 Solow, Robert 29, 276 Somalia 73, 89, 221 sourcing, local 162, 182, 230 South Africa 32, 43, 49, 54, 67, 74, 75, 76, 128, 145, 157, 158, 173, 178, 179, 181, 182, 184, 191, 194, 195, 197, 198, 201, 205, 209, 210, 218, 219, 235, 243, 247, 253, 280, 281, 283, 285, 290, 291, 293 South Korea 47, 135, 241, 242, 253 South Sudan 78, 81, 83, 97, 100, 243, 291 south-south trade 9, 37, 43, 44, 45, 49, 85, 98, 99, 101, 130, 142,143, 161, 265 Southern African Customs Union 75, 91, 181 Southern African Development Community (SADC) 11, 14, 33, 64, 66, 68, 76, 283 Southern African Development Coordination Conference (SADCC)

54, 75 space—technology, policy 19, 34, 35, 58, 59, 83, 86, 99, 100, 102, 105, 110, 111, 113, 132, 135, 136, 138, 142, 147, 150, 162, 181, 189, 193, 202, 209, 217, 218, 219, 234, 248, 256 spare parts 238, 240 special economic zones (SEZs) 165 spices 152, 153 sports 149 Square Kilometre Array (SKA) 219 stability 35, 51, 53, 70, 71, 90, 96, 109, 110, 112, 118, 119, 136, 156, 257 stagnation 50 standard of living 90 standards 16, 35, 41, 48, 56, 81, 85, 89, 90, 110, 111, 112, 116, 120, 121, 122, 126, 133, 136, 141, 149, 151, 157, 172, 175, 179, 180, 186, 192, 209, 210, 212, 214, 221, 225, 227, 231, 234, 248, 255, 256, 291 Stellenbosch University 218 Stellenbosch University Satellite (SUNSAT) 218 structural adjustment programs (SAPs) 32, 51, 192 submarine cable 77 subsidiarity 86, 103, 204 subsidy(ies) 137, 147, 195, 196, 197, 198 Sudan 15, 30, 78, 81, 83, 91, 92, 93, 94, 97, 100, 153, 154, 181, 209, 235, 243, 253, 284, 291 suffrage 57 sugar 152, 153, 182, 198, 199, 200, 201, 222 supply chain 128 sustainable development 20, 81, 146, 206, 234, 266, 268 Swaziland 74, 75, 91, 93, 94, 106, 113, 144, 154, 158, 175, 181, 191, 198, 209, 284, 291, 295 Sweden 138 systems approach 36, 37, 40, 270 Taiwan 237, 238, 293 Tanzania 15, 44, 67, 74, 75, 78, 79, 81, 82, 83, 87, 93, 127, 128, 147, 181, 191, 209, 253, 279, 283, 291 tariff—hopping, liberalization, nontariff 37, 47, 54, 55, 56, 67, 87, 88, 90, 91, 93, 96, 97, 98, 99, 100, 101, 102, 103, 111, 125, 136, 137, 142, 143, 144, 145, 152, 155, 162, 174, 176, 177, 180, 181, 182, 183, 184, 186, 187, 189, 190, 191, 192, 193, 194, 197, 201, 204, 205, 209, 212, 213, 214, 220, 221, 222, 224, 225, 227, 228, 229, 230, 231, 236, 255, 288, 291 tax—exemption instrument, value added tax (VAT), excise, collection 98, 143, 156, 157, 159, 192, 236 technical change 29 technology—transfer 32, 33, 34, 37, 50, 51, 56, 84, 89, 94, 96, 110, 113, 149, 150, 151, 152, 155, 158, 163,

