Challenging Regionalism in Africa. What Alternative Strategy for African Economies and Markets? ()
1. Introduction
Economic integration is a model for development chosen by almost all countries in the world. It is applied according to the specific characteristics of each continent through regional organizations.
To date, the European Union is the most structured and integrated of the regional economic organizations, as evidenced by its long history, which stretches from the Treaty establishing the European Coal and Steel Community to the Treaty of Lisbon (December 13, 2007), via the Treaty establishing the European Economic Community and the Treaty establishing the Economic and Monetary Union.
In Asia, the model of economic integration crystallized with the creation of the Association of Southeast Asian Nations, which is one of the models of trans-institutional regionalism that aims to promote growth, development, and cooperation in the economic, social, cultural, scientific, and administrative fields, as well as stability and peace in the region. Initially, two factors explained this dynamic: the desire to contain communism expansion through economic and social development, on side; and the need to prevent the region from becoming a battleground in the context of the cold war, particularly in the context of Vietnam war in another.
In America, the North American Free Trade Agreement, signed in 1992, ratified and supplemented in 1993, and which came into force on January 1, 1994, was an instrument that triggered the materialization of the economic integration model. Its objective was to remove tariff and customs barriers within 15 years. This organization has achieved most of its initial economic and trade objectives. NAFTA has always had one foot in and one foot out. For some time now, it has been engaged in a process of diversifying its trade and foreign investment. With this shift, it is turning to emerging Asia rather than the Americas or old Europe.
In Africa, for decades, the issue of regional integration has been at the center of debates on the continent’s development. This development model aimed to bring together countries located in the same geographical area with a view to creating a large, homogeneous, and integrated market (Christian & Arès, 2016). The idea that African countries should move towards economic integration developed through the adoption of the Lagos Plan, the Abuja Treaty, the Omega Plan, NEPAD, and the treaty establishing the free trade area.
This article revisits the failure of Balassa’s economic integration model in Africa and focuses on examining the model of interconnection between African economies and markets, rightly presented as an alternative strategy. This failure can be explained by the inadequacy of the programs adopted and implemented to date by the African Union and various regional economic communities.
In view of the enormous challenges it faces, it is imperative for Africa to move from economic integration to the interconnection of its economies and markets. This would enable the continent to strengthen its global competitiveness, distribute its resources more evenly, and ensure more balanced and sustainable development for the countries in the region.
Economic integration and the interconnection of economies and markets are distinct but complementary concepts. They differ in terms of their scope, mechanisms, objectives, and impact on national and international economies. Unlike economic integration, the interconnection strategy involves global interdependence and aims to optimize global production, distribution, and consumption networks without going through a formal cooperation process that would lead to regionalism. It is facilitated by global technologies and networks that directly connect economic actors without the need for formal institutional structures. Its normative framework would be based on the African Union Charter, the founding texts of the RECs, and the domestic law of states adapted to African economic, social, and political realities.
2. Challenging Regional Integration in Africa
2.1. Review of Literature
Moussa Diakite argues that Africa must unite or perish. This has been the key message warning African governments of the dangers of blindly following the West, which mistakenly believes that such behavior, which is in fact tantamount to national resignation, is in its interests. For while dialogue between cultures, the meeting of civilizations, and freedom of exchange are necessary, should we not fear that African culture, which is more pluralistic than unitary, as it has been forged since independence after the forced assimilation of the colonial era, will ultimately fail in a mimicry that perpetuates pluralistic than unitary, as it has been forged since independence after the forced assimilation of the colonial era, will ultimately fail in a mimicry that perpetuates Western hegemony, whose economy dominates the African continent without challenge (Moussa, 1997). The author does not propose a strategy to overcome Africa’s development problems.
According to Yves Bourdet, regional integration has been experiencing a revival worldwide since the mid-1990s. This revival also concerns West African countries. The experiences of regional integration during the first wave of integration in the 1960s and 1970s produced mixed and often disappointing results in terms of creating trade and accelerating economic growth (Yves, 2005).
For him, this observation is particularly true for regional integration experiences between developing countries, especially in sub-Saharan Africa. The strength of this study lies in its assessment of the implementation of the economic integration model in West Africa, which has produced mixed results. However, the author did not address the influence of this result on Africa’s external trade in his study.
