Tracking regional integration in Africa

18 October 2016

One of the challenges hindering the implementation of Africa’s regional integration agenda has been the lack of an effective monitoring mechanism. How can the Africa Regional Integration Index help filling that gap?


Africa’s integration agenda, laid down in documents such as the African Union’s (AU) Agenda 2063 and Minimum Integration Programme, as well as the Treaty Establishing the African Economic Community (the so-called “Abuja Treaty”), is ambitious. Through such frameworks, African leaders have time and again reaffirmed their aspiration to build a continent in which people, goods, services, and capital flow freely across borders; in which world-class infrastructure criss-crosses the map of Africa; in which policies (particularly macroeconomic policies) are harmonised; and in which a spirit of pan-Africanism and collaboration drives relations between African states. Agenda 2063, for example, specifically mentions improving the continent’s infrastructural integration, achieving free movement of capital, people, goods, and services, ensuring seamless borders, and implementing trade facilitation.

However, turning this vision into a reality has proved challenging. Though some of the continent’s regional economic communities (RECs) have made impressive headway in certain areas of integration within their respective sub-region, there remain areas in which progress has been limited. On average, the costs of trading across borders within Africa remain high, in many cases higher than those of trading with countries outside of the continent, and the continent’s largest economies still trade with each other on a most-favoured-nation basis. Africa’s international infrastructure networks, such as the Trans-African Highway network, continue to have missing links, while flight connectivity is centred around a limited number of continental hubs, making it often time-consuming and costly to travel between African countries. This is reflected in the low levels of formal intra-African trade in goods, which accounts for about 16 percent of total recorded African trade, lower than in South and Central America (17 percent) and much lower than in North America (42 percent), the European Union (62 percent), and Asia (64 percent).

Why have Africa’s dreams of an integrated continent suffered from stalled and uneven progress, given the bold frameworks that have been adopted at the pan-African level? The answer lies in the challenges of implementation. One of these challenges is the lack of a monitoring mechanism for Africa’s regional integration agenda. Put simply, there is no official mechanism for measuring, in a scientific way, which countries are making the most progress in regional integration, in which areas individual countries are falling behind, and which policies and institutions have proved to be the most effective in driving Africa’s integration agenda forward.

Indeed, in 2013, the AU-ECA joint conference of ministers, the conference of African ministers in charge of integration and the board of the African Development Bank (AfDB) all decided that the continent needed such a monitoring mechanism for regional integration. That is why the AU Commission, the AfDB and United Nation Economic Commission for Africa (ECA) decided to develop the Africa Regional Integration Index. The index aims to be a barometer for governments and the general public, enabling them to check the performance of countries and RECs in terms of regional integration. It tracks progress, identifies bottlenecks to be addressed, and informs policy decisions at the national, regional, and continental levels with the aim of a more integrated Africa.
 

Developing the Africa Regional Integration Index

The index was developed based on consultations with the secretariats of six RECs recognised by the AU, 33 African member states, and experts on regional integration and its measurement from universities and international organisations from within Africa and beyond, including AFRISTAT, the EU, the Organisation for Economic Co-operation and Development, the United Nations Conference on Trade and Development, the United Nations University, the World Bank, the World Economic Forum, and the World Trade Organization. The index was also presented at, and revised based on feedback from, the Seventh AU-ECA Conference of Ministers, the Seventh Conference of African Union Ministers in Charge of Integration, the April 2013 meeting of AfDB’s board, and the First Joint Session of the Committee of Directors General of African National Statistical Offices and the Statistical Commission for Africa in December 2014.

