Towards an integrated and prosperous and peaceful Africa

This report first presents the historical context of the African integration process and the progress of African leaders towards achieving a united, integrated and prosperous continent under the Abuja Treaty and AU Agenda 2063.

The Abuja Treaty, signed in 1991, lays the groundwork for the creation of African Economic Community (AEC), whereby the economies of the member states of the AU will be fully integrated and an African Economic Community created. The goal of the AEC is to transform the fifty-five (55) African economies into a single economic and monetary union, with a common currency and free mobility of capital and labour. The Sirte Declaration, signed in 1999, and the Constitutive Act of the African Union aim at fast-tracking Africa’s integration through the creation of key institutions such as the African Central Bank, an African Monetary Fund, an African Investment Bank, the African Court of Justice and the Pan-African Parliament. Establishing the three continental financial institutions has been slow because member states have been slow to ratify the relevant instruments. Although the other institutions—the African Court of Justice and the Pan-African Parliament—are in place, they have limited powers to carry out their mandates specified in the Abuja Treaty.

According to the Abuja Treaty objectives, Africa’s integration process is expected to be completed by the creation of the African Economic Community (AEC), following a six-step sequential approach over 34 years. With the AU Commission playing a coordination role, the realisation of the AEC is predicated on the progress achieved by regional economic communities (RECs), the key pillars of Africa’s integration process.

While some RECs have made significant progress, others are far from achieving their visions and goals, as specified in their founding treaties. Overlapping memberships in many RECs continue to pose a significant challenge and remain an intractable obstacle to deeper regional and continental integration. Overlapping memberships not only exacerbate persistent funding and human capacity problems in support of regional programmes, but also lead to challenges of effective coordination of policies and programmes to foster closer regional and continental integration.

While some progress has been achieved, significant bottlenecks stand in the way of deeper integration, including narrow markets, poor infrastructure networks, cumbersome administrative procedures that impede trade integration, in diversified production bases coupled with weak backward and forward linkages between agriculture and industry, as well as weak institutional and legal mechanisms for implementing regional and continental programmes and projects. In addition, the reluctance of member states to cede sovereignty to key organs of the African Union stands in the way of accelerated African integration. Persistent conflicts in Central Africa, the Horn of Africa, Northern Africa and West Africa also present challenges to integration.

Despite these challenges, important objectives have been reached. The signing of the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) on 22 October 2008 in Kampala, Uganda, was a big step in the right direction. That FTA encompasses 26 countries of its three RECs with a combined population of 527 million, a gross domestic product (GDP) of USD 624 billion and a GDP per capita of USD 1,184. The three RECs make up nearly half the African Union’s membership of 55 countries, contribute more than 58% of the continent’s GDP and account for 57% of the total population of the African Union.

The Tripartite FTA is established on a tariff-free, quota-free and exemption basis, and adopts the principle of variable geometry by simply combining the existing FTAs – COMESA, EAC and SADC – into a single FTA. This inter-REC FTA is expected to eliminate the problem of multiple memberships, increase the critical mass of trading instruments, cushion and mitigate persistent internal and external trading shocks, enlarge markets for goods and services for member states concerned, promote inter-REC and intra-African trade, and enhance the economic and social well-being of the people of the region. It is also expected to stimulate the formation of other FTAs in other regions of Africa.

Most RECs have completed milestones in compliance with the various stages of the Abuja Treaty. The free movement of people is now a reality in most RECs. The landmark signing of the African Continental Free Trade Agreement (AfCFTA) and Free Movement of Persons in March 2017 by the AU Heads of State and Government is a good move. However, although key institutions have been established in line with the Abuja Treaty, their powers remain limited owing to the reluctance of member states to cede sovereignty. Multiple memberships are costly in both financial and human terms and prevent advancing to deeper forms of regional and continental integration. Decision-making based on consensus is problematic because decisions signed are not legally binding, and countries that do not implement decisions face no sanctions of any form.

The current method of financing regional and continental integration is both unpredictable and unsustainable. That donors fund most of these programmes requires a major shift. The division of labour between the AUC and RECs has not been clarified – and remains a work in progress. And persistent conflicts slow the pace of integration and divert limited resources earmarked for development.

This report was prepared by the Department of Economic Affairs (DEA), African Union Commission, in collaboration with the Regional Economic Communities (RECs) and the African Capacity Building Foundation (ACBF).