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East African Regional Integration
Regional integration in East Africa
- Towards the United States of Africa -
by
Tatenda Zingoni
Teachers on Financing for Development
University of Stellenbosch
Contents 2 PAGE
Definition of terms 3
List of Tables and Figures 4
- Integration Regional
1.1 Overview of regional integration 5
regional blocs from Africa 1.2 6
- Overview of the first attempt to integrate the regional East African Community 10
- Overview countries of the East African Community
3.1 Structure of the economy 13
- Creating Community Africa News (EAC 2)
4.1 of the Customs Union 17
Common Market Protocol 4.2 18
- Conclusion 19
- Bibliography 21
Definition of Terms
Preferential Trade Area (PTA) the ways in which members apply tariffs import types produced by members other than imports produced by non-members. Members can set tariffs on imports from member countries
without a free trade zone – a preferential trade area with no tariffs on imports from other members. As in the areas of trade preferential, members can set tariffs on imports from countries not members
Customs Union – an area free trade in which members impose common tariffs on non-members. Members may also cede sovereignty to a government single customs.
Common Market, a customs union that allows free movement of factors of production
(It to say, capital and labor) across national boundaries in the field of integration.
Economic Union – A common market unified monetary and fiscal policy, including a common currency.
Political union, the last stage of integration, in which they become members of a nation. National governments cede sovereignty over economic policies and social to a supranational authority the establishment of common institutions and judicial and legislative proceedings, including a common parliament.
1. Regional Integration
1.1 Overview of regional integration
Integration Regional is the process by which countries in a given geographic area, decide to combine efforts with respect to their markets and economies. In Africa, the current structure of the integration Regional integration is modeled on the linear market. The model of successive stages integration of goods, labor and financial markets, and the integration of monetary and fiscal (McCarthy, 2007).
In the linear model of integration, countries at the beginning of the region through the establishment of a zone of free trade and a common external tariff common form a customs union and eventually creating a common market.
Africa has been behind in the field of global development. With a population of about 1 billion, and a number of countries with economic structures in the continent delay in the development program. One of the most common reasons for the lack of significant progress in African economies is the small size makes them unable compete on the world market. Regional integration is seen as a response to the size "small market in different countries.
According to McCarthy (1999), "… the economic unit is the solution to Africa's development and political unification is necessary for economic integration efforts. "The author continues to recognize that political considerations are made that will boost the integration of many agreements (McCarthy, 1999: 15-6).
In an attempt to catch up development through industrialization, Organization of African Unity (OAU) in collaboration with the Economic Commission for Africa (ECA) came with the Action Plan Lagos (LPA) in 1980. PLA is focused on developing a regional strategy for development in Africa, with steps leading to a Common Market (OAU, 1981).
The Economic Commission for Africa (ECA) has led the major components on which the integration Later the continent would be based on. Economic Community of West African States (ECOWAS) was established in 1975 and therefore predates the PCPA. Before the Common Market for Eastern and Southern Africa (COMESA) a preferential trade area (PTA) and Southern Africa were instituted. Central Africa was represented by the Economic Community of Central African States (ECCAS) in Central Africa. The Arab Maghreb Union (AMU) was created in 1989, which subsequently resulted in complete coverage of all the different parts of the continent (UNECA, 2004).
In an attempt to avoid dependence on apartheid South Africa, Southern African Development Coordination Conference (SADCC) was established in 1980. During the period when South Africa was still under apartheid, which was excluded from the area groups. block SADCC later became the Southern African Development Community (SADC) in 1992, with South Africa joining in 1994 after the end of apartheid (CEPA, 2004).
In 1991, the adoption of the Abuja Treaty has served as a contributing factor to stimulate the development agenda of Africa as a result of the PLA. The fundamental principles of the Treaty were "solidarity and collective autonomy, the principle of self-sustaining and endogenous development and a policy of self-sufficiency in basic needs "(African Development Bank, 2000: 11).
1.2 In the African regional blocs
Despite the opening of a first frame the OAU was to be followed by country Africa regional proliferation block occurred which led to a number of countries belonging to more than one block. The following table shows the current block and also indicates the existing regional complex overlaps exist. A problem with these games is the confusion in terms of issues such as harmonization of trade policies, tariffs, etc.
