AU integration hinges on ease of economic activity

Weak infrastructure and the high cost of doing business in post-conflict countries is preventing real integration in Africa.

Weak infrastructure and the high cost of doing business in post-conflict countries is preventing real integration in Africa.

Economic integration has been on the agenda of the African Union since its inception, but a complex array of regional structures aimed at uniting the continent’s 54 countries (excluding Morocco, which is not a member) has created confusion, according to Professor Charles Adjasi, an expert on development finance at the University of Stellenbosch’s business school.

He says the multitude of free trade agreements have their own rules that are sometimes contradictory. “These are far too complex and we need them to be streamlined.” The membership of some regional organisations such as the Southern African Development Community overlap with others such as the Common Market for East and Central Africa, which in turn overlaps with the East African Community.

Adjasi, who is Ghanaian, says the continent’s steady economic growth has made it a better place than it was in the 1980s, when more Africans were struggling to make ends meet.

Growth has also helped post-conflict countries such as Rwanda, Liberia, Sierra Leone, Angola and Mozambique to recover, but weak infrastructure and the high cost of doing business are still preventing real integration.

“Africa has structural problems that we need to overcome if we want to have a real impact,” Adjasi says.

Political commitment required
For integration to become a reality, the policies and proposals made at intercontinental level should be backed up by a real political commitment, says the professor.

In 2012 African heads of state, meeting in Addis Ababa, adopted an action plan to boost intra-African trade, which remains dismally low. Earlier this year, the issue was again on the agenda at the biannual AU summit in Addis Ababa.

Adjasi says infrastructure funding should also be speeded up.
The major cost of cross-border trading lies in transportation: “Africa is the most expensive continent to travel in.”

Thirdly, the rules for cross-border trade should be simplified and standardised because the current arrangements “promote informal trade”. “Traders are encouraged by the difficulties to go underground, which leads to corruption.”

Adjasi believes the continent’s major powers should lead the way to promote integration. “Nigeria and South Africa should form a strong team and then speak to Kenya and others. This is how the Organisation of African Unity was formed.” 

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