Can Regional Integration Help Africa Realize Its Economic Potential?

As Africa emerged from the colonial period, leaders recognized that regional integration would be essential to its development. The 1980 “Lagos Plan of Action” imagined an Africa divided into five regional economies. In 1991, the Abuja Treaty proposed eight “regional economic communities,” designed to eventually integrate into a single African Economic Community; by 2028, this community would bring to the continent a common currency, central bank, and parliament.

The deadlines set by the Abuja Treaty have slipped, Amadou Sy of the Brookings Intuition told a U.S. Congress committee in 2014. The implementation of a single currency across Africa is unlikely, and half of the regional economic communities are falling behind targets for convergence, including free movement of capital and goods, unification of currencies, and labor mobility.

But regional integration nonetheless remains key to narrowing the gap between the continent’s promise and its reality, Ibrahim Mayaki, former prime minister of Niger and now head of the New Partnership for Africa's Development, said in an interview with Yale Insights. Policymakers must “understand that the optimal solution to our national programs is not at the national level, but at the regional level,” he said. Whether looking at issues related to energy generation, healthcare, transportation, or education, successful efforts must focus on “key regional cross-border projects” rather than national-level projects.

According to the World Economic Forum, the potential gains from increased regional integration in Africa are substantial: almost half of Africa’s 54 countries have a population of less than 10 million, and more than a third are landlocked, making it the most fragmented continent in the world. “Regional integration,” writes WEF economist Caroline Ko, “can help Africa build regional value chains, and thereby tap into global value chains.”

Accordingly, the New Partnership for Africa's Development, an agency of the African Union created in 2002, tackles projects on a regional level. In East Africa, for example, Mayaki describes the importance of regulatory and industrial infrastructure to support a pharmaceutical industry that more efficiently and autonomously manages the treatment of AIDS. (Africa currently imports about 70 percent of its pharmaceuticals.) In West Africa, on the other hand, Mayaki said, “we prioritize climate change adaptation because issues of climate change in the Sahel are quite important.” And in South Africa, where agribusiness is an economic pillar, the highly contentious issue of land use takes priority.

Mayaki also notes that economic development in Africa is contingent on peace and security. Half of Africa's countries are ruled by authoritarian regimes or nominal democracies. Many countries are mired in civil conflict and a 2015 survey of companies around the world identified political instability as the biggest obstacle to business in Africa. One potential tool Mayaki pointed to is an early warning system that targets rising conflicts “in order to have a prompt reaction to the problems that are emerging.”

But this focus cannot eclipse the bigger picture of regional development. As a Brookings report put it, though addressing flashpoints of violence is important in the short-term, “increasing intra-African trade, building an African consumer base, and networking African interdependence may offer great long-term promise.”

Simply put, “the global configuration of the world economy today does not allow small countries to [be] competitive,” said Mayaki.