164, 165, 166, 192, 206, 217, 218, 219, 224, 229, 236, 237, 238, 239, 241, 242, 243, 245, 246, 248, 249, 250, 251, 253, 254, 255, 262, 269, 270, 292, 294 telecommunication (telecoms) 13, 34, 46, 163, 241, 243 terms of trade 26, 29, 32, 48 Teubner, G. 65, 282 textile(s) 56, 126, 152, 154, 155, 158, 166, 224, 245, 256 think-tank(s) 257 Togo 71, 247, 248 Tokyo International Conference for Africa’s Development (TICAD) 136 tourism 57, 68, 77, 149, 152, 156, 223, 228 trade—agreement(s), balance of, barriers, deficit, diversion, expansion, facilitation, free, goods and services, intra-African, liberalization, policy, relations, remedies, terms of 6, 7, 9, 10, 11, 12, 15, 16, 17, 18, 19, 20, 26, 29, 32, 36, 37, 38, 41, 46, 47, 48, 49, 50, 52, 53, 54, 55, 56, 58, 62, 64, 67, 68, 69, 70, 71, 74, 79, 81, 82, 83, 84, 85, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 101, 102, 103, 104, 105, 106, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 128, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 164, 165, 166, 172, 173, 174, 175, 179, 180, 181, 182, 183, 184, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 201, 202, 203, 204, 205, 206, 207, 208, 209, 211, 212, 216, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 234, 244, 246, 247, 248, 249, 253, 254, 255, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 267, 268, 269, 281, 285, 286, 288, 291, 292 Trade and Development Bank (TBD) 93, 113, 246 Trade Facilitation Agreement 93, 115, 116, 120, 123, 124, 131, 285, 287 training institutes 243 transparency 46, 119, 120, 124, 136, 143, 151 transportation, see also logistics 13, 16, 46, 64, 67, 112, 125, 127, 161, 165, 166, 206, 240, 241, 243, 245, 250, 255 treaty(ies)—obligations 10, 11, 32, 48, 50, 52, 53, 54, 55, 57, 58, 59, 89, 91, 95, 103, 104, 105, 106, 107, 108, 109, 110, 113, 121, 122, 138, 144, 173, 187, 189, 207, 208, 219, 246, 248, 267, 270, 281, 292 tribunal 92, 207, 208

Trinidad 42, 43 Tripartite Free Trade Area (Tripartite FTA) 11, 14, 18, 59, 69, 77, 91, 95, 101, 131, 170, 171, 172, 173, 175, 176, 177, 179, 180, 181, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 194, 197, 201, 202, 203, 204, 208, 209, 210, 211, 213, 220, 221, 222, 227, 228, 230, 231, 234, 255, 265, 282, 285, 286, 291 Tripartite FTA Agreement 175, 180, 185, 187, 208, 210, 220, 221 Tripartite Task Force 175, 176, 179, 197, 291 Tripartite Trade Negotiation Forum (TTNF) 179 Tripartite Summit, Second 173, 175, 178, 179, 181, 183, 190 Trump—Donald, administration 9, 159 trust 85, 130 tuna 223 Tunisia 66, 68, 89, 221, 290 Turkey 47, 104, 135, 253 twinning programs 155 Uganda 15, 73, 78, 81, 82, 83, 87, 91, 92, 93, 94, 101, 103, 141, 147, 154, 158, 181, 191, 198, 200, 209, 217, 253, 279, 284, 291 Uganda Railway 15 uncertainty principle 25 unemployment 9, 45, 171, 254 unfair trade practices 195, 197 unification 14, 15, 27, 31, 40, 43, 57, 71, 267 United Kingdom (UK), see also Great Britain 9, 138, 215 United Nations Conference on Trade and Development (UNCTAD) 29, 95, 127, 285, 286, 288, 292 United Nations Development Programme (UNDP) 95, 205, 208, 213, 216, 292, 293 United Nations Economic Commission for Africa (ECA) 45, 49, 50, 54, 140, 208, 213, 273, 274, 280, 285, 287, 288, 293 United States of Africa 30, 267 university(ies)—technical, virtual 34, 81, 127, 135, 147, 165, 212, 239, 240, 241, 242, 243, 244, 261, 262, 263, 269, 270, 271, 295 University of Lagos 217 Upper Volta 15 uranium 160 urbanization 236 utopia 30, 33, 41 uti possidetis, doctrine of 44, 98 value addition 74, 112, 120, 154, 183, 224, 236, 238 value chains 32, 148, 154, 158, 167, 192, 223, 224, 225, 254 variable geometry—principle of 82, 86, 88, 90, 113, 142, 151, 210, 211, 214, 228 VAT 98, 114 venture capital 241 Vienna Convention on the Law of

