Regionalism and Africa’s Development

Regional integration is not new. It has been a continuing part of the post-World War II trade landscape. Recently, however, interest in regionalism has revived in both developed and developing countries. Existing arrangements have been, or are being, extended in their coverage; old arrangements are being revived; and new regional groupings are being formed. The three distinctive features of this trend are: the ‘conversion’ of the United States to the regional approach; the emergence of regional arrangements among industrial and developing countries; and an apparent move away from inward-oriented towards more outward-oriented arrangements among developing countries, particularly in the Western Hemisphere. In developing countries, these developments are being accompanied in many cases by unilateral trade liberalization.

A key aspect of the development strategy, shared by many policy makers and economists today, is the recognition of the dynamic potential of regional cooperation and integration whereby developing countries can break out of their narrow national markets and form regional groupings as an instrument of economic decolonization. They tend to attribute the causes of failure of different development policies in the developing world to the series of independent efforts carried out in isolated compartments. In their view, developing countries have inadequate resources or the technical capacity to compete with the relatively more developed ones in the same underdeveloped regions, much less with the developed areas. Consequently, it is necessary to establish a gradual process of economic integration, as Raul Prebisch, for example, puts it, ‘to settle the balance-of-payments deficit, overcoming difficulties arising from the size of national markets, raising productivity and efficient use of regional resources, and also by serving as a strong stimulus for the incorporation of technical progress and many other objectives in international policy’.¹ It is to this end that regional economic integration has emerged, in the post-war era, as one of the main developmental choices adopted by the developing countries.

The aims and objectives of the economic communities — the PTA, ECOWAS, ECCAS and SADCC — are all embracing and directed towards the eventual establishment of an African Common Market. They all broadly aspire to promote and enhance economic development through close cooperation among the member states in all fields of economic activity. Specifically, the member states undertook, in the treaties establishing their communities, to increase their existing transport and communications links and to create new ones as a means of strengthening the physical integration of the subregional groupings and promoting the movement of persons, goods and services within the communities. In the production sector, the member states declared with regard to industrial development that they would endeavour to promote autonomous industrialization within the communities through the development of the large intermediate and capital foods industries, promotion of the multinational enterprises, and especially development of the strategic natural resources of the subregions by establishing heavy industries, including metallurgical, chemical and petrochemical industries as well as intermediate and secondary industries such as mechanical, electrical and electronic industries. This, with a view to establishing an industrial base to support the development of agriculture and other key sectors. The integration of industry and the other sectors was meant to help trigger off a process of autonomous and self-sustained economic development and internal accumulation and put African economies in a better position to counter international competition.

Disappointment with the achievements of integration in Africa is as widespread as the continued belief in its virtues and importance. It would be no exaggeration to say that Africa’s experience with integration schemes over the last quarter of a century has been the experience of failure, and that the achievements of integration have been slight or non-existent.

As noted in the introductory chapter, since the beginning of the 1990s, the trend towards regionalism in world trade has gathered momentum at a time when other profound changes are taking place in the world economy. All over the world, the pace of regionalism has accelerated and the division of the world into three trading blocs based on Europe, the Americas and East Asia has become a serious possibility. This has created a renewed interest within Africa in revitalising and resuscitating regional groupings. Recognizing the sheer enormity of the changes now taking place, African countries have called for a re-examination of present policies and strategies regarding regionalism and the adoption of new initiatives that will respond effectively to the challenges. There is the fear that the position of Africa in the world economy will be weakened further if the continent does not strengthen the institutional and managerial capacity of its existing subregional economic schemes. This has been prompted by the fact that, given the changes in the world economy, a failure to overcome, or reduce, the costs of market fragmentation in regions whose countries have not yet begun to cooperate will mean that those regions, as a whole, will be less well placed in the future to attract the foreign investment, technology and know-how on which they will have to depend for their future growth. Besides, developments in the rest of the world have forced African countries to take a serious look at their efforts at regional integration.

The changing face of international relations, the technological developments accompanied by changes in the organization of production, together with a trend towards the formation of more integrated trading blocs, have not only revived interest in regionalism in Africa and other regions of the world, they have also posed some formidable challenges to the promotion of regional integration in Africa and, indeed, African development as a whole. In particular, the expanding scope of European Union development cooperation, the impact of the end of Cold War which has made the developing countries no longer of geostrategic interest to opposing factions, the substantial implications of the Uruguay Round, the completion of the Single European Market project, the creation of the European Economic Area, the enlargement of the European Union to include several new members and the ongoing and increasingly wide-ranging dialogue with the economies in transition in Central and Eastern Europe — all these factors have combined to marginalize African interests. They have combined to undermine the basis of Euro-African relations on which Lomé is predicated, making it increasingly irrelevant to the African ACP states.

The new challenges to regionalism, coupled with the obstacles encountered in managing it as a viable development strategy for Africa and lessons derived from past experience, show that existing economic conditions are not particularly favourable to intra-African economic integration. Accordingly, African countries need to emphasize the establishment of an enabling environment for supporting regional and subregional economic cooperation and integration. This requires the removal of internal deficiencies facing groupings in the broad areas of institutional arrangements, and emphasizing objectives, policies and instruments. Thus, if the coming decades are to witness the evolution of a viable dynamic process of intra-African economic cooperation and integration, and if regionalism is to be the basic element of a long-term development strategy for Africa, the revival process needs to be set in the context of a realistic appraisal of past experience and the new regional and global realities.

The combination of increasing regionalism, globalization of world production, rapid changes in technology and continued liberalization of world trade, has created a situation of great crisis for Africa which demands fundamental changes in policy and perspectives. For in the evolving world trading situation, the real winners will be those countries which are able to keep pace with technological development, creating and maintaining efficient, competitive production structures which would allow them to respond adequately to changing trends in demand in the world markets. The industrialized countries have responded to this challenge well ahead of the developing countries, especially those of Africa, as they have already adopted new policy measures and strategies. In major industrialized countries, a prominent aspect of this response has been a resurgence of interest in consolidation and further enlargement of their economic space so as, first, to stimulate, protect and support the development of the technological capacities; second, to encourage efficient, competitive industries; and third, to engender greater trade expansion. As noted above, this policy thrust has found concrete expression in the emergence and widening of economic arrangements among developed market-economy countries. ‘Europe 1992’ and NAFTA are two significant examples of such arrangements.