Contemporary Regional Development in Africa

Kobena T. Hanson

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781472451439
• eBook ISBN:
  9781317160533
• Topic: Economics
• Subtopic: African History
• Index: Economics

Contemporary Regional Development in Africa interrogates well-known concerns in the areas of regionalism and economic integration in contemporary Africa, while offering an added uniqueness by highlighting the capacity imperatives of the issues, and proposing critical policy guideposts. The volume juxtaposes a set of 'dynamic' entanglements - new and micro-regionalism, informal cross-border trade, intra-African and African FDI plus cross-border investments, infrastructure development, science and technology, regional value-chains, conflict management and regional security - with fluid interpretations of regional development. The chapters provide snapshots of the several emerging and complex regionalisms and highlight a set of relevant and often overlapping analyses - drawing on authors' nuanced and granular understanding of the African landscape. The varied, yet interlinked, nature of issues covered in this study make the book valuable and attractive to academics, researchers, policymakers and development practitioners.

Chapter 1
Contemporary Regional Development in Africa: Reflections and Implications

Kobena T. Hanson and Vanessa T. Tang

Introduction

There is strong and growing support for regional development and integration in Africa as a strategy for advancing its socioeconomic endeavors. The desire to integrate African economies both at the regional and continental level is shared among African governments and their international development partners such as the European Union (EU), United Nations agencies and the World Bank. The desire for integration dates back to the formation of the Organization of the African Union (OAU) in 1963. However, the objective gained further traction in 1991 with the signing of the Abuja Treaty creating the African Economic Community (AEC), which called for an African common market and monetary integration by 2028.

The celebration of 50 years since the creation of the African Union (AU) and its predecessor the OAU further reaffirmed the desire and intent to integrate in the expressions of solidarity and common purpose from the statements made at the occasion of the celebration in Addis Ababa. The theme of the celebrations entitled “Pan-Africanism and African Renaissance” resulted in a declaration covering a wide range of issues starting with the question of African identity (50th Anniversary Solemn Declaration of the AU 2013). Other issues covered include the commitment to developing human capital; adding value to natural endowments; agricultural production and agro-processing and achieving food security; enhancing democratic governance; continuing in the process of social and economic integration; and determining Africa’s place in the world, amongst others.

Regional development facilitates the growth and development of nations which in turn can facilitate the integration of countries, Africa included, into the world economy. Within the trade creation and trade diversion framework, regionalism can lead to net trade creation if it occurs in an environment of least impediments, including increased openness to trade coupled with investments in human and physical capital and institutional resources from each participating country.

Also, the growth and developmental approach of African countries requires a larger role from democratic developmental states the likes of Botswana and Mauritius, as well as from South Africa, the largest competitive African economy and attractive aid-provider, with its link to the recent creation of a US$100 billion BRICS development bank. South Africa’s role as a development partner for Africa however, will ultimately as Vickers (2012, p. 553) notes depend on how well it can balance its external expectations with the country’s own socioeconomic realities.

Regional development and integration with neighboring large economies and developmental states can enable the less developed nations to learn and address their economic, political and developmental problems and become better positioned to participate in the global value chains, attracting foreign direct investment flows, enhancing private sector activities and increasing economies of scale (World Bank 2009). Also as Clapham (2001) observes, structures at regional level enhance the establishment of good governance, a pre-condition for economic growth. And Hettne further submits, regional development serves to transform micro regions, “as the geopolitical environment becomes transformed and creates new possible alignments and a direct approach to the [global] economy for the subnational regions” (Hettne 1999, p. 15).

Additionally, regional economic agreements have enhanced the bargaining power and expertise of African countries, enabling them to meaningfully contribute to reforming the global economic order and maximizing their commitment to policy reforms (World Bank 2008).

Furthermore, regional development boosts security and lowers the risk of conflict amongst African nations as a result of improved intra-regional confidence and trust, common defense mechanisms and interdependence in key aspects of countries’ national development (World Bank 2008), consequently reducing the continent’s dependence on foreign assistance (Kedir, this volume). This notwithstanding, Brown et al. (2009) caution that regional development does not necessarily eliminate conflict as some countries continue to opt for armed conflict to settle their differences. There is thus a need for institutional capacity enhancement in conflict management and peace building to foster economic integration (Ismail, this volume).

Proponents of regional development further claim that it enhances food security (in terms of availability of acceptable quality, demand and purchasing power of both rural and urban consumers). Increased intra-regional collaboration promotes economic growth, increases employment opportunities and income generating capacities of the poor thereby enhancing access to food and ultimately improving living standards (FAO 2003; Santi, Saoussen and Shaw 2012). Intra-regional trade can also enhance domestic food supplies to meet consumption needs and reduce food supply variability. Its effectiveness, however, depends on the design of the agreements and the ability to promote more trade creation rather than diversion (FAO 2003).

