Department of Economic Affairs

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Joint Annual Meetings of the AU Conference of
Ministers of Economy and Finance and ECA
Conference of Ministers of Finance, Planning and
Economic Development
STATUS OF INTEGRATION IN AFRICA (SIA)

• Department of Economic Affairs
• African Union Commission

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OUTLINE OF THE PRESENTATION

• Introduction
• I. Status and Progress made by the RECs
• II. Minimum Integration Programme (MIP)
• Conclusion

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Introduction

• The Abuja Treaty stipulates that African States
  must endeavour to strengthen the Regional
  Economic Communities (RECs), in particular by
  coordinating, harmonizing and progressively
  integrating their activities in order to attain
  the African Economic Community (AEC) during a
  thirty-four (34) year transition period
  subdivided into six (6) varying stages
• However, in spite of the adoption and
  implementation of numerous initiatives, the
  results about Regional and Continental
  integration still remain mitigated.

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• During the Second and Third Conferences of
  African Ministers of Integration, held in Kigali
  in July 2007 and Abidjan in May 2008,
  respectively, various important recommendations
  came up, namely
• Need for the AU Commission, in close
  collaboration with other key stakeholders to
  review the Abuja Treaty, taking into account the
  Sirte Declaration

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• Need for the Commission to coordinate the
  activities of RECs as well as to harmonize their
  policies and programmes as a key strategy to
  enhance the rationalization process
• An assessment report on the Status of the RECs
  was presented and discussed during the Third
  Conference of African Ministers in charge of
  Integration held in Abidjan, in Cote dIvoire
  from 22 to 23 May, 2008.

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• The report was submitted for adoption by the
  Assembly of the African Union held in
  Sharm-El-Sheikh, Egypt, from 30 June to 1 July
  2008.

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I. Status and Progress made by the RECs

• Stage 1 Completed
• Stage 2 Completed (except IGAD which is in the
  process of conducting a study on its FTA
  including gradual elimination of its tariff and
  non tariff barriers)
• Stage 3 In progress
• Stage 4 no progress yet
• Stage 5 no progress yet
• Stage 6 no progress yet

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STATUS OF THE REGIONAL ECONOMIC COMMUNITIES
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• COMESA, ECOWAS, SADC, EAC, and ECCAS have
  achieved Free Trade Area
• CENSAD and IGAD are in the process of having
  their own
• COMESA, ECOWAS planned to have their own Customs
  Union by the year 2009
• ECCAS and SADC in 2010
• CENSAD and IGAD in progress
• EAC is already in Customs Union and hope to fully
  implement all programmes to support the Customs
  Union by 2010

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• Since IGAD Member States also belong to COMESA,
  IGAD could adopt similar programmes with the
  latter and the study that it intends to carry out
  on FTA should be in line with that of COMESA
• IGAD could also be part of the tripartite
  agreement that is taking shape between COMESA,
  EAC and SADC

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• CEN-SAD, which also includes ECOWAS Member
  States, could be invited to closely study the
  status of ECOWAS and harmonize its programme with
  that of the latter

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• It is notable that among the inter-REC activities
  is the collaboration of the EAC particularly with
  the COMESA, SADC and the IGAD. A number of
  activities are taking place within the context of
  the Inter-Regional Coordination Committee

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• The question remains on how to move to the fourth
  stage which is the continental customs union that
  has to be achieved by the year 2019
• One way is to make sure that at regional level,
  and in line with variable geometry, RECs to
  continue implementing the FTAs, and customs
  union, before 2019
• The remaining stages common market, economic and
  monetary union should also be implemented taking
  a close look at the remaining fifth and sixth
  stage

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• Secondly, while RECs are moving to accomplish
  these stages in line with the Abuja Treaty, a
  study on the Minimum Integration Programme (MIP)
  which prioritized some sectors to be implemented
  at the continental level could be used as
  guidelines towards bringing RECs to achieve the
  remaining stages.

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Challenges

• The Continents regional integration has not been
  matched by commensurate political will and
  commitment of Member States to effectively
  implement agreements reached under various
  integration arrangements.

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Contd. Challenges

• The implementation process by some Member States
  is very slow. Additionally, in some RECs that
  have achieved FTA, there are some Member States
  that have not complied with the FTA Protocol
• The integration process on the Continent is also
  constrained by the numerous conflicts in some
  Member States

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Contd. Challenges

• Conflicts hinder integration and development by
  curtailing economic activities, destroying
  infrastructure and constituting a serious
  impediment to the flow of trade and investment
• The absence of self-financing mechanisms for the
  regional integration organizations

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Contd. Challenges

• The inadequacy of mechanisms to ensure that the
  benefits of integration are equitably distributed
  among the Member States
• The lack of involvement of the private sector and
  civil society in the integration process and the
  disproportionate time allocated to
  conflict-related issues,

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Contd. Challenges

• The continents development endeavours are also
  compounded by numerous challenges, prominent
  among which are the HIV/AIDS, malaria and
  tuberculosis pandemics, which pose serious
  threats to human capital development

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Contd. Challenges

• The current global economic crisis may also pose
  its own challenges as well as create
  opportunities for regional economic integration
  in Africa.
• On the one hand, it could spin-off a slow down in
  trading and economic activities, and adversely
  affect the revenue of Member States
• While on the other hand, it could force African
  countries to trade more amongst themselves and
  engage in higher volume economic transactions
  with each other, thus facilitating the
  integration process.

