Regional Integration in Africa: The Opportunities

Around five years ago the author delivered a series of workshops in each of the major Regional Economic Communities in Africa – the East Africa Community (EAC) , the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS). The workshops were centred around the trade opportunities such regional integration would bring and the macro economic benefit to the respective member states. Optimism was high and, despite many challenges in the four Communities, the benefits were recognised and well articulated by regional and international, commentators. During the workshops there was huge interest in the European Union model, and many examples were presented which could be replicated in Africa – for example the EU Authorised Economic Operator scheme. In other areas, for example customs and other regulatory controls, the Communities realised they could do a ‘technology leap’ – not only were national Single Window platforms discussed but also Regional Single Window potential. One strong message in relation to the EU model was that it all takes a long time, the European journey was not a short one and there should be no assumptions – but let’s not consider Brexit in this piece.

It is becoming increasingly apparent that Africa is set for growth in the decades to come – economies such as South Africa, Nigeria, Kenya, Ghana and Ethiopia have become very interesting in relation to trade and investment. Even land-locked nations are emerging quickly – consider Rwanda and Zambia for example. Regional integration in Africa can only be a catalyst to opening up, not only individual markets, but whole regions to UK exporters. The Regional Economic Communities can learn, and are learning, from where examples such as the European Union and NAFTA have got it wrong in some respects.  Concepts, such as the various freedoms and monetary union have become significant discussion points as have visa free travel and rules of origin / proof of origin. In certain areas such discussions have led to relatively prompt implementation – for example, ease of movement within the EAC region and electronic certification of origin in SADC.

It is interesting to note how current thinking and planning in Africa aligns with, and possibly provides a catalyst for the projected economic growth of the Continent as a whole. Firstly, we had the ‘tripartite agreement’, essentially looking to bring together the three regional communities in East and Southern Africa, that is the EAC, COMESA and SADC. The logic is sound when the geographic spread of the Communities is considered, for example COMESA’s spread includes Egypt in the North right down to Swaziland in the South. It must also be recognised that some countries have membership of more than one Community.  This makes the concept of ‘tripartite’ sound. Consider this – the EAC (Kenya, Tanzania, Burundi, South Sudan, Uganda and Rwanda) has established a Customs Union with a Common External Tariff – a huge market for UK exports. Potentially more exciting, but certainly a longer term goal, is the concept of the (Africa) Continental Free Trade Agreement, this would certainly have a beneficial consequence for UK companies utilising global value chain solutions for their products and seeking pan-African markets. Institutions are already in place to support this broad thinking – ARSO, the African Organisation for Standardisation is all about the establishment of Continental standards, an important, but difficult, aspiration on which they are making slow but steady process. This article is being written in Durban where, yesterday, the author had meetings with Transnet the port, rail and infrastructure operator in South Africa. One aspect which was emphasised several times during the meeting was that of partnership between the ports of Africa. The ports rely on each other if carrier’ schedules are to be maintained providing business with predictable and efficient logistic chains. The idea of a Single Window connecting ports communities systems was also discussed as was the ability of Africa to do a ‘technology leap’ by utilising Blockchain  platforms to support the envisaged huge growth in trade and the sophistication of emerging, and emerged, value chains such as the automotive sector in Morocco, South Africa and Nigeria.     

The Authorised Economic Operator approach is also interesting. The author is involved in assisting to plan the implementation of a pan EAC AEO system. An important element of the planning will be to instil processes and procedures that are capable of attracting mutual recognition by principal trading partners.

The key point here is that whilst the Regional Economic Communities are maturing and considering exciting alliances, many of the supporting stakeholders, for example those described above in the fields of standards and logistics, are also planning strategically for a regional approach leading, eventually, to a Continental approach. Countries such as Kenya, South Africa and Nigeria are cited under the UK’s Prosperity Fund initiative so, it would appear, several elements are coming together to support increased trade with the African regional community member states and Africa as a whole.

Article written by Jon Walden, an Associate of Strong & Herd LLP 

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