Background

Regional integration has been the goal of African countries at least since the attainment of independence more than 50 years ago. Many arguments for speeding up the integration process have been advanced from many quarters since then—political leaders, economists in government and the private sector, and researchers in universities and think-tanks. It is generally agreed that integration would be politically and economically beneficial for Africa in the global economy.

In response, African countries have tried to strengthen their regional economic communities, streamlining their mandates, and with some regions even considering closer political union. Platforms for an eventual monetary union have been set up in East and West Africa. Importantly, Africa’s apex political body, the Organization of African Unity became the African Union. In spite of these efforts, the goal of an economically integrated Africa is still elusive. The aim of the planned African Economic Conference 2013, which as in past years will be organized jointly by the African Development Bank, the Economic Commission for Africa and the United Nations Development Program, is to address these challenges and suggest solutions.

With 54 countries, some landlocked, but all contending for the same external markets, and attempting to overcome the same infrastructure challenges, the predominant view is that in spite of recent progress, Africa remains politically and economically fragmented. Without economic integration, Africa will not be able to harness the scale economies in production and benefit from the demand from large markets that for instance spurred and sustained growth in some Asian economies. Fractionalization, if not addressed, will continue to impede the continent’s development. 

However, in spite of much debate and variations in policy stance, it is still not quite clear what African countries should do in concrete policy terms to move the process forward. A good starting point is to address infrastructure bottlenecks as well as institutional and regulatory constraints through, for example, public-private partnerships. Promoting the free movement of goods, services, labour and capital is critical for regional economic integration as well as for spatial inclusion within countries.

During the past decade, African economies have posted high levels of growth, close to 6 per cent on average—considered by leading agencies to be among the highest in the world. The natural resource boom and new discoveries of oil and gas in many countries in Africa have been a key factor.

However, the economic turnaround would not have been possible without policy and structural changes within Africa itself. Macroeconomic reforms have opened up the economies, improved performance, increased investment and lowered inflation. Above all, the macro-risk associated with the African economies has been reduced substantially and countries have been able to go to the markets in the past few years. Notably, much of the recent borrowing on international markets has been targeted to infrastructure in a bid to open up markets, increase power generation and raise competitiveness. This is having economic reverberations beyond individual country borders and is helping countries to take another look at the benefits of regional economic integration.

For much of the past 50 years, the monocultures of the African economies meant that focus was on trade beyond Africa—i.e. the search for foreign exchange. Therefore, African countries trade more with their former colonial rulers than with their neighbours. Today, things have changed considerably in parts of the continent. In East Africa, for example, regional trade has a greater share in total trade for some countries than that to Europe and Asia. Increasing trade ties are thus changing the integration picture. Regional integration is now driven more by the private sector and civil society—which see benefits in terms of cost and competitiveness—than governments. It is becoming important to build domestic constituencies for regional integration. 

The African Economic Conference 2013 on Regional Integration will therefore offer a unique avenue for researchers, policymakers and development practitioners from Africa and elsewhere to debate regional integration, from the point of view of its impact on growth and development, and the political economy that drives the adaptation process. In light of Africa’s search for economic transformation, the moment is propitious to investigate the contribution of regional economic integration in light of Africa’s much changed economic circumstances, with an expanding middle class and higher investment inflows than in the past, and remittances from the Diaspora. The impact of these new factors on domestic demand, trade, job creations and more generally inclusive growth are yet to be put in their proper perspective.

The African Economic Conference is now the leading Forum for the discussion of Africa’s burning issues of the day. The 2013 Conference will be the eighth edition and will be held in Johannesburg, South Africa, on October 28 to 30, 2013.