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• Given the challenges facing Africa in the slow
  down of integration process and based on a study
  prepared by the AUC on the Rationalisation of the
  RECs, the Third Conference of African Ministers
  in charge of integration (COMAI III) held from 22
  to 23 May 2008 in Abidjan, Côte dIvoire,
  requested the AUC, in collaboration with RECs, to
  complete development of the Minimum Integration
  Programme (MIP) in the priority sectors with
  clear timeframes and benchmarks to be used by the
  RECs in attaining convergence of RECs programmes.

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II. Minimum Integration Programme (MIP)

• The AUC, in order to implement the
  Recommendation agreed upon, series of
  consultations has been made with the RECs in
  order to get the same understanding on the MIP.

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Definition of MIP

• The Minimum Integration Programme is composed
  of different activities, projects and programmes
  on which the RECs agree to speed up and conclude
  successfully the Regional and Continental
  integration process.
• The MIP is, therefore, seen as a convergence
  mechanism between the RECs, which should
  concentrate on some priority areas of concern at
  the Regional and Continental level where the RECs
  can enhance their cooperation and benefit from
  comparative advantages and good experiences of
  each one in the field of integration.
• The MIP encompasses the attainable
  objectives in terms of the AU Strategic Plan
  (Four years), supported by a Follow up and
  Evaluation mechanism. It is supposed to be
  implemented by the RECs, the Member States and
  the AUC, in cooperation with the different
  Development partners of Africa.
• The MIP has been developed in relation with
  the integration approach of variable geometry
  according to which the RECs should progress at
  different speed in the integration process.
  Indeed, the RECs will continue to implement their
  respective programmes(considered as their own
  priority programmes) and try concurrentlt to
  carry out the other activities in the MIP.

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Objectives of the MIP

• The MIP aims at several objectives among which
  the main ones are the following
• Assign the RECs in relation to the implementation
  of the Abuja Treaty
• Highlight the Regional and Continental priority
  programmes initiated by the Commission and whose
  implementation, in the name of the principle of
  subsidiarity, falls within the competence of the
  National or Regional authorities
• Identify the Regional and Continental projects
  within the AUC and the RECs whose implementation
  rests on the principle of subsidiarity
• Stregthen the ongoing initiatives of economic
  cooperation between the RECs and identify the
  measures likely to speed up integration in a
  selection of priority sectors or areas
• Identify the priority sectors which demand a bold
  coordination and harmonisation within each REC
  and between them
• Emulate the successful experiences of
  integration in some RECs and generalise them in
  the other Communities
• Help the RECs identify and implement the priority
  activities in order to cross the different stages
  of integration provided for in Article 6 of the
  Abuja Treaty
• Help the RECs implement the MIP through a clearly
  determined calendar
• Develop and implement other support measures to
  facilitate the establishment of a single market
  around priority sectors
• Identify the projects and programmes whose
  implementation is based on the activation of
  inter-REC relations.

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What the Concept of Minimum means?

• In the framework of the MIP, there are two school
  of thoughts
• One School of thought
• Consider 1-4 activities and concentrate on them.
  It is believed to be more flexible and could be
  financed and implemented easily
• Argument is
• RECs are in different stages as outlined in the
  Abuja Treaty. Taking into consideration all the
  sectors proposed in this thought, the advantage
  is that all RECs regardless of which stage thy
  are would be able to cope up with other RECs
• Second School of thought
• Consider all the sectors recognised by the RECs
  as priority, within each of them identify few
  activities and consider them as MIP. Argument is
• All sectors are priority in Africa

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Contd. Concept of MIP

• and
• all the areas are interconnected thats why we
  opted to prioritize first some key sectors, then
  subsectors within those sectors and finally
  identified priority activities/projects under
  each subsector
• The Second School of thought is believed to be
  more realistic due to the fact that all RECs will
  have something to do in the sense that the
  performance achieved by some RECs could be a
  source of stimulus to the remaining RECs and the
  Ministers during our Fourth Conference of African
  Ministers in charge of integration, held in
  Yaoundé 7-8 May 2009 were in agreement of the
  second thought

