By William Dhlamini
JOHANNESBURG November 14 (IPS) - Larger markets are essential if African countries are to restructure their heavily agriculture dependent economies, attract investment and make their voices heard in global forums such as the World Trade Organisation, says Kingsley (K.Y.) Amoako, the executive secretary of the Economic Commission for Africa.
However, Amoako warns against "setting up myriad regional organisations, with criss-crossing membership and obligations, but all with a weak institutional and financial base, not to mention little trade flowing between them."
In addition, says the ECA chief, the various regional trade organisations established on the continent lately should be rationalised.
"For Africa, the key to industrial development is regional integration," says Amoako, who was a guest last week of the University of SA and the Africa Institute in Pretoria.
"The minute-size of African economies, some with GDPs no larger than the world's bigger conglomerates, makes no sense," says Amoako.
The leaders of nine of the 21-member Common Market for Eastern & Southern Africa (Comesa) signed a free trade agreement in Lusaka last week which, they hope, will be the first step towards greater co-operation and regional integration, including full monetary union by 2025.
The states that signed the Comesa treaty was: Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe. The 14-member Southern African Development Community (Sadc), of which SA is a member, launched a free trade area on Sep 1.
Before, the Sadc precursor, the Southern African Customs Union (Sacu) consisting of South Africa and its four historically and geographically closest neighbours were the first free trade area of its kind on the continent.
There are countries in the region that is members of Comesa and Sadc at the same time.
For example, Malawi, Zambia, Zimbabwe, Mauritius signed the Comesa treaty, but they also before put their names behind the Sadc free trade agreement.
Thus, leaving doubts about how the Comesa free trade protocol will, in practice, be implemented.
Amoako says all these efforts towards regional integration is welcome, if they are co-ordinated and lead to the desired end result of increasing the size of domestic markets through a freer flow of trade.
"Unfortunately, there is evidence of overlap (in membership) and under lap," says Amoako. He says studies by the African Development Bank suggest that the biggest hindrance to trade in Africa is not so much tariff barriers, as it is non-tariff barriers, such as transport, infrastructure and bureaucratic bottlenecks.
A report released this week in SA by BusinessMap, an investment strategy company agrees with the sentiments. It says, for example, high transport costs are a bigger barrier for African exporters to the US than that country's remaining import tariffs.
"So, in addition to removing tariff barriers, which itself is in its infancy, we need to find ways around non-tariff barriers and rationalise the various structures we have created," says Amoako.
The ECA chief says the continent's leaders must adopt a clear strategy to ensure "that Africa does not become an endangered species in this new world order."
Amoako says the pace, sequencing and phasing of trade liberation by African countries is going to be a key aspect of the continent's transformation.
He points to both Brazil in Argentina who implemented economic reforms in two stages: first, commercial policies geared to export liberalisation and promotion, and second, the gradual reduction of tariffs over two years.
Alternatively, he says, there is the South East Asian model in which export promotion and impot substitution policies were pursued in a complementary manner. "African countries must find models that work vest for them," says Amoako.
The ECA chief says in the past 17 years, after the World Bank/IMF adjustment programmes were started on the continent, Africans have loss such faith in their governments, that many Africans prefer immediate consumption, rather than saving their money.
He sees the new Union of Africa as the most likely organisation that could bring political integration to the continent.
Comesa consists of: Angola, Burundi, Comores, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, the Seychelles, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
Sadc consists of: South Africa, Zimbabwe, Botswana, Lesotho, Namibia, Swaziland, Tanzania, Zambia, Mozambique, Mauritius, Malawi, the Democratic Republic of Congo, Angola and the Seychelles.
Three of Sadc's 14-member states - the DRC, Angola and the Seychelles are not party to the Sadc FTA, but indicated they may join later.:
