Regional Integration in Africa

Welcome back from the break! I took some holidays but also I attended a couple of conferences. One of them (the meeting of the Academy of International Business sub-Saharan Africa Chapter) took place in August in Johannesburg (Jo’burg to friends). It was a fantastic opportunity to share ideas with scholars and business people based or interested in sub-Saharan Africa.

Entering South Africa proved to be a different experience for Africans and non-Africans. Africans had to get a visa in their country – a process which is a pain in the neck. Those from Western countries didn’t need any visa at all. Only five African countries (Seychelles, Mozambique, Rwanda,Comoros,Madagascar) offer visa-free access or visas on arrival to other Africans . This is a reflection of one of the themes that came across repeatedly during the conference discussions: there’s a pressing need for more Regional Integration in Africa.

Africa is the region with the lowest intra-regional trade in the world: intra-African trade amounts to only 11.3% of Africa’s total world trade. Extreme institutional variance contributes to this. Not only have countries received a range of differing institutional legacies from their various colonizers but also traditional systems co-exist with those legacies:

• There are over 3,000 different informal and legal systems;
• over 3,000 informal trade rules and regimes;
• over 1 million informal finance groups.

This diversity, along with a lack of social trust, and very high transaction and administrative costs, are some of the factors behind the low level of intra-Africa trade, according to Franklin Ngwu from Glasgow Caledonian University.

One idea underlay the Joburg discussions on integration: at times, Africans favor outsiders over others from the continent. The visa situation is one sign but there are others. For instance, expats from the continent aren’t as well received as those from other regions. And the same happens with foreign products. Some have labelled this phenomenon the “liability of Africanness.”

But Africanness can prove to be an asset, not a liability. Embracing the values behind Africapitalism may contribute to it. This was another theme that came across frequently during the conference. It deserves a whole post so I will leave it for another time. Today I will just direct you to an earlier post in which I introduced the notion of Africapitalism.

Fostering African integration will also help turn Africanness into an asset. The creation of Regional Economic Communities – of which I spoke previously – points in this direction. Have you experienced any of its advantages?