Treaties 109, 124, 187 Virtual Trade Facilitation System 122 virtual—voting systems, university 122, 262, 263, 270 vision 10, 11, 14, 17, 18, 20, 24, 26, 28, 29, 30, 40, 41, 42, 58, 59, 62, 65, 84, 85, 90, 109, 114, 115, 127, 140, 149, 150, 160, 166, 170, 171, 176, 177, 190, 203, 211, 212, 255, 265, 266, 267, 268, 271 Vision 2027 77 Vodafone 34 waiting time, see delay 130 Washington Consensus 51 water resources 77, 138 wealth creation 110, 117, 125, 196, 225 weapons 72 weigh bridge(s) 83, 131 welfare 13, 42, 47, 49, 95, 96, 97, 105, 122, 140, 147, 156, 191, 193, 197, 205, 212, 256 West African Chambers of Commerce and Industry (FWACCI) 248 West African Economic and Monetary Union (UEMOA) 16, 64, 66 wildebeest 268 wildlife 38 Williams, Sylvester 42 women-led organizations 19 workers—treatment of, rights 156, 157, 215, 216, 217, 245, 254 World Bank 51, 52, 95, 119, 125, 128, 148, 210, 240, 263, 280, 281, 283, 286, 287, 293, 294 World Customs Organization 102, 116, 122, 123 World Customs Organizations’ Harmonized Commodity Description and Coding System (HS) 122, 229 World Trade Organization (WTO) 18, 19, 32, 47, 53, 93, 97, 100, 115, 116, 120, 123, 124, 131, 134, 135, 139, 141, 142, 143, 149, 150, 151, 162, 174, 184, 187, 188, 192, 195, 196, 197, 198, 201, 210, 226, 228, 229, 257, 258, 260, 261, 264, 279, 285, 287, 288, 291 Yamoussoukro Decision 94, 128 Yaoundé Convention 138 Yar’Ardua, Umaru Musa 164 Yew, Lee Kwan 118 youth 20, 27, 34, 39, 109, 110, 123, 128, 129, 210, 233, 236, 254, 268 Zambia 1, 15, 74, 75, 76, 83, 91, 92, 93, 94, 97, 118, 120, 130, 154, 165, 179, 191, 198, 209, 241, 247, 284, 291, 294 Zamnet 241 Zimbabwe 15, 67, 74, 75, 76, 91, 92, 93, 94, 96, 97, 100, 104, 127, 130, 144, 154, 184, 191, 197, 198, 209, 246, 247, 253, 280, 284, 290, 291 Zuma, Jacob 210


The FIATA Foundation—Vocational Training (FFVT) was founded in 2001 by the FIATA Presidency with the objective of promoting forwarding and logistics vocational training in developing countries and improving the professional qualifications worldwide. This objective is achieved through “Train-the-Trainer” (TOT) courses and relevant projects in countries where FIATA Association Members have an important demand in professional and further education but are often are confronted with a lack of necessary resources. The foundation encourages FIATA association members to set up their respective sustainable training programmes. The FFVT is an independent body operating under direct supervision of the Swiss federal government The FFVT thanks the authors of this book for their comprehensive guideline & insight. The FFVT believes this book will be invaluable to our members in Africa & elsewhere.


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Emergent Africa  

Africa made world history on 21 March 2018 when it adopted the Agreement establishing its Continental Free Trade Area. This followed closely...

Emergent Africa  

Africa made world history on 21 March 2018 when it adopted the Agreement establishing its Continental Free Trade Area. This followed closely...