Table 1: African economic community regional
Community
Members
Lens shown
Current Situation
Arab Maghreb Union (AMU)
Algeria, Libya, Mauritania, Morocco, Tunisia
The full economic union
Free trade area has not been reached, but the conventions in force for investments, payments and land transport
Economic Community of Central and Monetary Community (CEMAC)
Cameroon, Central African Republic (CAR), Chad, Republic of the Congo (Congo), Equatorial Guinea, Gabon
The complete economic union
Monetary and customs unions reached, competition laws and harmonized business
Market Joint Eastern and Southern Africa (COMESA)
Angola, Burundi, Comoros, Democratic Republic of Congo (DRC), Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe
common market
The common market operates, but because members who belong to other regional economic communities there are challenges in coordinating
Community of Sahel-Saharan States (CEN-SAD)
Benin, Burkina Faso, Central African Republic, Chad, Djibouti, Egypt, Eritrea, Gambia, Libya, Mali, Morocco, Niger, Nigeria, Senegal, Somalia, Sudan, Togo, Tunisia
Free Trade Area and European integration in certain sectors
In July 2010, leaders agreed to reach a new framework on the structure, objectives and programs of the organs of the Community.
African Community (EAC)
Kenya, Tanzania, Uganda, Rwanda, Burundi
The full economic union
Common Market Protocol was initiated in July 2010
The Economic Community of Central African States (ECCAS)
Angola Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Guinea Eq, Gabon, Sao Tome and Principe, Rwanda
The full economic union
Little has been tested in the trade liberalization program established for the region
Economic Community of Great Lakes Countries (CEPGL)
Burundi, Rwanda, Democratic Republic of Congo
Economic union Total
arrears of current members have the activities of the block at an impasse
Economic Community of African States Western States (ECOWAS)
Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
The full economic union
Preferential trade agreements (PTA) signed
Indian Ocean Commission (IOC)
Comoros, Madagascar, Mauritius, Reunion, Seychelles
Sustainable development through cooperation in diplomacy, trade and environment
Vibrant commercial program
IGAD on Development (IGAD)
Djibouti Ethiopia, Eritrea, Kenya, Somalia, Uganda, Sudan
Full integration economic
There has been progress on the fronts of the peace maintenance, Given the turbulent situation in the region
The Union Mano River (MRU)
Liberia, Guinea, Sierra Leone
Integrating multi-sectoral
African Customs Union (SACU)
Botswana, Lesotho, Namibia, South Africa, Swaziland
Customs Union
Customs union in place with Rand Monetary Union (with the exception of Botswana)
Southern African Development Community (SADC)
Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe
the total economic union
As can be seen in the table above, the main goal of most communities is to establish an ERC economic union. East Africa Eastern Union is the only regional group has made significant progress the goal of full economic union. A number of factors act as barriers for similar progress in other blocks.
The Customs Union of South Africa (SACU) is currently in the process of customs union within the linear integration model. Although the SACU countries belonging to SADC it is prudent to build on the foundations of the integration of SACU in southern Africa. Namibia, Swaziland and Lesotho are currently implanted in the currency area Rand (RMA). Zimbabwe is currently operating under a regime where multi-currency U.S. $, rand SA, Botswana pula and the pound sterling was used in transactions. This occurred because of contraction of the economy and the environment hyperinflation that decimated the value of local currency.
Trade links between SA and Zimbabwe provide a possible explanation for the inclusion of Zimbabwe in the RMA. This will allow substantive action has been made integration in countries of southern Africa.
Generalized overlapping regional groupings are as an obstacle to integration agenda. Policy coordination between countries is hampered due to differences in the objectives of the groups. While Member States can be entered into special groups because of the perceived benefits of doing, which belongs to several groups made another obstacle for a number of countries.
BURKT countries (Burundi, Rwanda, Kenya and Tanzania), including the East African Community and belonging to at least one regional groups. Kenya and Uganda, two are three, while Tanzania, Burundi and Rwanda are two. This is a difficult (or impossible) for countries in the testing process and the balance between the demands of the various blocks that belong.
potential hot spots include: the rules of origin agreements, which has a common tariff heading levels to be applied, the alignment with the World Trade Organization (WTO) and Economic Partnership Agreement (EPA). The members of regional economic communities should decide among members of the Competition / Loyalty (Braude, 2008).
2. Summary of the first attempt at regional integration of East African Community
The proposed East African Community did not start with the current measures are considered in countries moving towards BURKT full economic integration. In the 1960s in Kenya, Uganda and Tanzania (KUT) has been formed to establish the first East African Community (EAC 1). Most focus on the history of CAD is often focused on the 1960s, however, the foundation community can be considered seriously as if they were established in 1922.
KUT countries had all the British territories, which have a certain many things in common which were considered fertile ground for the formation of an integrated market. Similar political institutions, judicial and educational systems of government management has given an institutional framework that allows the community to be founded. KUT was used for common services such as joint work. Until 1966, the three countries all use the same currency, the shilling (Mvungi, 2002).
Although there are a number of similarities between countries, significant differences can also be noted that later contributed to the abortion integration project. Kenya has attracted capital flows arrangements in relation to other countries in the region, leading to more and more industrialized (Mvungi, 2002). Different political ideologies have been generated by the founding fathers of the countries were diverging. For example, while the friction Line capitalist Kenya, Tanzania was targeted in the socialist system Julius Nyerere Ujamaa (Nyerere, 1967).
