The political economy of

‘
Africa’s integration, the
continental Free Trade Area
and Africa’s developmental
regionalism paradox.
Dr Gabila Nubong
School of Economics
North West University- Potchefstroom- South Africa.
Gabila.Nubong@nwu.ac.za
 Objectives of the Paper.
i. Present a political economy framework for Africa’s integration.
ii. Re-examine the ‘implementation gap’ to ascertain whether
conceptualisation & design is more faulty than traditional factors.
iii. To explore a developmental regionalism paradigm as an alternative
paradigm to the conceptualisation question.
iv. To briefly examine Africa’s Continental Free Trade Area within a
political economy conceptual framework and the extent of its
adoption of developmental regionalism framework.
v. To make recommendations regarding the future approach to
Africa’s integration focusing on a developmental regionalism
framework.
 Exploratory Research Questions.
1. What explains the continued misalignment between regional
integration agreements (Abuja treaty objectives towards the AEC) and
the implementation objectives?
2. Is there a conceptualisation and design challenge associated to the
integration pace and developmental outcomes of Africa’s integration?
3. Is the emphasis and focus on market integration, akin to the creation
of the CFTA the most suitable integration & developmental path for
Africa?
4. What would an alternative framework that mainstreams & centre
stages development (developmental regionalism) look like?
5. Is there a sufficient case to be made for a change of course in Africa’s
integration trajectory?
 Outline of Presentation
Revisit the Political Economy of Africa’s integration
Debate.
Briefly present an alternative conceptual framework for
Africa’s integration – Developmental regionalism.
Interrogate whether the adoption of the CFTA represents
a real new dawn or just more of the same in its emphasis
on market integration.
Attempt to make a case for the adoption of a
developmental regionalism approach to Africa’s
integration.
 The Political Economy of Africa’s integration:
Explaining the ‘implementation gap’
A reality in which political rhetoric and commitment to regional
integration have not always been matched by actual implementation
commitments (Olivier 2010; Draper 2012).
Akokpari (2008:106) identifies some of the ‘structural bottlenecks’ that
militate against effective integration in Africa.
i) multiple memberships of states in various regional organisations,
ii) the low levels of intra-regional trade that is compounded by the
continent’s stronger trading relation with partners external to Africa.
iii) Tension between Some States and their Regional Organisations with
respect to the preservation of their national sovereignty
iv) Concerns over the unequal distribution of the costs and benefits from
integration among states.
 The Political Economy of Africa’s Integration-A
faulty conception or design? .
McCarthy (1999) finds fault with both the conception and design of most
of Africa’s regional integration schemes.
He argues that integration was conceptually designed as an inward looking
instrument of industrial development.
 In this context, the principal goal of integration and growth in intra-
regional trade was for economic development and structural
transformation through industrialisation;
 Integration may aggregate small individual economies into larger regional
markets but ‘new’ regional economy and the combined markets would
still not have been large enough to promote the high levels of industrial
development promised by regional integration aspirations (Oyejide et al.
1999:7).
 The Political Economy of Africa’s Integration
Hartzenberg (2011) blames Africa’s poor ‘implementation of
integration commitments’ record on the paradigm of linear
market integration adopted by the African Union in the Abuja
Treaty.
Proposes ‘Instead of adopting a step wise integration of goods,
labour and capital markets, with eventual monetary and fiscal
integration, focus on supply side constraints and adopt a deeper
integration agenda that includes services, investment, and
competition policy
Such emphasis on a ‘non-trade exclusive’ agenda is at the heart
of the developmental regionalism debate.
 Conceptualising Developmental Regionalism.
Davies (1996) argues for the adoption of a ‘development integration’
approach that stresses the need to adopt both a macro and micro co-
ordination in a multi-sectoral program embracing production,
infrastructure and trade,
Equitable balance from the benefits of regional integration by
complementing efforts towards trade integration by efforts towards
regional industrial development.
UNCTAD (2013) defines developmental regionalism as cooperation among
countries in a broader range of areas that could include investment,
research and development, as well as policies aimed at accelerating
regional industrial development and regional infrastructure provision, such
as building up of better networks of roads and railway (UNCTAD, 2013).
Conceptualising Developmental Regionalism.-2
• Adejumobi and Kreiter (2016) framework encompasses 6 elements:
i) A strong institutional architecture and capacity to drive the regional integration
agenda,
ii) A clear articulation of goals, objectives, essence, nature, and direction of the
regional integration project, and benefits of regional integration as a mechanism
for facilitating regional development,
iii) ensuring peace and security as a composite and foundation of a regional
integration agenda,
iv) evolving complementary and symmetrical benefits for all members states
involved in the regional development project,
v) articulation of regional public goods and development priorities necessary for
facilitating economic transformation in the region including on infrastructure,
trade, agriculture and food security, private sector development and
industrialization
vi) evolving a bond of common regional citizenship and identity necessary for
regional human capital mobilization.
Conceptualising Developmental Regionalism-3
• Ismail (2018) cooperation between African countries in four interrelated
areas, including