Although regional development has been strongly supported by different development partners, it has also received vast criticisms (Hass 1970; Lee 2002; Draper 2012). Critics argue that the linear EU model of integration (beginning with a free trade area or preferential trade area and ending with monetary integration) does and will not work for Africa. The model should be redefined to fit the context of Africa’s realities (Lee 2002; Draper 2012). Learning from the EU model, a fast-tracking regional enlargement and the existence of major disparities across member states could cause havoc under asymmetric shocks.

In the current era of globalization, regionalism¹ alone is not a solution. Regional and global integration of African economies should be complementary (World Bank 2009; UNDP 2011). Indeed, being more integrated continentally and globally increases Africa’s capacity² and reduces trading costs which in turn should strengthen and enable African economies to boost trade and investments.

Also, regionalism necessitates regional cooperation, a process by which a group of nations voluntarily and in various degrees have access to each other’s markets and establish mechanisms and techniques that minimize conflicts and maximize internal and external economic, political, social and cultural benefits of their interaction (Lee 2002, pp. 22–3). And while regional economic cooperation can deliver a number of benefits in the long term, it also produces winners and losers in the short run through trade creation and diversion effects (Venables 2003). The trade creation and diversion effects can arise in any regional grouping that reduces barriers to trade that are not extended to non-members. However, if reductions in barriers to trade are offered on a most favored nation basis, then trade diversion can be avoided. Further, trade creation allows resources to be allocated according to comparative advantage and specialization to higher productivity areas. However, according to Maruping (2005), resources flowing toward existing clusters of economic activity, may leave economically disadvantaged areas to fall further behind. This outcome is more likely to occur if in such areas the infrastructure is insufficient and does not work properly.

Attempts to regionalize Africa have yielded minimal economic benefits due to some of the aforementioned hurdles. Mainstream perspectives even claimed that “if there is any regionalism at all in Africa, it is … characterized mainly by failed or weak regional organizations and a superficial degree of regional economic integration” (Grant and Söderbaum 2003, p. 1). The uneven and unimpressive macroeconomic performance exhibited by many countries is replicated within regional institutions where collective leadership is expected to jolt the continent out of its economic slumber and help promote good governance. While some progress is being made on these fronts within the African Union and sub-regional organizations, the general assessment by most analysts is that substantive movement in support of good governance is still marginal at best (Murithi 2007).

Contemporary African Regionalisms at the Turn of the Second Decade of the Twenty-First Century

The above notwithstanding, there has been strong support for a “new” regionalism in Africa over the last two decades. Africa has witnessed a revival in regionalism since 1990 with the creation of new regional institutions and relationships (Shaw and Fanta 2013; Shaw, Grant and Cornelissen 2012, Söderbaum and Taylor 2008). In the initial, one-party nationalist period, reflective of jealousy surrounding newly realized independence, these were typically “old” inter-governmental arrangements. But in the post-bipolar era, such regionalisms became less exclusively state and more inclusive from economics to emerging issues including shifts in resource flows and supply chains, ecology, energy, security, water and financial innovation (Shaw 2015; Shaw, Grant and Cornelissen 2011).

Reflective of its more than 50 states, Africa has the potential to be the leader in the South to advance regional innovations and institutions. Africa’s contemporary regionalisms are characterized by openness as opposed to the more state-centric approach in “old” regionalism. Africa’s contemporary regionalism employs a bottom up approach unlike the old system which was top-down, and places emphasis on super national agents in a project as opposed to the dominate state-centric actors of “old” regionalism (FAO 2003; Grant and Söderbaum 2003). It also seeks to include inter-state global and regional institutions and non-state actors such as MNCs, civil societies and national and international nongovernmental organizations (Breslin and Hook, 2002). As Breslin and Hook (2002, p. 221) further note, with the emergence of new spatial patterns that “are less national, and more international in character, these new internationalized economic spaces become dis-embedded from the old national economy.” As a result the processes and dynamics of regional development exhibit great “mixes between the formal and informal and, in fact, these two impulses compete for supremacy in quite intriguing ways (Söderbaum and Taylor 2008, p. 17).

The global financial crisis of 2008 has unveiled an emerging Africa and the global South’s “new voices” and “new dynamics.” According to Shaw and Fanta (2013, p. 5), the new dynamics guiding regionalism in the global South are characterized by entanglements of myriad actors and stakeholders forming heterogeneous coalitions with the aim of regional development. For example, the revived, redefined East African Community (EAC) is emblematic: with five rather than its initial trio of members, with its innovative civil society, parliamentary and security dimensions, qualifying as an instance of African contemporary regional development (Shaw, Grant and Cornelissen 2012; Hanson, Kararach and Shaw 2012). Another example is the Maputo Development Corridor (MDC) which links the Port of Maputo with the industrial heartland of Southern Africa and the city of Johannesburg (Hanson, Puplampu and Owusu, this volume).

