Regional integration remains an important vehicle for enhancing Africa’s development and growth prospects, including boosting trade both within and outside the continent. Consequently, African leaders have taken a number of initiatives, through various African Union decisions, aimed at advancing the regional integration process. These initiatives include the transformation of the Organization of African Unity (OAU) into the African Union (AU), the implementation of the New Partnership for Africa’s Development (NEPAD), the rationalisation of the RECs through the moratorium on the creation of new RECs, and the recognition of only eight RECs as the main building blocks of the African Union. The African Union Commission (AUC) is in the process of implementing the Minimum Integration Programmes to ensure that all the RECs are putting into practice the stages of the Abuja Treaty within the same timeframe.

The RECs continue to play a significant role in achieving Africa’s regional integration vision by pursuing and implementing various programmes. In the area of trade and market integration, some RECs, such as the Economic Community of West African States (ECOWAS), Economic Community of Central African States (ECCAS), Common Market for Eastern and Southern Africa (COMESA), South African Development Community (SADC) and East African Community (EAC), have launched their free trade areas. Other RECs, such as the Community of Sahel-Saharan States (CEN‑SAD), are steadily working towards this objective. Furthermore, EAC has been a full customs union since 2005, while COMESA launched its customs union more recently in 2009. ECOWAS is expected to launch its customs union by 2015. The customs union agenda of SADC and ECCAS, which was envisaged to materialise in 2010, is now expected to be launched during 2011. Arab Maghreb Union (UMA), CEN‑SAD, and Intergovernmental Authority on Development (IGAD) have yet to implement their customs union. In addition to these strides, momentum exists among some RECs to harmonise their Free Trade Agendas (FTA) to create larger trading blocs. The ongoing initiative on the grand FTA (SADC, COMESA and EAC) is a good example of this new trend towards unifying the sub-regional markets.

Despite these positive developments, a number of RECs continue to face enormous challenges that significantly affect their progress to higher phases of the integration agenda. These challenges also hinder the attainment of the continental vision of a common market in the not too distant future. Major challenges include prevalence of political instability in some parts of the continent, lack of economic diversification, continued multiple and overlapping memberships, inadequate financial resources to buttress the integration processes, lack of integration between national and regional or continental development policies and poor implementation of commonly agreed protocols and decisions at regional and continental levels.

The conflict situation in Africa has exacerbated poverty across the continent and made it even more difficult to accelerate economic growth and Africa’s development agenda. Conflicts have resulted in loss of human life, displacement of people, high numbers of refugees, child soldiers, high incidence of vulnerability and social exclusion, destruction of socio-economic infrastructure and erosion of institutional capacity.

Inadequate financial resources and lack of absorption capacity also continue to impede the implementation of regional integration activities and programmes by RECs and other pan-African institutions. Assessed contributions from OECD member countries are not adequate to finance the execution of activities and programmes. To a large extent, RECs depend on external assistance to carry out their activities and programmes. Further, duplication of functions and programmes and overlapping memberships by pan-African institutions and sub-regional organisations also exert pressure on the limited resources from OECD member countries, contributing to poor delivery of results.

Implementation of Minimum Integration Programmes (MIP)

The African Union Commission, in close collaboration with the RECs, has developed the Minimum Integration Programme (MIP). The MIP comprises a set of activities, projects and programmes to be implemented by the RECs in order to accelerate the regional and continental integration process. The MIP has identified the following key areas of the integration agenda to focus on trade, infrastructure development, free movement of people, and peace and security. The Conference of African Ministers In Charge of Regional Integration endorsed the MIP, which the AU Assembly subsequently approved.

The African Union Commission has developed an Implementation Action Plan to deliver on the MIP. The action plan currently faces a number of challenges, including lack of funding. Efforts, however, are being made by implementing agencies (RECs, member countries, the African Union Commission) to mobilise resources. Paramount to these efforts is a proposal by the African Union to establish an integration fund dedicated to supporting the activities and programmes of the MIP. The AU Assembly has approved this initiative, and the AU Commission will soon undertake a pre-feasibility study on the establishment of the fund. Furthermore, the RECs are in the process of mainstreaming the action plan into their programmes and sensitising their member countries about it.

All pan-African institutions, including the RECs, are making efforts to accelerate the implementation of regional integration activities and programmes in Africa. Most notable efforts include the ongoing Tripartite Free Trade Area among the member countries of EAC, COMESA and SADC. Box 3.3 describes some of the recent developments in this area.

Box 3.3: Africa’s proposed Free Trade Areas (FTAs)

In an effort to fast-track the attainment of the African Economic Community, as outlined in the Abuja Treaty, RECs are implementing a number of activities and programmes. These include the recent Decision by Heads of State and Government of the COMESA, SADC and EAC member countries to establish a single FTA. The inter-Regional Economic Communities FTA is expected to help enlarge African markets, unlock productive potential, and increase intra-Africa trade. It would also help facilitate free movement of business people across the RECs by opening up the borders. At the same time, it would make the enlarged market and economic bloc more attractive to foreign direct investments, in particular those motivated by economies of scale.

To help accelerate the achievement of inter-FTAs in Africa, the United Nations Economic Commission for Africa (UNECA) is in the process of carrying out a study. Among other things, the study will analyse the impact of inter-FTAs on African economies, assess the benefits and costs to countries, and examine the impact on RECs’ efficiency and effectiveness. The study will also consider the impact of inter-RECs’ free trade areas on the EPAs that the African countries are currently negotiating with the European Union. The study will assist countries in making informed decisions on their participation in the inter-REC FTAs.