I.A.M - Magazine - Page 31
LEADERS CORNER
What would
you say are the most significant institutional favorable environment for trade and economic
7HATÒWOULDÒYOUÒSAYÒAREÒTHEÒMOSTÒSIGNIµCANTÒINSTITUTIONALÒ
integration.
challenges facing African regional integration?
Addressing
these challenges requires a combination of
I think that the domestication of continental level policies
within individual
African countries presents a significant political commitment, institutional strengthening,
WITHINÒINDIVIDUALÒ!FRICANÒCOUNTRIESÒPRESENTSÒAÒSIGNIµCANTÒ
institutional challenge to regional integration. While governance reforms, and enhanced coordination
regional integrations
aim to reflect the diverse cultural, between
REGIONALÒINTEGRATIONSÒAIMÒTOÒRE¹ECTÒTHEÒDIVERSEÒCULTURAL
Ò regional bodies and national governments.
economic, and social realities of each nation, practical
issues such
as insufficient funding hinder their practical In the era of the AfCFTA, how can African countries ensure
ISSUESÒSUCHÒASÒINSUFµCIENTÒFUNDINGÒHINDERÒTHEIRÒPRACTICALÒ
integration benefits all member states,
THATÒECONOMICÒINTEGRATIONÒBENEµTSÒALLÒMEMBERÒSTATES
reform which is required in respective countries. The that economic
smaller and less-developed economies?
lack of a LACKÒ
unified
ideology
across African
OFÒ AÒ
UNIµEDÒ IDEOLOGYÒ
ACROSSÒnations
!FRICANÒoften
NATIONSÒincluding
OFTENÒ
leads to overlapping and competing interests, Promoting comparative advantage is essential to
advancing the AfCFTA. If a country is known for a
influenced
by historical
divides and
external
bilateral BILATERALÒ
IN¹UENCEDÒ
BYÒ HISTORICALÒ
DIVIDESÒ
ANDÒ EXTERNALÒ
specific commodity,
product,ÒPRODUCT
or service,
efforts should
SPECIµCÒCOMMODITY
ÒORÒSERVICE
ÒEFFORTSÒSHOULDÒ
relations.
I also believe that the overlapping memberships of focus on branding and scaling its economic strengths to
African countries in multiple regional economic increase production capacity and gain wider market
communities (RECs) complicate their commitment to access provided by the ACFTA. This would particularly
smaller, SMALLER
agriculture-based
economies,
Ò AGRICULTURE BASEDÒ
ECONOMIES Ò
regional integration.
The low financial commitment from benefit BENEµTÒ
REGIONALÒINTEGRATIONÒ4HEÒLOWÒµNANCIALÒCOMMITMENTÒFROMÒ
national NATIONALÒ
budgets BUDGETSÒ
to prioritize
specific SPECIµCÒ
ENCOURAGINGÒ
TOÒ PRIORITIZEÒ
African governments further restricts the progress of encouraging
integration efforts, rendering integration efforts to be commodities through agricultural industrialization, value
and introduce agrarian laws that enhance
dominated
by foreign
finance. µNANCEÒ
Addressing
these addition,
DOMINATEDÒ
BYÒ FOREIGNÒ
!DDRESSINGÒ
THESEÒ
productivity and citizen engagement.
challenges requires a more inclusive agenda.
What about in terms of trade and economic integration. How would you assess the progress of African
What are the biggest barriers? how can governance regional integration so far?
No doubt, African regional integration has made
structures help address them?
strides in establishing protocols, treaties, and
SIGNIµCANTÒSTRIDESÒINÒESTABLISHINGÒPROTOCOLS
ÒTREATIES ÒANDÒ
Again, I would say that the diverse economies of African significant
regulations
in
addition
to
the
will
of
leaders.
However,
a
countriesCOUNTRIESÒ
present PRESENTÒ
significantSIGNIµCANTÒ
challenges
to regional
CHALLENGESÒ
TOÒ REGIONALÒ
integration and trade. Countries with more developed persistent gap between policy formulation and
industries, stable and free from conflict, usually implementation hampers progress. While RECs like
dominate the market, leaving countries experiencing ECOWAS, EAC, and SADC have improved intra-regional
civil unrest struggling to develop their economies. The mobility, inter-REC movement remains challenging.
latter become reliant on others for goods and services, While the AfCFTA aims to boost trade among Africans,
policies still limit regional commerce. Bilateral
hinderingHINDERINGÒ
equal regional
economicECONOMICÒ
benefits BENEµTSÒ
and domestic
EQUALÒ REGIONALÒ
ANDÒ
investment arrangements with non-African partner
motivation to participate in future integration initiatives.
countries in African economic zones also impact
I would also
addALSOÒ
that ADDÒ
the THATÒ
lack THEÒ
of aLACKÒ
unified
)Ò WOULDÒ
OFÒ AÒcurrency
UNIµEDÒ CURRENCYÒ
across the continent exacerbates return inequalities, intra-African trade. All this undermines Africa's regional
with countries with stable currencies benefiting more trade potential.
when securing loans, while others face disadvantages
due to high devaluation and high loan repayment tagged Some of the Integrate Africa Magazine readers may
to the US dollar. The lack of a harmonized Continental wonder about the relationship between the AfCFTA
and RECs in terms of integrating Africa. Can you
monetaryMONETARYÒ
and fiscalANDÒ
policy
also
complicates
financial µNANCIALÒ
µSCALÒ
POLICYÒ
ALSOÒ COMPLICATESÒ
transactions, especially rules on mobile money explain that in simple terms?
transfers, where differing tariffs increase transaction Yes of course, and it is important. The AfCFTA and RECs
costs, limiting
flows among those in the informal operate at different but complementary levels of
COSTS trade
ÒLIMITINGÒTRADEÒ¹OWSÒAMONGÒTHOSEÒINÒTHEÒINFORMALÒ
integration. RECs, such as ECOWAS in West Africa,
sector.
To foster regional integration therefore, new approaches SADC in Southern Africa, and EAC in East Africa, focus
to peace, security, and a stable business environment in on regional integration among neighboring countries
conflict-affected regions are essential. A continental that share geographic, cultural, and economic ties.
currency CURRENCYÒANDÒUNIµEDÒMONETARYÒANDÒµSCALÒPOLICIESÒWOULDÒ
and unified monetary and fiscal policies would These communities serve as testing grounds for policies
facilitate equal purchasing power and create a more like free movement and customs unions. The ultimate
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