Based on these consultations, the index development team across AUC, AfDB, and ECA developed a methodology for the index in which indicators were to measure African countries’ progress towards implementing their commitments under integration frameworks that had been agreed at the pan-African level, such as the AU’s Minimum Integration Programme. For the first edition of the index, it was decided to focus on examining member states’ integration with the RECs of which they are members, rather than with the continent as a whole, and to rank member states only within their RECs.[1]

The methodology developed following these consultations included numerous indicators spread across seven dimensions. However, due to a lack of data for many indicators, this number was reduced to a core of 16 indicators for which data was available for at least 80 percent of African countries. As a result, two of the dimensions (social and cultural integration and political economy) were dropped from the Index. The index thus covers five dimensions: (i) trade integration, (ii) regional infrastructure, (iii) productive integration, (iv) free movement of people, and (v) financial integration and macroeconomic policy convergence. The graphic below (Figure 1) shows the structure of the index and the indicators that fall within each of these dimensions.
 

Figure 1: Structure of the Africa Regional Integration Index

 

Source: AfDB, AUC and ECA, 2016.
 

The index team collected data from national statistical offices, RECs, and corridors directly, after conducting training with their designated representatives to ensure that the data would be comparable across countries. In addition, the project collected data from national statistical offices’ and RECs’ websites and publications and from public international databases, including those of the African Airlines Association, the AfDB, the ECA, the International Air Transport Association, the International Trade Centre, UN COMTRADE, UNCTAD, the United States’ Energy Information Administration, and the IMF’s World Economic Outlook database.
 

Selected key findings

Overall scores for the eight RECs stand at below half of the scale, showing that overall integration in the regions could significantly progress. Looking at individual dimensions, Africa appears to have made the most progress in trade integration, followed by free movement of persons. The least progress has been made in productive integration, followed by financial integration and macroeconomic policy convergence.

Examining individual regional groupings, the East African Community (EAC) is the REC which performs the best overall, followed by the Economic Community of West African States (ECOWAS). The EAC also has higher than average scores across all dimensions of regional integration, except for Financial and macroeconomic integration.

At the country level, countries with the largest economies are not always the best performers in terms of regional integration. Some countries that are leading the way in their respective regions include Cameroon, best performing country overall in the Economic Community of Central African States (ECCAS); Côte d’Ivoire, best performer in ECOWAS and the Community of Sahel-Saharan States (CEN-SAD); Kenya, best performer in the Common Market for Eastern and Southern Africa (COMESA), EAC, and the Intergovernmental Authority on Development (IGAD); and South Africa, best performer in the Southern African Development Community (SADC).

Finally, some “low-hanging fruit” that would seemingly boost regional integration at limited cost are to be found in the area of free movement of persons, where most REC-level legal instruments on free movement of persons have not been ratified by all of the RECs’ member states. Similarly, the average African still requires a visa before travel for trips to 55 percent of other African countries; steps to liberalise visa regimes for other Africans would therefore seem to be a straightforward way to boost regional integration. Ghana, Nigeria, Rwanda, and Zimbabwe have all recently launched initiatives to liberalise their visa regimes for travellers from other African countries.
 

Next steps

Monitoring mechanisms such as the Africa Regional Integration Index are far less effective if they cannot track progress over time. That is why the index will not just be a one-off report, but a recurring publication of the three institutions. It will also facilitate further policy analysis based on the data collected for the index that can inform the integration agenda. Given that the continent is currently negotiating the Continental Free Trade Area (CFTA), which, if achieved, would promise to revolutionise Africa’s integration, a credible monitoring mechanism is needed now more than ever, in order to ensure that what is agreed through the CFTA is put into practice.

For the preparation of the second edition of the index, the three institutions behind it (AUC, AfDB and ECA) will conduct a thorough review of the methodology, including through gathering feedback from member states and other stakeholders on the first edition and how the methodology might be improved. They will then revise the methodology accordingly. In addition, the three institutions will add a system for measuring countries’ integration with the continent as a whole, as well as for comparing all African countries’ performance in this regard against that of one another.


Author: William Davis, Associate Economic Affairs Officer, African Trade Policy Centre, United Nations Economic Commission for Africa (ECA).


[1] AfDB (African Development Bank), AUC (African Union Commission) and ECA (United Nations Economic Commission for Africa). 2016. The Africa Regional Integration Index: 2016 Report.

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