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Regional Integration has been a favored concept on the African Continent since its first appearance in the early 1960s. Today, there are more regional partnerships in Africa than in any other continent, and most African countries are members of multiple regional initiatives. The Organization of African Unity (OAU) was the product of the African vision of continental integration and from its conception through to its present existence as the African Union (AU) it has been a significant force in the movement towards a Pan-African political and economic union.

African Regional Partnerships

African Regional Partnerships

Regional partnerships in Africa occurred in 2 major waves; the first in the mid-1970s through the early 1980s and the second during the first half of the 1990s. Both waves were the direct product of a combination of national positions and initiatives in African countries, and developments around the world. Post-independence, African nations earnestly looking for ways to join forces and grow, entered into the first few regional integration agreements, which were also in a way the result of the European Community’s successful enlargement in the 1970’s when the UK, Denmark and Ireland joined up. The second wave was more about revamping and revitalizing existing regional bodies rather than creating new ones. It also occurred around the same time as the creation of the North American Free Trade Agreement (NAFTA) and the consolidation of the EU with its single market.

Regional Integration Agreement Date of Inception Country Members
SACU – Southern African Customs Union 1970 Botswana, Lesotho, Namibia, Swaziland, South Africa
ECOWAS – Economic Community Of West African States 1975 Benin, Liberia, Burkina Faso, Mali, Cabo Verde, Niger, Cote D’Ivoire, Gambia, Senegal, Ghana, Nigeria, Guinee, Guinee Bissau, Sierra Leone, Togo.
ECCAS- Economic  Community of Central African States 1983 Angola, Burundi, Cameroon, Central African Rep., Chad, Congo-Republic of, DR Congo, Eq. Guinea, Gabon, Rwanda, Sao Tome & Principe
SADCSouthern African Development Community 1992 Angola, Botswana, Congo DR, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe.
UEMOA – West African Economic and Monetary Union 1994 Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
CEMAC – Communauté Economique et Monétaire d’Afrique Centrale 1994 Cameroon, Central Afrian Rep, Chad, Eq. Guinea, Gabon, Congo
COMESA – Common Market for Eastern & Southern Africa 1994 Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
EAC – East African Community 1999 Kenya, Tanzania, Uganda

Now, while regional economic integration cannot be as clearly categorized as an agricultural development paradigm as some of the other topics we have discussed, it did have significant impact on the growth of the agricultural sector in Africa; and here’s how.

Basic Human Rights as an agricultural development phenomenon did not occur quite on its own. The 1970’s in African development was also a time when national policies began to place a great deal of emphasis on industrialization. This push for made-at-home products in itself came about as a result of a desire to implement import-substitution strategies for a limited range of consumer goods such as beer, matches, and textiles. This move towards import-substitution was also highly predicated on existing regional market sharing agreements.

Africa in World Trade - IMF

Africa in World Trade – IMF

Regional government interest in import-substitution peaked once annual growth rates took a dive from a World War II average of 8 percent per year to a 1973 place of 2 percent per year following the oil crisis that occurred during that period. African countries looking for ways to meet the global economic challenges, took up regional integration by implementing common external tariff protections. Focus shifted from agricultural production, and governments became more interested in strategy that would enable them to produce goods at home. Those governments that had made a killing during the cash crop and petro dollar heyday were able to access easy financing for urban industrial investments, further cementing the demise of national agro-agendas.

How did all this impact agricultural development?

In 2 major ways. When a country or region either in response to global/regional/national financial crisis, or for reasons such as some of the others above, implement certain types of policy measures designed to promote industrialization, one of the effects of such policies can be the appreciation of real exchange rate.

What does this mean? Exchange rates in simple terms can be defined as the amount of foreign currency that can be purchased with a single unit of domestic currency, or the amount of domestic currency it takes to buy a single unit of foreign currency. I.e. how many Ghana Cedis (GHC) can I buy with $1 or how many U.S. Dollars (USD) can I buy with 1GH₵. Exchange rates allow us to denominate the cost or price of a good or service in a common currency.

Now if the value of the GHC were to appreciate, relative to the dollar, it means that the cedi has become more expensive and can now be exchanged for a larger amount of dollars. I.e. 1GH₵/$1 ! 0.90GHC/$1 means that the cedi has appreciated relative to the dollar and the cedi has now become more valuable. This also means that the dollar has depreciated relative to the cedi and is now less valuable.

Most important for our purposes, real exchange rate appreciation such as I have described above usually results in a decrease in the price of imports and an increase in the price of exports. I.e following the appreciation of the cedi, it becomes cheaper for Ghana to buy stuff from other countries and it also becomes more expensive for other countries to buy stuff from Ghana.

This is exactly what happened following the regional push for industrialization and common external tariff protection. Appreciation of the real exchange rates in the region, discouraged outside merchants from purchasing from African countries, which had the effect of discouraging export crop production.

This was one effect of regional integration on agriculture. Regional integration also impacted the demand for food imports. Overvalued exchange rates combined with rapidly expanding cities caused an increase in food imports in urban areas. This had a ripple effect across food markets, and before very long the prices of local, non-tradable staples (roots, tubers, and local grains) began to rise as well in tandem with imported rice and wheat prices.

This was when people began to sit up and take notice. Food availability and affordability began to become a major concern, and by the time drought and famine visited the Sahel and Ethiopia in 1974, and world rice prices reached its uppermost boundary following the oil shock in 1973, local food prices were through the roof and governments began to fear for African domestic food supply.

What happened next was a scramble for solutions. Policy responses focused on boosting food production were implemented and parastatal marketing agencies were created to ensure that the exploding cities were fed. Cash crop-era agricultural researchers maligned for their lack of focus on food crop production began to harp on the subject of extension for both traditional non-tradable food commodities and rice. Investment in dams for irrigated rice production in Africa became the “thing to do” and food became central to the Basic Human Needs dialogue that was also raging during this period. Food was classified as the most “basic” of needs. The smallholder farmer was king and “food production” strategy became the platform for many a politician, both true and charlatan.

And so while Regional Integration in and of itself was not an agricultural development paradigm, its establishment set in motion a chain of events that moved the agricultural development agenda forward, and secured the subject firmly in the annals of African agricultural development discourse.

Up Next: Now Enter The Big Boys! The SAP Era & Other Stories.

Sources:

FAO: Regional Integration in Africa (http://www.fao.org/docrep/004/y4793e/y4793e0a.htm); Dinka, T, Kennes, W.1 2007. Africa’s Regional Integration Arrangements: History and Challenges (ECDPM Discussion Paper 74). Maastricht.; University of Michigan: Import substitution as economic development (http://www.umich.edu/~econdev/importsub/); IFAD – Food price hikes and food security (http://www.ifad.org/operations/food/); Oyejide (1986) The Effects of Trade and Exchange Rate Policies on Agriculture in Nigeria. IFPRI Research Report 55. Washington, D.C. (http://www.ifpri.org/sites/default/files/pubs/pubs/abstract/55/rr55.pdf)

 

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