In­te­gra­tion? Look to east Africa

CityPress - - Busi­ness - Zeona Ja­cobs busi­ness@city­press.co.za

The con­cept of re­gional in­te­gra­tion has been a long-stand­ing theme at the Africa meet­ings of the World Eco­nomic Fo­rum (WEF). South­ern Africa may have had some chal­lenges with mak­ing the de­sired progress on this front, but that is not to say it can­not be done.

We would do well to look to east Africa and learn from some of its suc­cesses.

At­tend­ing the Africa meet­ing in Rwanda this month was truly in­spir­ing from an African per­spec­tive, firstly be­cause of the progress that coun­try has made. While it may still have chal­lenges, it is amaz­ing to see the vis­i­ble trans­for­ma­tion Rwanda has achieved af­ter go­ing through one of the blood­i­est geno­cides in his­tory.

Rwanda has re­built its coun­try and has man­aged to work ef­fec­tively with its neigh­bour­ing coun­tries, lead­ing to an eco­nomic mul­ti­plier ef­fect in the re­gion. This is where south­ern Africa can learn a lot from its north­east­ern neigh­bours.

I be­lieve the suc­cess of their in­te­gra­tion can mainly be at­trib­uted to the speed at which they have been re­form­ing, the lead­er­ship of the East African Com­mu­nity, as well as the po­lit­i­cal will from Rwanda, Tan­za­nia, Bu­rundi, Kenya and Uganda to achieve real re­sults.

Cru­cially, they have shown an abil­ity to im­ple­ment their plans, which is an area where south­ern Africa is sorely lack­ing.

Min­is­ters from each of the East African Com­mu­nity coun­tries meet every two months to dis­cuss the progress to­wards in­te­gra­tion, and the chal­lenges stand­ing in their way. They have fo­cused on im­prov­ing mo­bil­ity, de­creas­ing tar­iff bar­ri­ers and im­prov­ing the speed of port ac­tiv­i­ties.

The re­sults speak for them­selves. The re­gion now in ef­fect has in­vis­i­ble bor­ders – vis­i­tors to the East African Com­mu­nity only need one visa for the coun­try they’re vis­it­ing, much like the Schen­gen group of coun­tries. Where it used to take 31 days for goods to clear the ports and move into the mar­ket, it now takes only five days. Of course, one has to bear in mind that th­ese coun­tries’ struc­tures are dif­fer­ent to those in south­ern Africa.

The East African Com­mu­nity is small, and some coun­tries are land­locked and not as re­source depen­dent as their west African coun­ter­parts.

That is not to say that we can­not take a leaf or two out of the East African Com­mu­nity’s book.

Ed­u­ca­tion has been a key in­vest­ment for the re­gion. Rwanda is ranked 45th for the qual­ity of its ed­u­ca­tion sys­tem on the WEF Global Com­pet­i­tive­ness In­dex, but South Africa is 138th out of 140.

The South­ern African Devel­op­ment Com­mu­nity has made progress in some re­spects and the re­gion has also har­monised its poli­cies, and has ex­pe­ri­enced un­par­al­leled peace and po­lit­i­cal sta­bil­ity over a num­ber of years.

As far as stock ex­changes are con­cerned, a num­ber of them on the con­ti­nent are work­ing to­gether to build more ca­pac­ity in mar­kets, deepen liq­uid­ity pools and ul­ti­mately broaden cap­i­tal mar­kets.

One ex­cit­ing project that Os­car Onyema, the pres­i­dent of the African Se­cu­ri­ties Ex­changes’ As­so­ci­a­tion and CEO of the Nige­rian Stock Ex­change, men­tioned re­cently is a way to link the ma­jor ex­changes on the con­ti­nent.

The idea is for the JSE, the Nige­rian Stock Ex­change, the Casablanca Stock Ex­change and the Nairobi Se­cu­ri­ties Ex­change to work to­wards a pi­lot project that will link th­ese ex­changes so that in­vestors can have ac­cess to the dif­fer­ent prod­ucts and com­pa­nies in other mar­kets through one “pipe”, so to speak.

We be­lieve this will give in­vestors choice and ul­ti­mately drive liq­uid­ity.

Re­gional in­te­gra­tion is not im­pos­si­ble, even on a con­ti­nent as big as ours. East Africa has shown that a small re­gion can achieve big things if the will is there to make a dif­fer­ence. Ja­cobs is the di­rec­tor for mar­ket­ing and

cor­po­rate af­fairs at the JSE

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