For his part, Bongeli YeikeloYa Ato demonstrates that Africa’s situation in terms of political, economic, and cultural integration is scandalously ridiculous. To remedy this situation, the author proposes that African countries build a large confederation of states in Asia, Africa, and Latin America, as only such confederations will be able to wrest the monopolies that give the dominant centers their power and develop their own scientific and technological capabilities, autonomous financial organizations, independent control of natural resources, and effective means of effective means of communication, and the necessary means of military deterrence (Bongeli, 2011). His study has the strength of offering African states possible solutions to the failure to implement the model of economic integration in Africa. However, the author did not take into account the impact of the socio-political and economic realities of African states.
For Mwayila Tshiyembe, yesterday as today, the challenge of regionalism and economic integration is the creation and distribution of wealth, underpinning peace through the market, according to liberal theory. Nevertheless, the practice of regionalism and economic integration is not self-evident. It poses enormous problems in terms of theory, standards, harmonization, industrial production, trade, institutions, regional public goods, development, etc., which are faced by actors attempting to adapt it to the historical context, with globalization as its epicenter today.
For Jonas Kibala Kuma, the problems afflicting Africa are likely to delay its regional integration process. In addition to non-compliance with macroeconomic convergence criteria, three factors underpin economic development, namely the existence of one-way trade in undifferentiated goods, low traffic creation, and the dominance of agglomeration effects over diffusion effects. He concludes that the membership of certain countries in more than one regional grouping; roadblocks, inadequate customs clearance procedures, delays at border posts, corruption, etc.; inadequate payment methods and means; narrow financial and capital markets; embryonic insurance systems; failure to comply with established laws (inability to implement trade protocols: this is the case with the AMU); Political tensions and armed conflicts between members, etc., are all factors that delay the regional integration process in several African countries (Jonas, 2013). This study has the merit of identifying the major causes of the failure of the economic integration model in Africa. However, it does not analyze the impact of this failure on the process of economic globalization that African states must engage in.
According to Togba Zogbelemou, developments on the issue of integration in Africa really began in the 1970s with the first signs of the welfare state running out of steam, a behemoth that public authorities were struggling to manage, and the failure of the economic policy that led to the over-indebtedness of African states, a policy that consisted of believing that it was enough to inject billions of dollars into development programs to ensure their success (Togba, 2014). However, his study did not criticize the role of regional economic communities in the failure of economic integration in Africa. His study has the merit of pointing out that regional economic communities are an obstacle to the effectiveness of continental economic integration among African states. On the other hand, it has the weakness of not proposing a new strategy to overcome the failure of the objectives assigned by the RECs.
Christian Deblock emphasizes that integration has become heavily polarized around the United States, with economies becoming increasingly dependent on subsidiaries, value chains gravitating towards American parent companies, and trade transiting through the United States. The author points out that since the signing of the GATT on October 30, 1947, the multilateral trading system has been geared towards opening up markets. This is based on two main principles: reciprocity and non-discrimination (Christian, 2014). Procedurally, it can be described as liberal trade policy, in the sense that export promotion is the rule and protection is the exception. However, his study did not assess the level of economic integration in Africa.
Augustin Tchameni points out that the current divergence of African regional systems distorts the agreed approach to regional integration (Augustin, 2017). Article 6 of the text provides for the creation of Regional Economic Communities (RECs) as a means of continental integration. The proliferation of other subregional organizations and the implementation of similar programs and activities in the economic sphere tend to compromise the achievement of the planned integration.
Cécile Bastidon notes that attempts at integration in Africa are largely inspired by European integration (Cécile et al., 2020). They generally aim for full economic union, with the exception of the UDAA and the UMOA, which are sticking to a customs union, and COMESA, which has gone as far as a common market. However, they have not led to any real economic growth.
Abdou Diouf notes that the marginalization of the African continent in international economic relations gave rise to new approaches in the 1990s, such as the creation of the African Union, the development of subregional organizations, NEPAD, and various “bottom-up” integration processes (Abdou, 2006). As a result, the author believes that there needs to be a shift in awareness based on the formation of regional blocs capable of better addressing the challenges of globalization. His study has the merit of criticizing the African continent’s place in economic globalization. However, the author did not analyze the causes of this marginalization.
For Daniel Bach, integration is not a given but must be built to serve as a support for “large federal-type state entities” (Daniel, 2024). With the framework clarified, the internal requirements it entails are briefly discussed in a second part: the liberalism advocated at the inter-state level has too often clashed with totalitarian policies at the sub-state level. Federalism by decree has also tended to prevail at the expense of approaches that are constructed and negotiated in stages. The future of integration lies, the author concludes in the last section of the book, in a gradual approach based on “cores of sovereign states”.
