Africa Makes Strides Toward Economic Integration, But Obstacles Remain, Say Subcommittee Witnesses
The U.S. should consider increasing the role of African regional economic communities (RECs) through African Growth and Opportunity Act (AGOA) renewal in order to streamline U.S. export and import capacity with the continent, said Manchester Trade President Steve Lande at a Jan. 9 House Foreign Affairs Committee subcommittee on Africa, Global Health, Global Human Rights, and International Organizations titled “Will there be an African Economic Community?” The African continent is making significant advances toward economic integration, aided by U.S. efforts through U.S. Trade Representative Trade and Investment Framework Agreements and State Department missions to African RECs, said Lande.
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“U.S. companies need unfettered borders to operate their supply chains and distribution networks within the region. They cannot effectively operate in sub-Saharan Africa if they must operate in 48 countries - most of them much too small to do effective business,” said Lande, a witness, in written testimony (here). “For starters, the prompt, seamless renewal of an enhanced AGOA would ensure that the program continues to play a constructive economic role in supporting regional integration. However, such a renewal should include provisions reinforcing African efforts to meet its integration goals.”
In order to continue to pursue integration, the African continent still needs to make strides toward quelling regional strife and instability and strengthening common institutions, said witness Amadou Sy, Senior Fellow with Africa Growth Initiative at the Brookings Institution. “Africa accounts for 1.8 percent of global imports of goods and 3.6 percent of global exports and these rates are lower in the services sector. The political, economic and geographic fragmentation of Africa creates a number of barriers to trade, investment and the operation of supply chains,” said Sy written testimony (here). “Additionally, the implementation of single currency across Africa is unlikely, but some expansion of the existing monetary institutions is possible. Ultimately, regional integration is not limited to the establishment of a monetary union, and a focus on the freedom of movement of the other factors of production can help build economies of scale.”