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Contributions from
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Focus
Regional integration in Africa
The price is not right yet
ACP countries need reforms
Mercosul dilemmas
ASEAN + 3
ECOWAS’ unfinished agenda
01/2007
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ECOWAS’ unfinished agenda
West African countries are struggling to escape from a vicious circle. So far, there has been little intra-regional trade. The infrastructure to support such business activities remains poor. Accordingly, neither private-sector managers nor governments have done much to speed up regional integration, even though that process – by boosting growth and spreading prosperity – would benefit all countries involved.
[ By Vladimir Antwi-Danso ]
The Economic Community of West African States (ECOWAS) was incepted through the Treaty of Lagos in 1975, with the goals of promoting trade, co-operation and self-reliance in the sub-region. The treaty was signed by 15 states (Senegal, Mauritania, Gambia, Mali, Niger, Nigeria, Benin, Burkina Faso, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea and Guinea Bissau). Cape Verde joined in 1977, but Mauritania left to join the Arab Maghreb Union (AMU) in 1999. From the very beginning, the idea was to promote market integration by coordinating and harmonising policies and by developing physical infrastructures (roads, telecoms, energy supply et cetera).
To accelerate integration, a revised ECOWAS treaty was signed in 1993. Its aspirations include a common market and a single currency. In the political sphere it envisages the establishment of a West African Parliament, an Economic and Social Council and an ECOWAS Court of Justice (to replace the existing Tribunal and enforce Community decisions). The treaty also formally assigned the Community with the responsibility of preventing and settling regional conflicts. Indeed, ECOWAS troops had already intervened in Liberia’s civil war more than a decade earlier. Perhaps, that military engagement did more to make ECOWAS an internationally known entity than economic achievements had done so far. An ECOWAS stand-by force with 1500 troops is to be ready for duty next year, and experts believe its numbers can rise to 5000 by 2010
The economics of integration
In economic terms, ECOWAS is on a four-stage trajectory: First, a free-trade area; second, a customs union; third, a common market (adding the free movement of factors to the earlier stages); and finally, a full economic union including a common currency. There has been some progress, but it remains slow.
ECOWAS has provided a right of residence and establishment for citizens of all member countries in the entire sub-region. Moreover, visas and entry permits have been abolished. With lesser success, ECOWAS launched a Trade Liberalisation Scheme (ETLS) in 1990. It was supposed to reduce and eliminate tariffs and non-tariff barriers systematically. Nonetheless, customs procedures are still cumbersome and exorbitant fees are levied on cross-border transport.
Those who want to speed up regional integration in West Africa have been facing several severe obstacles. Political instability is the most important. Since the late 1980s, West Africa was the theatre of several civil wars. Moreover, the region’s history is one of many military coups. In the absence of the rule of law, however, economic integration is impossible. This fact was exacerbated by the political elites of various West African countries, as they actively tried to undermine each other, rather than to cooperate.
As a related problem, governments have not been committed to implementing regional agreements domestically. This phenomenon, in turn, is closely linked to the elitist nature of integration promotion. In effect, awareness of the issue has not spread at the grassroots level.
Another distinct hurdle is the relative weakness of West African economies. Growing, dynamic economies provide a more conducive environment for promoting cooperation and integration than stagnant ones. In West Africa, governments are under pressure to prioritise domestic crisis management and, accordingly, to take protective measures. This problem is compounded by the fact, that the private sector is hardly involved in integration efforts. Project formulation and implementation as well as investment decisions are left to the public sector. Government-appointed decision-makers, however, are less guided by criteria such as profitability and productivity, but rather think in terms of political exigencies. In a sense, a vicious circle is at work. So far, there is little intra-regional trade in the sub-region. As a consequence, neither private-sector managers nor government leaders have done much to make integration happen. It is not a process already underway and delivering promising first results (as was the case, for instance, in the early years of the European Union). Accordingly, there is little concerted action by governments to improve the infrastructures or implement the regulations needed to boost intra-regional trade – and growth.
No doubt, diversifying production, removing bottlenecks, harmonising macro-economic policies within ECOWAS and accelerating intra-regional infrastructure and communication development would benefit all member states. The relevance of infrastructure cannot be over-emphasised. According to S.K.B. Asante (1997, p. 53), very limited progress has been made in infrastructural integration in Africa generally, even though “the success of the efforts to increase production and income growth in Africa is greatly dependent on the efficient performance and effective support of the transport and communications sector”.
Divergent monetary policy
A particular challenge to West African integration is that the region is institutionally organised along linguistic and cultural criteria, rather than according to economic imperatives. For example, Gambia is culturally and economically part of Senegal. Because it is Anglophone, however, it is neither a member of the French-speaking bloc of the Senegal River Basin, nor the monetary zone of the CFA Franc.
Indeed, the Francophone members of ECOWAS – with the exception of Guinea – have formed a monetary union of their own. When France withdrew from CFA management after the EU had embarked on its monetary union in 1992, the sub-regional CFA-countries created the West African Economic and Monetary Union (UEMOA).
Even though it was modelled exactly on ECOWAS lines, UEMOA is now making monetary integration for all of ECOWAS more difficult. After all, seven members have already pooled their monetary sovereignty, and they are linguistically close. In the meantime, a second monetary zone has been envisioned. The West African Monetary Zone (WAMZ) is aspiring to introduce a common currency called Eco in Nigeria, Ghana, Sierra Leone, Gambia, Liberia, and Guinea. The project is not on schedule, but it does seem likely that the Eco will be in use in 2009 or so. On that basis, the zones of the Eco and the CFA Franc may eventually form a monetary union for all of ECOWAS. However, one should probably not underestimate the hesitancy of French-speaking countries to pool macro-economic decision-making with Nigeria, a country that, on its own, has more people and a higher GDP than all of them combined.
Notwithstanding the various, daunting challenges, there are some quite positive prospects. The sub-region is experiencing a new wave of democracy. Instability seems to be subsiding as calm returns to Liberia and Sierra Leone and strife has not escalated in Cote d Ivoire. There is also a new crop of leadership, who seem to understand that integration is the only way to emancipate West African economies from the doldrums of stagnation, decay and decline. On top of all this, the international community as a whole is favourable of integration in Africa. The European Union, in particular, has been supportive of West African integration in various ways.
Dr. Vladimir Antwi-Danso
is senior research fellow at the Legon Centre for International Affairs (LECIA) at the University of Ghana.
vladanso@yahoo.com
Reference:
S.K.B. Asante, 1997: Regionalism and Africa’s development: Expectations, reality and challenges. Ipswich Book Co. Ltd., Ipswich
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