Integration? Look to east Africa
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