From the above, the studies by the authors examined above indicate that the failure of economic integration in Africa is caused by political instability, persistent inter-state armed conflicts, overlapping RECs, low commodity production, industrial deficits, and infrastructure deficits, and has the following consequences: inefficiency of the free trade area, and ineffectiveness of the customs union, common market, and economic union. In fact, it has become imperative to put forward an alternative strategy. In the meantime, we define the operational concepts of this study.
2.2. Defining Key Concepts
Economic integration
In the literature, the concept of integration often refers to the economic aspect. However, it should be borne in mind that integration alone can cover several areas of public policy, including the economy, regional security, human rights, education, health, research and technology, as well as the environment and natural resource management, to name but a few.
Indeed, the definition of the concept of integration differs depending on the country, the period, and the author. This multiplicity of definitions creates a certain amount of confusion and highlights the multidimensional nature of the concept.
Figuière and Guillot define economic integration as a combination of regionalism and regionalization based exclusively on the institutionalization of interstate relations between geographically close nations (Saidouba, 2020).
According to Mwayila Tshiyembe, the concept of integration refers to any form of institutional arrangement that aims to liberalize or facilitate trade at a level other than multilateral (Mwayila, 2012). According to him, there are three degrees of economic integration, namely: border integration (coordination aimed at establishing and applying common rules governing relations between nations or regulating flows); integration of practices within each of the partner nations or the establishment of common rules; and regional governance (coordination giving a regional institution supranational powers).
Bob Kabamba proposes defining economic integration in Africa as the creation, within a specific area (relevant political area), of a community of interests and practices that are sufficiently strong and widespread among the populations involved in the process to guarantee the fulfillment of expectations over the long term (Bob, 2011).
According to Soussi Fatima Zohra, economic integration refers to the development of economic, social, and political relationships that create growing interdependence between states. It takes place within a specific geopolitical space. In this context, economic integration includes the liberalization of the movement of goods and factors of production in order to gradually eliminate economic borders between two or more countries and form an internal market (Soussi, 2012).
Dario Batistella considers economic integration to be the process by which the regularity and intensity of interactions between certain states and between certain societies increase, allowing for the formation of a security community, greater economic interdependence, and a shared identity that promotes, within a particular geographical area, the development of institutionalized collective action that can lead to political unification (Dario et al., 2012). For him, economic integration can be defined by the following three criteria: geographical proximity, regularity and intensity of interactions, and a shared perception that economic integration exists.
For our part, economic integration refers to the process expressed by the willingness of states to resolve problems relating to the management of economic resources that are unevenly distributed among them. The actors involved in this process are first and foremost states, followed by international organizations, non-governmental organizations, and individuals who are interdependent within a geographical area with the aim of achieving economic development. This is something that is difficult to achieve in Africa.
Interconnection of African economies and markets
First, it should be noted that interconnection derives from the word connection with the prefix inter. In fact, the term connection means to link together. According to Jean Varlet, a connection consists of establishing a link or connection between two points or two axes of the same transport network. It involves at least two networks, two operations, and two different territories that will combine, interpenetrate, and possibly merge (Ciupa, 1996).
The concept of interconnection is much more commonly used in the fields of electrical energy and information technology. It refers to the act of connecting or establishing a link between two or more computer networks or electrical energy networks.
In reality, interconnection consists of bringing together heterogeneous networks on variable registers that may be technical, organizational, or institutional. Beyond connecting infrastructures, interconnection leads to an intertwining of operating modes that potentially calls into question the unity of each network concerned. The initial purpose of interconnection is to eliminate the load break between two heterogeneous networks, to ensure the continuity of infrastructures that initially belong to several institutions.
Starting with various networks that are more or less well connected, the aim is to establish interconnection through technical, organizational, economic, and other arrangements.
However, this concept of interconnection now refers to the link or relationship between two or more things, two or more phenomena (political, economic, social, cultural, etc.). In this case, it refers to the interconnection of African economies and markets, which is presented as a new model of economic integration between states.
Indeed, the model we refer to as interconnection is based in particular on the signing of economic agreements between states, the content of which has an impact on trade.