According to socialist ideology, the investment controlled economy of Tanzania, he saw the nationalization of major industries. On the other hand, the system promoted capitalist Kenyan Foreign / Western involvement in the process of economic development. Because of the general inefficiency faced by the government more involved in economic transactions, Tanzania has been a delay of economic growth. As shown in socialist states like Russia in the Republic of the United States Soviet (USSR) was the centralized control of the "obligations of the invisible hand" activities economic market forces leading to inefficient allocation and productivity.
Before independence in Africa Eastern Region and was operated as a common market, without the formalization of the structure. Presence of the colonial administration saw the posts and telecommunications, railways, ports, airways, customs and institutions of special education in research and higher education will be coordinated by any authority (Mwase, 1982).
Untangling the EAC has been presented a number of factors that existed before the formation of the union, and other events that have slipped below. domination of Kenya in East African common market owing to industrial and commercial imbalances between the three countries. Development of a manufacturing of a well-developed infrastructure in Kenya to attract more investment.
The geographic location of Kenya also worked in his favor, and it was well positioned to serve all of East Africa. Despite the rhetoric of "community" each country has tend to focus on protecting their own national interests. vi Tanzania socialist ideology to turn to Eastern Europe. Given the gap between capitalist and socialist schools of thought, the policy decided by the countries were intrinsically different diametrically opposite.
1971 coup of Idi Amin contributed a powerful blow to the EAC. The Tanzanian government does not recognize the government Amin, while Kenya has done. The paralysis of the system was driven by this impasse and could not make decisions about community (Mvungi, 2002). Apart from monetary policy, exchange controls and exchange restrictions conflicts were among some of the other issues that derail a train on CAD (Mwase, 1979).
An agreement concluded in 1964 (Kampala Agreement) which focused on the new industrial policy for the allocation industries to countries with deficits has not taken off as expected. This has been the lack of ratification of the agreement by the Kenya. Tanzania, unilaterally, "was formed to establish industries in competition with those already in Kenya and impose quotas against Kenya produces "(Mahinga, 1976).
Tanzania and Kenya were in disagreement and lack of ratification by Kenya became the proverbial "straw that broke the camel, because of the unequal distribution of benefits among the three partners (O'Connor, 1988). The loss of confidence between Member States led to the disappearance of CAD 1.
3. The If CAT 2: Economic Situation Member States
3.1 Structure of the Economy
The African countries have a number of similarities in the way economies are structured. As with most African countries, there is a predominance primary sector in agriculture and mining are the main part. Burundi, Uganda and the main export Rwanda's coffee, horticultural products from Kenya and Tanzania is snuff.
growth rate of GDP for countries CAE has always been quite high, fluctuating in the range of 3-7%. Because of the economic structure of these countries, fluctuations in commodity prices first global impact on the country's GDP. The advent of globalization has led to increased links between the economies of the region with the global village.
The coup in 2008/2009 experienced by different countries was the result of the scenario of economic recession world that led to the fall in demand for raw materials on world markets. Given the EAC countries have greater confidence in the market export slowdown on global markets took a big hit in the performance of economies.
Socio-economic
The socio-economic indicators for countries BURKT, 2008
Country
Literacy
Population
Urban population
Life expectancy
Burundi
65.9%
8.0 m
10.4%
50
Uganda
74.6%
31.7 m
13.0%
52
Rwanda
70.3%
9.7 m
18.3%
50
Kenya
86.5%
38.5 m
21.6%
54
Tanzania
72.6%
42.5 m
25.5%
55
Source: World Bank
Tanzania the most populous member states of the EAC. Burundi and Rwanda have a very low population compared to other partners. The urban population East African Community is low with most people living in rural areas. Literacy levels are relatively high in all OIC countries. Kenya is in pole position towards literacy. Despite recent troubles in Rwanda and Burundi, life expectancy in these countries is relatively high in line with other EAC countries.
Foreign Direct Investment
Investment flows FDI EAC has largely been going in Tanzania and Uganda. In Tanzania, the mining industry (with particular emphasis on gold mining) has accounted for the lot with tourism results. Uganda's recent debut in the oil sector has largely explain the increase FDI inflows into the country.
FDI inflows to Rwanda and Burundi have been very discreet because of the confidence Investor poor. Burundi in 2008 drew only 3.8 million dollars in FDI, while Rwanda attracted $ 103.4 million. Despite Rwanda Burundi figure above, the level of FDI is far from the other countries of the ACS.
FDI inflows to Kenya have been silenced for too at some point. factors that explain the low FDI include market maturity (ie, there is a potential growth in general, less), local companies expanding in the region rather than nationally, relations with donor countries and perceptions of levels Corruption high (Koigi, 2006). The big jump in foreign direct investment between 2006 and 2007 in Kenya reflects the influx of Telecom Acquisition French as a $ 390,000,000 51% stake in Kenya Telecom (Durchslag, 2008).
