1. 1 8 th Session of the Committee on Trade, Regional Cooperation and Integration 6 - 8 February 2013 Addis Ababa, Ethiopia Report on Africa’s Regional Integration Agenda By Daniel Tanoe Report on Africa’s Regional Integration Agenda By Daniel Tanoe

2. 2 Outline   Integration Imperative   An Overview of Progress How is Integration Progressing?   The Challenges   Areas of Action 2

3. 3  Create united, modern, safe, inclusive and self-reliant economic and political space.  Transform African economies.  Wider economic space permits addressing trans boundary issues.  Bigger markets and diversified production create greater wealth.  Regional integration a strategic link to globalization. 3 I Integration Importance

4. 4 II An Overview of Progress  RECs have diverse sectoral programmes and are at different integration phases.  Progress is mixed:  Visible in trade, some aspects of transport and communications, policy convergence.  Less visible in Free movement people/labour mobility, policy and programme harmonization and non- tariff barriers.  Rationalization of RECs started. AU recognizes only 8 of the 14 RECs. COMESA/SADC/EAC Tripartite Initiative 4

5. 5 i) Trade  Formation of FTAs, CUs, Elimination of Trade Barriers through improved trade facilitation  The COMESA/SADC/EAC Tripartite Initiative  The CFTA Initiative  Under the CFTA, intra regional trade is expected to increase by USD34.6 billion in 2022 5

6. 6 ii) Infrastructure  Serious infrastructural gaps at both the sub- regional and continental levels particularly transport and energy.  New impetus provided by: NEPAD, PIDA, 6

7. 7 Trans African Roads and Corridors  Building hard surface roads  Rehabilitation, interconnection, upgrading and extending transport infrastructure  The trans-African Highway Network – Critical missing links remain, particularly in central Africa and North-South routes.  Corridor Management Institutions 7

8. 8 Railways and Air transport Railways development (e.g. in UEMOA – Senegal- Mali- C ô te d’Ivoire-Burkina Faso  The Yamoussoukro Decision on the liberalisation of African air space making a difference 8

9. 9 Energy   Africa has enormous and diversified energy potential in terms of hydropower and other resources.   There is increased focus on developing energy resources in a regional integration context. 9

10. 10 iii) Free movement of People/Labour mobility  Beyond ECOWAS and EAC progress is limited.  Structural factors (low levels of development, unemployment and lack of regulations on residence) limit labour movement potential. 10

11. 11 iv) Policy Convergence   Many African RECs established macroeconomic convergence schemes or deregulated their financial environments. 11

12. 12 v) Peace and Security  Peace and security accorded attention by RECs, AU and UN. But tensions still simmer.  The question of who pays peace and security costs is vital. 12

13. 13   There is a serious mismatch between expectations and outcomes.   A number of challenges need to be addressed. III The Challenges 13

14. 14 - Inadequate commitment to regional integration - - Supply-side constraints - - Institutional aspects - -Compatibility with WTO/EPAs - - Financing The Challenges are:

15. 15 (i) National focus vs. regional-orientation (ii) Private sector and civil society are not effectively on board (iii) Doubts on equality of benefits and the fear of polarization (iv) Sovereignty: Who is in charge? 1. Inadequate commitment to regional integration

16. 16   Few quality tradeables.   Low trade traceable to low production, poor productivity, and limited range.   RECs focused on exchange, giving less attention to agricultural breakthroughs and modernization of industry. 2. Supply-side constraints

17. 17   Integration institutions suffer weaknesses, overlaps, and insufficient harmonization and coordination and national de-links.   Institutional constraints compounded by inadequate national mechanisms for integration.   Governments are also reluctant to subordinate national sovereignty to that of the Community 3. Institutional aspects

18. 18   WTO and EPAs bring new demands on regional integration.   The negotiating capacity of RECs and member States is overstretched.   Research on implications needed. 4. Compatibility with EPA/WTO

19. 19   Financing problems cut across the entire range of integration activities.   RECs have limited capacity resulting in overdependence on external support.   Resource mobilization for regional integration is a critical activity including innovative sources. 5. Financing

20. 20   These include: Infrastructure strengthening. Addressing fears and concerns on unequal benefits of regional integration. Strengthening RECs’ capacity. Broadening Community support Assuring equal benefits of regional integration. Addressing regional commons/Peace and Security. Implementing the MIP IV. Areas of action 20

21. 21 i) Infrastructure strengthening   The physical integration of Africa bedrock of the continent’s integration.But numerous gaps in all areas. 21

22. 22   High priority to completion of missing links in the Trans African Highway.   PIDA contains a number for regional and continental focus that need to be rigorously implemented. Roads

23. 23   Give attention to the underlying inefficiencies resulting in the high costs and frustrations on the corridors.   Establish or strengthen proper and autonomous institutions for managing the corridors. Land locked countries and the corridors

24. 24 Energy   The development of energy resources should be a matter of special focus.   AU/RECs should champion the efforts to build a constituency for financing such major energy projects as the INGA project. 24

25. 25   Reasons: Countries jealously guard their sovereignty for fear of its being jeopardized through regional projects. Country apprehensions to join: eg. FTAs Fear of implementation of free movement of people protocols. 25 ii) Addressing fears and concerns on unequal benefits

26. 26   AU/RECs to encourage reluctant countries to join FTAs, and study the reasons.   AU/RECs to sensitize countries on implementation of free movement/labour mobility protocols at least for businessmen and professionals.

27. 27   Overlapping results in replication and wastage of resources and confuses national policies.   REC’s human and financial capabilities need augmentation. iii) Strengthening of REC’s 27

28. 28 Supporting harmonization initiative between COMEA/SADC/EAC to establish the common FTA. Recognizing and building on momentum generated for convergence of UEMOA/ECOWAS on adopting a common external tariff. Providing support to CEN-SAD, ECOWAS and UMA to create a grand FTA.

29. 29 Advocating for supranational authority for RECs. Sensitizing RECs members to implement community decisions. Mobilizing donor support for RECs.

30. 30 iv) Broadening Community support   AU/RECs to champion efforts to enhance civil society participation, knowledge of the issues and projects to establish legitimacy for the process.   Specific initiatives could include: Support cinematographic and audiovisual activities for integration Organize workshops, seminars and other activities for sharing experience on regional integration Advocate for integration day in all sub-regions. 30

31. 31   Benefits of regional integration are neither automatic nor spontaneous.   RECs to establish Structural Funds for lagging Community members along the lines of the European Union. 31 v) Assuring equal benefits of regional integration

32. 32   Peace and security are at the center of integration concerns.   UN to add value to the efforts of the RECs and the AU. vi) Addressing regional commons

33. 33   The scale of needed resources is huge. New sources and approaches needed particularly for infrastructure.   Financing for infrastructure gaps, in particular through the establishment of Development Funds.   Exploring potential of innovative financing (Diaspora, remittances, Integration Fund). vii) Financing 33

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