3. Strategy for Interconnecting African Economies and Markets
To date, economic interconnection has led to an increase in regional trade agreements signed between geographically close partner countries with common economic interests (NAFTA, MERCOSUR, the European single market, among others) around the world. The picture that emerges today is one of strong interconnection between manufacturing sectors within regional blocs structured around a leading country (Germany, China, the United States), coupled with close interdependence of production processes between these blocs, particularly between the United States on the one hand and Germany and China on the other (David, 2015).
In Africa, the strategy of interconnecting African economies and markets, based on borders, resources, territories, populations, and local partners, is intended as a response to the unsuitability of Balasa’s economic integration model to the specificities of African economies and markets, based on the dynamics of borders, territories, resources, local economic operators, and new information and telecommunications technologies (Mwayila, 2014).
3.1. Theoretical Basis
It should be noted that the strategy for interconnecting African economies and markets is based on the model of interconnecting Internet users. This strategy involves considerations of technical and economic efficiency, but also strategic considerations. Based on these considerations, this study will formulate the theoretical basis justifying the factors that can increase or reduce the incentives for African states to interconnect their economies and markets.
Thanks to new information and communication technologies, the interconnection strategy will not only extend to services but will also transform business models, whether through e-commerce or value chains. In addition to the increasingly cross-border nature of activities, the new interconnection model requires much less local investment but more supplies; it mobilizes small businesses, but does not push them into the arms of large local suppliers.
The strategy of interconnecting economies and markets presents a radically new scenario that follows neither a logic of spatial integration nor a logic of cooperative integration, but rather a logic of network integration.
According to Mathieu Ares, this strategy is particularly characterized by the conclusion of third-generation agreements. These agreements have the following in common:
First, they include provisions tailored to this model, such as e-commerce, small and medium-sized enterprises, trade facilitation, more flexible and consistent rules of origin, telecommunications, etc.
Second, they focus on rules, whether technical standards, quality certification, skills recognition, or the regulation and supervision of activities, etc.
Furthermore, such agreements can only be effective when they are plurilateral agreements. Nor do the new provisions simply overlap with existing ones: they push them upwards, with market access and the protection of economic rights needing to be as broad as possible, just as they push negotiators to introduce greater consistency between existing agreements, particularly with regard to rules of origin (Matthieu, Eric, & Christian, 2016).
In addition to the principles of reciprocity and protection of business rights, the interconnection strategy adds a third principle: recognition. Standards cannot be exchanged, nor do they confer rights. They require the definition, harmonization, and recognition of a common standard, a convergence standard, or, more modestly, each party’s standards. In other words, it is not just a matter of facilitating cross-border trade and making it as smooth as possible. It is also about upgrading regulatory systems, which are often very different, and making them interoperable.
To this end, technical and economic efficiency considerations must be weighed against strategic considerations (ad hoc interconnection, interconnection as a territorial project, etc.) to grasp the theoretical element.
3.2. Policies to Be Implemented to Interconnect African Economies and Markets
The implementation of the interconnection strategy requires commercial, technical, and operational provisions to facilitate interconnection between states and other economic actors, such as multinational companies, NGOs, etc. For these arrangements to succeed, states must agree on certain rules that take into account the requirements of interconnecting the governments of different states, infrastructure (road, maritime, rail, and air), actors (public and private), the development of the industrial and private sectors, and legal interconnection.
By way of illustration, the new road interconnection design must be based on an approach that not only promotes greater openness to trade and investment, enabling economies of scale and fostering competition, but also encourages and commits to the implementation of joint projects for the exploitation of natural resources and the production of goods, the interconnection of African countries through efficient infrastructure services, and the promotion of sustainable development. The implementation of joint projects for the exploitation of natural resources and the production of goods, and the interconnection of African countries through efficient infrastructure services, but also the encouragement and involvement of the private sector, which must become the main driver of regional economic growth, export-oriented industrialization, and the development of common transport and telecommunications infrastructure.
The new road interconnection strategy refers to the construction of the Belt and Road. Neighboring countries must ensure the consistency of their plans and standards for road infrastructure construction, jointly promote the construction of major international roads, and gradually establish African road infrastructure networks covering the various sub-regions of Africa and connecting them to other continents. This is the case, for example, with China’s “One Belt, One Road” policy (Ming, 2019).
3.3. Normative Basis for the Strategy to Interconnect African Economies and Markets
The legal texts ratified by African states to harmonize the business climate as part of the implementation of the economic integration model have limitations that the new strategy to interconnect African economies and markets will have to address. The free movement of goods and people established in various community organizations around the world contributes to the implementation of a policy of social, economic, and cultural openness. This initiative quickly became necessary for corporate restructuring.
