September 7, 2009: London, UK

This week, the East African Community (EAC) launched consultations to establish an East African Monetary Union by 2012.  The consultations are part of a broader regional agenda that will include, among others, the development of a common market by early next year, as well as the use of a single currency by all EAC members – Burundi, Kenya, Rwanda, Tanzania, and Uganda.

There are many justifications behind the formation of regional economic communities.  One argument suggests that there are efficiencies to be gained with the free movement of capital and labour towards economic activities where they are most productive.  The harmonisation of tariffs in a larger market is also conducive to potentially greater foreign investment.

Once regarded as cavalier, economic arrangements are quite common these days, be they trade agreements or, in the case of the EAC, eventual monetary union.  Let’s be honest – these arrangements are hardly the stuff of much fanfare and gloss (though they are the raison d’être of many a “dismal scientist”).  Yet, when these arrangements speak to national sovereignty and identity considerations, or to political visions of what constitutes a “just” or “fair” society, then the vultures are on the walls.  Think Chavez and Bolivarian nationalism in Latin America; the WTO protests in Seattle in 1999; or, contentious discussions on further economic and political integration between Canada and the US.

In the case of the EAC, these arrangements are in danger of becoming interesting when one considers how the momentum of the past in Africa becomes the inertia of its future. Certainly, there are potential economic gains to be made from the formation of the EAC.  However, there remains an historical vision much more profound behind, and beyond, it: the formation of a continent-wide economic and monetary union through harmonising the many economic arrangements (including the EAC) across Africa.  Even deeper still, lies the framework for African unity and a united Africa under the African Union, a much desired vision dating back to the times of the Union of African States and the Organisation of African Unity in the 1960s.

The inconvenient truth of the matter is that actually getting to that vision, though possible, will be challenging.  Not only is it a matter of technicalities, such as the harmonisation of regulatory frameworks across countries with limited capacity, different resources, and diverse people; there remain deep political considerations.  Instability, weak governance, and poor policy choices, for example, will have impacts across regional communities.  The inability to contend with longstanding land disputes in Kenya, for example, became a rallying call for much politically-motivated violence and conflict during the 2007 presidential election.  The effects of such a conflict in one country could be much more damaging for the regional community as a whole.

Yet, it remains that the optimal way to face some of the challenges in Africa now and ahead will be the opportunities that a pan-African vision motivates.  This is because many of the challenges in Africa require continent wide solutions.  Infrastructure development or water management, big investments for any poor country, can be better tackled through continental approaches because of economies of scale. Climate change, similarly, will not only have national and regional effects in terms of impacting agricultural productivity and/or disease patterns; it also has the ability to affect the entire biodiversity of the continent (and Africa’s tourism sector).  For example, whereas previously wildlife may have had the opportunity to migrate with changing seasonal patterns, as dry lands became drier the stress of migration becomes more imminent, with less-than-predictable results on both ecosystems and humans.   

As the EAC begins its consultations as part of a wider continent-wide agenda towards eventual union, it will be important to bear in mind the opportunities greater integration can motivate for contending with national, regional, and continent-wide development challenges.  Equally, however, will be realism of the integration challenges ahead and, importantly, not getting lost in the vision itself.