The economic downturn that hit the global economy have contributed to a decline in FDI in the EAC during the period 2009/2010. The volatility that has gripped Kenya after Presidential elections in 2008 contributed to a negative impact on investor sentiment towards the country as an investment destination.
A review of developments in the area is divided by GDP EAC member countries shows a relatively stable distribution. Rwanda, Uganda and Burundi have agriculture as the dominant sector. services sector is dominated by the Kenya tourism and finance. Although agriculture is the second dominant economic sector in Kenya, as in other EAC countries, employs over national labor force.
Level industrialization in the EAC is generally low. Although Kenya is the most industrialized country in the region, the industrial sector contributes less 20% of the GDP of the nation.
4. Creation of the African Community Eastern news (ABC 2)
The first experience of the African Community has the Architects Education and Culture 2 for a benchmark to work with developing the new structure. Following an ABC, concrete measures were taken between the principles origin of the first East African Community. Here is the procedure to two CAD how from the wealth of experience in the integration effort above.
CAT 2 property measures
Year
Description
1999
Education and Culture Treaty signed between Kenya, Uganda and Tanzania
2005
customs union created in November
2007
accession of Rwanda and Burundi Union
2009
Common Market of the protocol signed in November
2010
Market Common began operating on 1 July
2012
Target for monetary union
4,1 Customs Union
In 1999, the Treaty of the East African Community was signed between Kenya, Uganda and Tanzania. The Treaty describes the process followed in establishing the customs union. Integration processes in Africa have been observed follow the linear model where the movement within walking distance of the customs union, common market, common currency and eventually a political union. The model of market integration, linear pass through successive phases of the integration of goods, labor and markets capital and finally the monetary and financial integration (McCarthy, 2007).
The creation of the customs union was Kenya, Uganda and Tanzania to establish a common external tariff (CET) regime. TSC has enabled the rationalization of regional relationships with other economies. In parallel with the various members blocks posed a concern for the customs union, respect for rules of origin issues. To ensure the proper functioning of the Union, it is not necessary to harmonize the regional economic communities. cause inefficiencies Overlays in the implementation and coordination of policies due to duplication of efforts.
Although Rwanda and Burundi are still relatively unstable politically, joining the ABC should help stabilize their small economies. Access to resources of several member states are set up to help strengthen the countries development.
4.3 Protocol of the Common Market
The Common Market is a step in the process of integration into a customs union allows free movement of production factors (capital and labor) across national borders in the field of integration. The main objective of the Protocol on the EAC was "Broadening and deepening cooperation between the partner states in the social and economic benefit of the Partner States "(Common Market Protocol of 2009). Kenya Uganda, Tanzania, Burundi and Rwanda formally joined the Common Market July 1st, 2010.
As stated in the objective said protocol, the search for a common market transcends social and economic fields. To facilitate the free movement of labor, capital, investment, etc., a number of processes that the region has to be established. Issues such as the abolition of restrictions on movements of labor, the harmonization of labor policies, programs, legislation, social services, provision of social security benefits and establishing common standards and measures of association for workers and employers, the establishment of centers to promote employment and possible adoption a common policy of employment "must be addressed if the common market to function properly.
With the market Common had been launched and a number of controversial issues that have not yet been resolved. Three major issues are looking at Tanzania were opposed to the other EAC member states are in the ownership of land, permanent residence and travel documents. Other countries have adopted for nationals of other countries, land in their country and people that are considered permanent residents once they have been in the country for 5 years. Regarding the issue of travel documents, Tanzania insists people should use the passport while others are content to use identity documents.
Conclusion
Despite a number of challenges facing the EAC countries are to be applauded for achieving the common market-wide integration. Streamlining policies around work, capital flows, the role of trade unions, among other factors, is expected to ensure the smooth transition of the common market to monetary union.
The plan for the creation of monetary union by 2012 could be a bit too ambitious for Directors of Education and Culture. Instead of concentrate hard to want to meet this deadline, it is preferable for Member States to consolidate its achievements to date. Any area not yet strengthened to take the time to focus to ensure that when it comes time for a display of politics of monetary union, there will be a result the progress already made.
According to the EAC Monetary Committee (MAC), there are still a number of challenges facing central banks in the region that could act as an obstacle to a controversial 2012 launch of monetary union. Prolonged high interest rates, the budget deficit, high domestic debt and the relatively high levels of NPLs are some major challenges. (Kisambira, 2008)
The lessons of the integration process of East African Community should contribute significantly to economic communities regional Africa.
The EAC is expected to signal the likely direction of the aspirations of the continent to the United States of Africa. Although some political leaders could include the creation of a federation sooner rather than later, prudence requires the strengthening of regional groups before embarking on a merger at the whole continent countries.
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