Best Practices in Regional Integration in Africa 8 th Session of the Committee on Trade, Regional Cooperation and Integration February 2013 Addis Ababa, Ethiopia George M. Mugabe UNECA-RITD

 Regional integration: a key strategy for advancing Africa’s socio-economic endeavors.  There is increased level of political will and commitment to establishing the AEC  Bottlenecks still hamper progress towards realizing the AEC Introduction

Any notable progress? Some best practices in regional integration in RECs are making the difference worth noting Notable progress in RECs where some best practices have been put in place

 Elimination of tariffs  Under COMESA FTA, participating countries are now a zero tariff zone  85% of the total regional trade is from within the FTA  EAC member States are a duty- and quota-free trade regime (0% Tariff) since 2010  Trade has strengthened to over $ 2 billion since then Trade and Market Integration  Total exports within the EAC region are now running a close second to total EAC exports to the euro area (Trademark Southern Africa) Values in US $ Millions UNCTAD, 2011

 Elimination of NTBs  COMESA, EAC and SADC are implementing an “ORM” Trade and Market Integration  Rwanda now has zero checkpoints from Rusumo border to Kigali Some Best Examples Any Progress Made?

 Rules of Origin Certificates  COMESA is using a regional Rules of Origin (RoO) certificate.  It entitles cross-border traders to preferential trade under FTA.  Harmonized formulae for RoO. Rules of Origin

 The Chirundu One Stop Border Post (OSBP)  Savings in time values as high as US $ 600,000/day  Clearing time has reduced from 3 days, to 6 hours and 1 day maximum. Trade Facilitation Measures More Examples?

 COMESA CD is used as standardized document for customs transit traffic control.  The document caters for imports, exports, transit and warehousing  It said to have replaced on average 32 documents in some member States Trade Facilitation Measures  Simplification of documentation at customs check points: Cutting down Red Tape

 Relaxation of visa requirements  COMESA is granting a 90- day visa upon arrival to all FTA members.  The same is true within ECOWAS. Free Movement of People Visa requirements are stringent in Africa  Rwanda, as of January 1, 2013, is issuing visa on arrival for all African nationals.

 Travelling regionally and internationally is easy with ECOWAS regional Passport.  Expected to replace the national passports used by other member States.  CEMAC is also using a regional passport “CEMAC Passport” Free Movement of People Use of Regional Passports

 Under the principle of reciprocity in AMU, Mauritania guarantees;  Freedom of establishment and capital investment,  Freedom to transfer foreign capital,  The ability to transfer the professional income of foreign employees and  Equal treatment of Mauritanians and foreign individuals, as well as of legal entities. Right of Establishment

 COMESA is using the harmonized axle load limit to safeguard the roads against overloading. Transport and Communication  200 km of 240 km of Arusha- Namanga-Athi River Road is complete

 Use of the Harmonized Consumer Price Index (HCPI) as a mechanism to harmonize inflation rate  COMESA is implementing the HCPI  Its based on a harmonized methodology and conceptual approaches across COMESA  SADC is also implementing its HCPI and reported and gazetted on monthly basis Macroeconomic Convergence

 Institutional Monitoring Mechanisms for macroeconomic convergence integration  ECOWAS has set up an institutional framework for multilateral surveillance  It works closely with;  The West African Monetary Agency (WAMA), and  WAMI to promote the establishment of a second West African Monetary Zone (WAMZ) Macroeconomic Convergence

Payment Systems  Launched in 2007  It has over 10 million subscribers and  Over 2 million daily transactions  Over $ 415 million per month in P2P transactions in Kenya alone.  One-quarter of Kenya’s GDP flows through the mobile payment system.  Contributes annually to roughly 17 per cent of Kenyan GDP.

Way Forward  Recommend best practices be identified, reported on and shared at country, REC, and even continental level  Although bilateral agreements help to initiate momentum, but for RI initiatives to achieve the intended purposes, encourage agreements through multilateral arrangements