The new regional arrangements among Africa’s states seek to liberalize markets and increase cross-border trade. While several states have made good progress in developing regional interconnections which cut across national borders, much more is required for Africa to witness a larger boost in trade, growth and human development. Developing intra-African infrastructure is crucial especially for the 15 landlocked countries (UNDP, 2011, p. 17). Similarly, efforts to increase diversification are equally crucial since there are few African economies that are truly diversified and the landlocked countries remain relatively undiversified.

In the new century, regionalisms on the continent cover the spectrum of levels—macro/meso/micro (Söderbaum and Taylor 2008)—and sectoral—civil society, corporate networks, ecology, energy and security. While free trade zones are generally associated with Asia, and gas pipelines with Central Europe, development corridors and peace-parks are largely a function of Southern Africa’s distinctive political economy (Shaw and Fanta, 2013). Similarly, Africa has its share of river valley organizations and other cross-border formal micro-regions (Chikozho 2012, 2014; Unruh; Diawara and Boakye, this volume). This notwithstanding, if Africa is to capitalize on its contemporary regionalisms and play a developmental role, efforts need to be made to address past failures (e.g. overlapping membership, over reliance on donor funds, and a lack of political commitment). The pursuit of a developmental state, as Maphunye (2009) suggests, should address issues of capacity development including human resource development and public administration skills.

Africa’s efforts toward economic integration have been hindered and undermined by “overlapping regional arrangements and the absence of collective agreements on rationalizing and harmonizing regional initiatives” (Tavares and Tang 2013, p. 229). For consensus building, there is thus a need for capacity development in best practices to regionalism and economic integration at the macro, meso and micro levels.

The volume juxtaposes a set of “dynamic” entanglements—new and micro regionalism, informal cross-border trade, intra-African and African FI/FDI and cross-border investments, infrastructure development, science and technology, regional value-chains, conflict management and regional security—with fluid interpretations of regional development. Clearly, different state and non-state actors have different levels of ability to shape and respond to the myriad entanglements of regional development. Insights concur with the position of Söderbaum and Taylor (2008, p. 52) that regionalism “is not only driven by state elites, who have their own agenda, but also by communities and peoples who utilize [regionalism] for a heterogeneous set of reasons and motives ….” To reiterate, the dynamics of regional development and related regionalisms are informed by the strategic considerations of the states and myriad actors in the mix. Bhagwati and Panagariya (1996) highlight the complex entanglements of rules and regulations in what they term the “Spaghetti Bowl.” And Söderbaum (2003) also notes the process of contemporary regionalism is “fluid, multi-dimensional, and multi-level” which according to Hettne (2005) evolved in a multi-polar global order.

Africa has generated an innovative range of new regionalisms involving non-state actors: from the Maputo Corridor and Kgalagadi trans-frontier peace-park to the Nile Basin Initiative/Dialogue; and from the International Conference on the Great Lakes Region to corporate supply chains (Hanson, Kararach and Shaw 2012). The Maputo Corridor, for example, has advanced growth in Southern Mozambique as well as the eastern Witwatersrand, reinforcing the cross-border dimensions of the Lesotho Highlands Water Project (http://www.lhwp.org.ls); the latter was informed by the only global commission to be based outside the North—in Cape Town—which also included multinational corporations (MNCs) as well as non-governmental organizations (NGOs) and states in its membership (Khagram 2004). Reflective of growing concern for the environment, Southern Africa is the center of the trans-frontier peace-parks movement which has led to the recognition of several such cross-border parks in the region (www.peaceparks.org).

Again, the continent’s pattern of inter-regional relationships is in flux, from classic, inherited North-South dependencies toward a novel South-East axis around China and India but also Japan and Korea (Shaw 2012, p. 11). Symbolically, Africa’s regions’ reluctance to sign economic partnership agreements (EPAs) with the EU at the turn of the decade despite a mix of pressures and incentives may mark a turning point as global rebalancing continues: the Europe of the Eur...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures and Tables
• Notes on Contributors
• Foreword
• Acknowledgements
• List of Abbreviations
• 1 Contemporary Regional Development in Africa: Reflections and Implications
• 2 Regionalism, Globalization and Economic Integration in Africa
• 3 “New” Regionalisms in Africa: Approaches, Challenges, Opportunities and Implications
• 4 Micro-Regionalisms in Africa: Dynamics, Opportunities and Challenges
• 5 The Impact of Informal Cross-border Trade on Regionalism and Poverty Reduction in West Africa
• 6 Enhancing Regionalism for Intra-African and African Inward Foreign Direct Investment
• 7 Infrastructure and Capacity Development as a Catalyst for Regionalism and Economic Integration in Africa
• 8 Innovation, Science and Technology: Regional Networks for Research and Technology Development in Africa
• 9 Regional Value Chains and Productivity Enhancement in Africa
• 10 The Boko Haram Insurgency and the Changing Patterns of Regional Security Arrangements in Africa
• Afterword: “African Agency” to Maximize the Continent’s Policy Choices after a Decade of the BRICS: Beyond Dependency?
• Index