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Contd. Concept of MIP

• The Ministers adopted MIP as a dynamic strategic
  framework for the integration process at the
  Continental level
• The AUC, is in the process of collaborating with
  the ADB, to explore the possibility of
  establishing a special continental fund for the
  implementation of the MIP and
• collaborating with Member States, RECs and our
  partners, to organise sectoral meetings to
  identify the prioritized sectors which are
  considered as accelerators of the integration
  process within a defined time schedule in line
  with the African Union strategic Plan

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How to implement the MIP?
The successful implementation of the minimum
integration programme depends on concerted
efforts of Member States , RECs, the AUC, and
other development partners. At sectoral
meetings, which the AUC plans to organize with
the RECs, detailed plans of action will be
developed in every sector by experts in that
field in order to adapt them to the needs of
every REC. With regard to every MIP activity,
there is a result obligation, a fixed indicator
for the realization of the objective as well as a
distribution of responsibilities.
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How to finance the MIP?

• Three essential sources of financing are
  generally proposed
• The internal sources (Statutory contributions of
  the Member States and the Alternative sources of
  financing being identified)
• The contribution of African financial
  institutions  (ADB, African Central Banks)
• The external sources (essentially from
  Development partners)
• But for the implementation of the MIP not to face
  any problem of financing, we propose the
  establishment of an Integration Fund devoted to
  the financing of the MIP and which can be located
  in the African Development Bank or the future
  African Investment Bank, being established.

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How to finance the MIP? (Contd.)

• Furthermore, the AUC will undertake a series of
  consultations with the RECs to work out a
  financing Strategy of the MIP
• Identify the financing sources of the different
  RECs
• Identify the funds used by the RECs to implement
  the ongoing activities and projects contained in
  the MIP
• Identify the existing sources within the AUC
  allotted to activities of the MIP being
  concretised
• Estimate the necessary amounts for the
  implementation of each activity or project
  contained in the MIP
• Establishment of a Financial Resource
  Mobilisation Strategy from Development partners
  
• Propose the necessary measures for the
  establishment, functioning and management of the
  Integration Fund and
• Determine the relations between the Specialised
  Regional Funds within the RECs and the proposed
  Integration Fund.

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Conditions of Success of the MIP implementation

• The RECs will play the role of regional
  coordinator of all the projects and activities to
  be implemented by them. Moreover, they will
  ensure the monitoring of the activities of which
  the responsibility falls on the Member States of
  every REC.
• The African Union Commission will ensure the
  coordination and harmonization of all the
  activities at the continental level.
• The progress made in the implementation of the
  MIP will feature in an annual report by the RECs.
  

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Contd. Condition of Success of MIP

• The AUC will draft an annual report on the
  monitoring of activities of the MIP on the basis
  of the different reports produced by the RECs and
  present it to the decision making organs namely,
  summits of the African Union as well as the
  Conference of African Ministers of
  integration.
• Regarding the evaluation of the MIP, a biannual
  evaluation of the programme based on the annual
  monitoring reports and other documents produced
  by the RECs should be made.

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• The MIP will be implemented on phases and the
  main priority areas selected by the RECs and
  Member States to constitute the first phase of
  the MIP (2009-2012) are
• Trade and industry
• free movement of persons, goods, services and
  capital
• infrastructure and energy
• peace and security and
• agriculture
• The MIP agreed upon is contained in the following
  table

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Components of MIP
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Components of MIP
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Components of MIP
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Components of MIP
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Components of MIP
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Components of MIP
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• Example 1. Free movement of persons
• ECOWAS Has made progress within its region such
  that no visa is required anywhere for nationals
  of Member States who travel across the ECOWAS
  region
• What is minimum for ECOWAS to do is to make
  ECOWAS Customs Union more effective. Progress
  should be made on free movement of goods,
  services and capital in order to move to the next
  stage (Common Market)
• Example 2. Monetary Policy
• ECOWAS is about to have a second monetary zone by
  2009. To make it more effective, ECOWAS need to
  start implementing it so that within four year
  period it would be fully implemented

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Conclusion

• In implementing regional and continental
  integration agenda, progress has been made but a
  lot still need to be done
• To fast track the process, the MIP is a consensus
  document that needs
• Collective energy from all the stakeholders MIP
  need to be integrated at National, Regional and
  Continental Plan of Development so that is owned
  by Africa

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Contd. Conclusion

• ii. MIP need to be integrated by various partners
  because it is an opportunity for our partners to
  support the integration through assisting in
  implementing the existing projects of the MIP
• Call upon Pan African Institutions partners
  ECA/ADB to own it
• The MIP if implemented can provide hope to
  African Population

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THANK YOU
Mr. Charles Kossi Awitor Head of Economic
Integration and Regional Cooperation E-Mail
cawitor_at_yahoo.fr