i) cooperation on building mutually beneficial trade integration ( fair
trade integration),
ii) cooperation on industrial development and upgrading in regional value
chains (transformative industrialization ),
iii) cooperation on investment in cross border infrastructure and trade
facilitation ; and
iv) cooperation on building of democracy, good governance and peace
and security.
 The CFTA & Trajectory of Africa’s Integration
1. The 18th Ordinary Session of the Assembly of Heads of State in January
2012, adopted a decision to establish a Continental Free Trade Area (CFTA)
by an indicative date of 2017.
2. African leaders held an Extraordinary Summit on the African Continental
Free Trade Area (AfCFTA) from 17-21 March 2018 in Kigali, Rwanda, during
which the Agreement establishing the AfCFTA was presented for signature,
along with the Kigali Declaration and the Protocol to the Treaty
Establishing the African Economic Community relating to the Free
Movement of Persons, Right to Residence and Right to Establishment.
3. Benefits anticipated by the promoters of the idea include a boost to intra-
African trade and by extension industrial development, economic
diversification and economic growth among other key advantages.
4. The CFTA is also expected to amplify Africa’s market and economic
possibilities to the rest of the world and particularly to global investors.
 The general objectives of the AfCFTA-1
create a single market for goods, services, facilitated by
movement of persons in order to deepen the economic
integration of the African continent and in accordance with the
Pan African Vision of “An integrated, prosperous and peaceful
Africa” enshrined in Agenda 2063;
create a liberalised market for goods and services through
successive rounds of negotiations;
contribute to the movement of capital and natural persons and
facilitate investments building on the initiatives and
developments in the State Parties and RECs;
 The general objectives of the AfCFTA-2
lay the foundation for the establishment of a Continental
Customs Union at a later stage;
promote and attain sustainable and inclusive socio-
economic development, gender equality and structural
transformation of the State Parties;
enhance the competitiveness of the economies of State
Parties within the continent and the global market;
promote industrial development through diversification
and regional value chain development, agricultural
development and food security; and
 Approach & Specific Objectives
1. progressively eliminate tariffs and non-tariff barriers to trade in
goods;
2. progressively liberalise trade in services;
3. cooperate on investment, intellectual property rights and
competition policy;
4. cooperate on all trade-related areas;
5. cooperate on customs matters and the implementation of trade
facilitation measures;
6. establish a mechanism for the settlement of disputes concerning
their rights and obligations; and
7. establish and maintain an institutional framework for the
implementation and administration of the AfCFTA.
 Justification for the CFTA
1. Create a single continental market for goods and services, with free
movement of business persons and investments.
2. Pave the way for accelerating the establishment of the Continental
Customs Union and the African customs union.
3. Expand intra African trade through better harmonization and
coordination of trade liberalization and facilitation regimes and
instruments across RECs and across Africa in general.
4. Resolve the challenges of multiple and overlapping memberships and
expedite the regional and continental integration processes.
5. Enhance competitiveness at the industry and enterprise level
through exploiting opportunities for scale production, continental
market access and better reallocation of resources.
 Article 7 Phase II Negotiations
In pursuance of the objectives of this
Agreement, Member States shall enter into
Phase II negotiations in the following areas:
(a) intellectual property rights;
(b) investment; and
(c) competition policy.
 The CFTA and Developmental Regionalism.
According to UNECA (2017), the CFTA will bring together fifty-four
African countries with a combined population of more than one
billion people and a combined gross domestic product of more
than US $3.4 trillion.
It has the potential of creating an enlarged marketplace of 1.2
billion people for all the 55 nations of Africa and
 the agreement initially requires members to remove tariffs from
90% of goods, allowing free access to commodities, goods, and
services across the continent and
it is estimated that the agreement will boost intra-African trade
by 52 percent by 2022.
 The Empirical Case for the CFTA
Mevel and Karingi (2013) model the impact of the CFTA with the
removal of all tariffs on trade and improved trade facilitation.

 They find that the trade creation effects of the CFTA would
exceed and more than compensate for trade diversion effects.

Under the CFTA reform, intra-African trade is estimated to

increase by 52.3 per cent ($34.6 billion),
Africa’s industrial exports are forecasted to enjoy the highest
gains, expanding by 53.3 per cent ($27.9 billion).
 Conclusion: Developmental Regionalism & CFTA-1
CFTA is more of the same- Trade Liberalisation agenda with its
still to be fulfilled promised benefits.
Adopt a pragmatic approach that entails the re-evaluation of
the current disproportionate emphasis on market integration
through a trade liberalisation agenda in favour of a
developmental regionalism approach.
A trade component that seeks to promote mutually beneficial
trade would also place an equal amount of emphasis on
industrial development and the upgrading of regional value
chains that are a prerequisite for transformative
industrialisation.
 Conclusion: Developmental Regionalism & CFTA-2
Equal energy invested in promoting cooperation on
cross border infrastructure investment and trade
facilitation would yield greater developmental benefits
than a mere focus on market integration.
Get other actors (private sector, Civil society & national
constituencies).
Africa needs to re-examine its focus on market
integration in favour of the pursuit of a developmental
regionalism agenda.