Regional integration: the importance of the economy and political will

23/05/2014
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Has regional integration come off the rails? Why has Africa reached an impasse in this area despite concerted effort? What steps can be taken to accelerate the process? These were the central questions addressed on Thursday, May 22, during the Governors’ Dialogue at the AfDB's 2014 Annual Meetings in Kigali. The theme of this year's high-level session was on the theme of the meetings: "The next 50 years: the Africa we want".

The session began with a presentation by Nkosana Moyo, CEO of the Mandela Institute for Development Studies in South Africa, and Acha Leke, Director at McKinsey & Company, to senior AfDB officials on a regional integration success story concerning European aviation company Airbus. Back in the 1970s, European manufacturers were losing ground in the rivalry with their American counterparts, which produced 12,000 aircraft each year in comparison to the Europeans’ 4,000. France, Germany and the United Kingdom decided to join forces in a merger agreement covering both component production and aircraft assembly.

Over time, the new consortium gained ground in the trans-Atlantic rivalry and began to secure a greater share of the global market. One example of this joint success is the Airbus A380, which is manufactured in Spain, France, Germany and the United Kingdom. This integrated approach involved the development of infrastructure and the introduction of a common organisational structure. By manufacturing parts and assembling the aircraft in different countries, Airbus was able to create jobs and develop buoyant markets.

This task-sharing, multi-national approach to component production also led to the emergence of captive markets through the creation of a stable environment. Over time, the aviation industry became an "icon of the European club".

Africa can draw several lessons from this European model. First and foremost, each country needs to make a firm commitment and undertake concerted efforts in favour of regional integration. This type of pact is based on a win-win partnership. Furthermore, it is founded on a "traditional" approach to the political economy, under which economic development is underpinned by strong political will. This type of approach is reflected in early European integration agreements and treaties, such as the European Coal and Steel Community, which delivered both peace and development in the region. Finally, it is a system in which everyone reaps a share of the rewards.

The presentation's authors – Moyo and Leke – invited their audience to think about the possibility of creating joint manufacturing ventures in industries such as automotive and steel. The AfDB Governors then split up into four groups – Strategic Policy, Regional Integration, Productive Employment and Conflict and Fragility – to consider the subject in greater depth.

The resulting proposals focused on the need for strategic leadership to enhance the impact of higher growth and deliver inclusion, saying that the current vogue for economic policy must now give way to strategic action and institutional arrangements between leaders and civil society. Within this context, it was suggested that the African Development Bank must ensure that political dialogue takes place and that African leaders ought to develop and deliver clear policies that are likely to win popular support.

The discussions focused on two key aspects of regional integration: intra-regional trade and workforce mobility. The recommendations indicated that political will on its own would not be sufficient. There is also a need for a secure environment and the harmonisation of business legislation and regulations. The question of visas must be resolved in a pragmatic manner, in both the short and long terms and should be issued online as a matter of course. The Governors also recognised a pressing need to harmonise regional priorities across the continent and to overcome the obstacles posed by differing agendas. The AfDB, meanwhile, must streamline the existing array of disparate initiatives and funds and help to optimise regional strategies.

On the issue of productive employment, they said, efforts must focus on the role of women in the labour market, self-employment, improvement of the business environment and the promotion of job-creating sectors such as infrastructure and housing.

The final topic of discussion, conflict and fragility, is particularly important given the current situation across Africa. The Governors came to a general consensus on the key priorities for development in this area: peace, security and the rule of law, with conflict reduction having a critical role to play. By its nature, conflict is a highly political issue and must therefore be managed at the highest possible political level. However, they said the AfDB has an important post-conflict role to play, especially when it comes to demobilisation.

The Governors' Dialogue is a meeting of governmental Ministers and the AfDB’s Board of Governors, the institution's most senior body.