Deepening African Economic Integration

The African Union (AU) is commemorating African Integration Day in a two-day event in Lusaka, Zambia between 6 and 8 July 2022 exploring the ecommerce potential of the Single African Market. On 8 July 2022 the Boma of Africa will make its third return since 2019. The Boma features a three-part exposition of major pan-African initiatives together with a global symposium to take stock of progress towards the AU’s Agenda 2063.

The theme of this year’s African Integration Day, which being commemorated by the African Union this week, is ‘Deepening African Economic Integration in the Era of De-Globalisation’. It falls against the background of Africa’s economic recovery post-COVID and the far-reaching implications of the Russia-Ukraine conflict. The adverse effects of both events on the African continent have further underscored the need to have a more integrated and interdependent continent that is resilient in the face of global economic shocks.

The importance of African economic integration was reiterated in the just concluded 54th session of the Conference of African Ministers of Finance, Planning and Economic Development which was convened by the United Nations Economic Commission for Africa on 12 May 2022 in Dakar, Senegal. During the conference, the Ministers urged African states to increase intra-African trade to absorb the economic shocks caused by the global increase in commodity prices.

African economies will need to capitalise on the existing integration initiatives to foster economic recovery and transformation. Key among these initiatives is the African Continental Free Trade Area (AfCFTA) which is now in its operational phase. As at May 2022, 43 countries out of the 54 signatories in Africa have deposited their instruments of ratification with the depository chair of the African Union Commission in favour of the AfCFTA. Similarly, the Regional Economic Communities (RECs) on the continent have been, and will continue to be, instrumental in the economic integration efforts on the continent. Their role is recognised in the AfCFTA Agreement where the RECs are considered building blocks for the establishment of the AfCFTA.

To date, the integration initiatives have shown positive progress towards economic integration. The 2021 African Integration Report, which focuses on the status of regional integration on the continent, gave an overall assessment score of 0.62 on a scale of 0 to 1 for the integration process within the continent. The level of integration varied among the RECs with the Economic Community of West African States emerging as the most integrated REC with a score of 0.74.

Overall AMRII Scores by REC Source: AUC, 2021

Overall, economic integration in Africa is pivotal to the economic recovery of African states which have historically been susceptible to global economic shocks due to pronounced interdependence with third-party states and low intra-African trade. Moving forward, the ongoing integration initiatives are poised to promote the economic development of African states.

Trade-Related Developments for the First Half of 2022
In commemoration of African Integration Day, we have prepared a compilation of published pieces that have covered some of the most significant trade-related developments in Africa this year:

1. Uganda adopts Kiswahili as EAC official language as a means of deepening and widening integration. Click here to read the full article.
2. The African Ministers of Trade have agreed to allow the trading of some 850 products to commence under the Rules of Origin Protocol of the AfCFTA. Click here to read the full article.
3. One year of free trading in Africa calls for celebration despite teething problems. Click here to read the full article.
4. African countries would benefit from expanding their participation in international trade and global value chains to transform on a large scale. Click here to read the full article.
5. Milestones achieved in Africa on integration on the continent. Click here to read the full article.
6. Lack of regional integration, culture frustrating ECOWAS cross-border trade. Click here to read the full article.
7. African Union heading fast towards integration despite challenges. Click here to read the full article.
8. The Democratic Republic of the Congo formally joins the EAC after signing of the Treaty of Accession to the Community. Click here to read the full article.
9. Report: Growing Intra-African Trade through Digital Transformation of Border and Customs Services. Click here to download the full article.
10. March. Click here to read the full article.
11. The Russia-Ukraine conflict adversely impacts sustainable development and economic recovery in Africa post-COVID 19. Click here to read the full article.
12. 7 ways to accelerate implementation of the AfCFTA. Click here to read the full article.
13. Zambia to renegotiate the AfCFTA Agreement. Click here to read the full article.
14. Kenya launches the Nairobi International Financial Centre (NIFC). Click here to read the full article.
15. Use trade to cushion yourselves, AfCFTA tells African nations. Click here to read full article.
16. Fixing the Pan-African Payment System for start-ups. Click here to read full article.

Should you have any questions about the information in this legal alert or about our international trade law practice, please do not hesitate to contact Daniel Ngumy or Luisa Cetina.

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Contributors

1. Jade Makory –  Associate
2. Kelly Nyaga – Trainee lawyer
3. Joanna Kahumbu – Trainee lawyer
4. Mdathir Issa Timamy – Trainee lawyer
5. Larry Chula – Intern