In order to respond to increased competition and competitiveness, companies needed a legal framework to enable them to penetrate new foreign markets. This is how the OHADA legislator established the merger regime.
However, the scope of this advance is limited by the existence of practical obstacles related to merger control and merger taxation. It is on this point that this organization lags behind the European Union, with its Competition Commission, its 1990 directive on the taxation of mergers and similar transactions, and, most recently, its 10th directive on cross-border mergers of limited liability companies of November 2005.
In concrete terms, while OHADA legal standards have the merit of harmonizing business in Africa, they nevertheless face enormous difficulties in doing so. These difficulties relate to the conflict between these standards and the domestic law of states, the low level of acceptance of these standards by economic actors and domestic courts, and the absence of an African commercial court responsible for settling commercial disputes between states and other actors.
The standards governing economic integration in Africa have given way to the new strategy of interconnecting African economies and markets. This is why, for its effective implementation, this new strategy must be framed by new standards relating to the interconnection of the governments of different states, the interconnection of local authorities, and the interconnection of non-state actors.
4. Concluding Remarks
This article, which is now coming to an end, has examined the process of economic integration according to Bela Balassa’s model of interconnection between African economies and markets.
The focus of this study has been, on the one hand, criticism of Bela Balassa’s theory of economic integration and its unsuitability for the specific characteristics of Africa, and, on the other hand, its replacement by interconnection as an alternative theory for the integration of African economies and markets, based on the dynamics of borders, territories, resources, local actors, and infrastructure and telecommunications technologies, on the other hand.
Africa today has many assets to succeed in its manufacturing transformation. It has close access to raw materials, particularly minerals, but also to agricultural, forestry, and fishery products. To this end, several mechanisms aimed at uniting African economies have emerged, the most illustrative of which are the regional economic communities (RECs). The aim of these communities was to move Africa towards gradual economic integration through their eventual merger and, following a certain level of integration in their respective areas, with the goal of establishing an African Economic Community (AEC) as provided for in the 1991 Abuja Treaty.
In addition, African states have adopted several other economic integration projects through the Lagos Plan, the Abuja Treaty, the Omega Plan, NEPAD, and the free trade area. The Lagos Plan focused on integration through African self-reliance, while the Abuja Treaty enshrined the Balkanization of Africa by grouping African states into subregional organizations.
However, as these strategies did not enable Africa to develop and integrate economically, the African Union adopted three other programs to achieve this goal. First, it adopted the Omega Plan and NEPAD, which focused on Africa’s development through partnership and cooperation with other foreign states. Second, to facilitate the movement of goods and services, a strategy to open up free trade areas was also adopted, but unfortunately, this did not enable Africa to integrate economically either.
Through their membership in regional economic communities, African countries have signed up to mechanisms and treaties relating to trade liberalization, many of which overlap and some of which are even contradictory.
To date, there are several regional economic communities in Africa. Of the fifty-four African countries, twenty-seven are members of two regional groupings, eighteen belong to three groupings, and one country is a member of four groupings. Finally, only eight countries are members of a single grouping. This situation prevents the African continent from integrating economically and opening up to globalization.
Despite their multiplicity, these communities have not integrated their markets, nor have they established genuine free trade areas, let alone customs unions, common markets, and monetary unions. Subregional markets have not been able to unify quickly, and investments have not experienced the growth achieved by large markets and economies of scale.
As a result, the economic integration model adopted by Africa has had a negative impact on the creation and expansion of trade between African countries and between African countries and the rest of the world.
That is why we propose a strategy of interconnecting African economies and markets. Air, rail, and road interconnectivity can also boost the tourism sector by facilitating travel within the continent. This creates opportunities for African countries to develop their tourism sector, thereby generating revenue and jobs.
Improving transport infrastructure, particularly in rural areas, would reduce the isolation of these regions. This would enable better circulation of resources, goods, and services, while improving access to education, health, and other essential services, which is fundamental to inclusive development.
The standards governing economic integration in Africa have given way to the new strategy of interconnecting African economies and markets. This is why, for its effective implementation, this new strategy must be framed by new standards relating to the interconnection of the governments of different states, the interconnection of local authorities, and the interconnection of non-state actors. These results, before being confirmed, must first be discussed. To this end, the discussion of the results consists of comparing them with the methodological and theoretical frameworks on the one hand, and on the other hand, situating their scope and limitations.