/ 24 May 2013

SA dumps Nkrumah for Rhodes

Sa Dumps Nkrumah For Rhodes

In 1991, members of the African Union (AU) agreed to the Treaty of Abuja, which created the framework for the realisation of the economic part of Kwame Nkrumah's vision of a united Africa.

The treaty was agreed to in a period of great optimism after the release of Nelson Mandela and the imminent end of apartheid and the many wars it had created. It was also the period of "high globalisation" between 1990 and 1995 when there was a universal acceptance that the creation of a truly global economy was both possible and realisable and all would benefit.

The treaty was to start a process of integration that would lead to a copy of the European Union model. It would involve, first, a free trade area and then a customs union, followed by economic union, which would lead to monetary union and a single African currency – and all by 2023. It was helpful that the deadline for final implementation was so far in the future that no one signing the treaty in 1991 was likely still to be around and able to be accused of having been wildly optimistic.

The treaty recognised that Africa had already embarked on regional integration and that continental integration would have to be based on regional economic communities (RECs). The treaty recognised eight such communities, including the Southern African Development Community (SADC), the East African Community (EAC), the Common Market of East and Southern Africa (Comesa) and the Economic Community of West African States (Ecowas). Two of the more fanciful communities, the Intergovernmental Authority on Development (Igad) and the Community of Sahel-Saharan States (Cen-Sad) were also recognised by the AU, though either by history or by design are often said to be wrecks rather than RECs.

Igad included at one stage both Eritrea and Ethiopia, which were frequently in a state of war, Somalia, which did not exist as a functioning state, and Sudan, which was in a state of civil war throughout the period. The group never really had a hope of becoming a real economic community until its many geopolitical issues were resolved.

Cen-Sad, which includes 28 countries stretching from Kenya to Morocco, never made sense in terms of real economic integration and some countries only joined because it offered a slight chance of a possible improvement in market access.

Oil-rich countries
Countries in volatile geopolitical areas would hedge their bets by joining more than one economic community. Also oil-rich countries such as Angola are not particularly interested in African integration. Kenya, on the other hand, holds the record – it is a member of four regional communities: the EAC, Comesa, Cen-sad and Igad.

But some of the regional communities, which are more natural trade groups by reasons of history, culture and geographic proximity, have been remarkably successful. Perhaps the one that has moved closest to the AU timelines has been the EAC. Its governments have not only moved to create a customs union and an economic community but have also declared their intention of completing Nkrumah's vision of political union. In theory, the East Africans are way ahead of other communities.

But to have a customs union you have to have one common external tariff for all countries for goods coming into the customs area. The EAC only has what trade analysts call an "uncommon external tariff" and have deferred final agreement to 2015. In other communities such as Ecowas, it has taken years to create even a common external tariff and there is still no agreement on hundreds of tariff lines.

But the difference between RECs and wrecks is not agreement but a political commitment to a process. Although neither Ecowas nor the EAC have overcome the common external tariff hump, they have not given up on integration. In the EAC, as in West Africa, countries have increased their regional integration in areas even more sensitive than the trade in goods, such as the movement of people. They have opened up labour markets to an extent that seems inconceivable in Southern Africa. Kenya and Uganda have even opened their doors to tradespeople, not just white-collar professionals as in the other EAC countries.

When SADC hit its deadline at the end of 2010 to create a customs union, its members in effect gave up and, with support from Pretoria, are trying to create a free trade area between the EAC, Comesa and the existing SADC free trade area.

The reason for this failure of SADC integration stemmed in no small part from the fact that the century-old Southern African Customs Union, which includes South Africa, Botswana, Lesotho, Namibia and Swaziland, contains a customs revenue-sharing formula that benefits the smaller states. If the customs union was widened to include other countries then the revenues for these smaller countries would fall away.

No real benefits
But South Africa, which sees itself as the natural entrepôt for global trade with Africa, sees no real benefits in a broader customs union. In the logic of Pretoria, why buy the customs union cow when you can get all the free trade milk you need? Furthermore, the East and West African option of trying to integrate by freeing up the labour market has absolutely no appeal in Pretoria, which sees itself already awash with its own unemployed and millions of illegal workers.

All Pretoria needs and wants is free market access to Africa. It is essentially Cecil Rhodes's vision of a free trade area from Cape to Cairo. Kenya has always fancied itself as a potential competitor to South Africa but it lacks the economic gravity. For this reason, Kenya and other EAC members have pursued integration with much more vigour than any other region. Without a large economic community, East Africa in general and Kenya in particular have no hope of competing with South Africa.

As South Africa's relative economic and commercial importance in Africa wanes, like Kenya today, it will realise that it needs a community of nations to strengthen it and not just markets from Cape to Cairo. That day is still a long way off and the 250-million citizens of SADC will pay dearly for this "Rhodesian vision".

SADC, from the Congo to the Cape, has all the resources – water, land, minerals, energy and an incredibly resourceful population – to create prosperity for all. Instead, we have this dismal vision in which there will be 14 small SADC markets, none except South Africa large enough to sustain big industry and all digging holes to find ever more minerals and energy to enrich the Europeans and the Chinese. The price of this short-sightedness is the loss of Nkrumah's vision.

These are the views of Professor Roman Grynberg and not necessarily those of the Botswana Institute for Development Policy where he is employed