'You must first set your house in order'

Africa Renewal Wednesday 9th November, 2016

you must first set your house in order

Create the conditions for integration, says Prof. Adedeji

For some three decades, Prof. Adebayo Adedeji has been one of Africa’s foremost proponents of regional integration. In the early 1970s, as Nigeria’s federal commissioner for economic development and reconstruction, he took a leading part in the negotiations that brought the establishment of the Economic Community of West African States (ECOWAS). Then, as executive secretary of the UN Economic Commission for Africa (ECA) from 1975 through 1993, he actively promoted the creation of other regional groupings, including the Preferential Trade Agreement (PTA), which subsequently became the Common Market for Eastern and Southern Africa (COMESA). He currently directs the African Centre for Development and Strategic Studies, a think-tank based in Ijebu Ode, Nigeria. Shortly after delivering a major address on “The History and Prospects for Regional Integration in Africa” to the 3-8 March African Development Forum in Addis Ababa, he shared his reflections with Africa Recovery.

AR: You’ve been involved in African regional integration for a long time. Looking back at its shortcomings and ahead at its prospects, would you describe yourself as a pessimist or an optimist

Adedeji: I’m not pessimistic. I’m not optimistic. I’ve spent a quarter of a century of my life promoting economic cooperation. I was a leader of the team in the establishment of ECOWAS. I was very optimistic when I came to the ECA that I would be able to do similar things elsewhere in Africa. So we started the PTA and COMESA, then in Central Africa. I’ve gone through it. It has been disappointing that these have not achieved much.

At that time, the economies of Africa were quite dynamic. In the 1970s, the average rate of growth was 5-6 per cent. Some countries achieved 7 or 8 per cent growth rates. But in the 1980s, the growth rates averaged less than 3 per cent. And that really was a problem. If we can revive the economies and begin to achieve prosperity, then we will have created a very sound basis for regional economic integration. So it is not pessimism. It’s just getting the conditions in place. That is the message I have tried to bring forward. You must first set your house in order before you can begin to think of a bigger house to build.

AR: With the economic crises of recent decades and the liberalization policies of structural adjustment, the capacities of African governments appear to have eroded. Could you describe the relationship between the African state and regional integration initiatives

Adedeji: First, you must have a dynamic state. If you have a stagnant, contracting state, forget about regional cooperation. When a state finds itself in a crisis, it does not see beyond its nose. If you can’t provide enough transport facilities at home, how can you be thinking of West African or pan-African transport facilities There are states that can’t even pay the salaries of their civil servants. How can you expect them to take out of their non-available resources to pay contributions [to regional organizations]

Some of these things can be done simultaneously, once African states begin to move up. But when states are descending, you can’t get any effective cooperation. The lack of progress in the 1980s was also the period when economic cooperation virtually collapsed in Africa. It was inevitable. So the two things must go together: the ascent of the state, with the recovery and the dynamization of the national economy taking the lead.

All the regional economic arrangements throughout the developing world did not fully achieve their objectives. But the European Community did. Of course, if you look at the period of the 1950s, 1960s, and 1970s, the European economies were moving fast, expanding. Therefore, the environment for regional integration was there. That is what has been absent in Africa. We don’t have an enabling environment for integration, because we have stagnant, declining economies.

AR: Some have argued that trade among African countries is greater than what is reported, because much of it is informal and bypasses the official customs services . . .

Adedeji: We [in ECA] undertook a study on what we called “unrecorded trade” in West Africa. We found that the value of unrecorded trade is more than equal that of recorded trade. In other words, if you added the two together, you would have doubled the volume and value of intra-West African trade.

In a way, that explains that some of the barriers simply need to be removed. In other words, ECOWAS was set up to allow free movement of goods. It has passed so many protocols to that effect. But it has not happened. Bureaucracy, in every ECOWAS country, is making it difficult. So people then take the law into their hands. There are many people travelling in West Africa – you can’t stop them. So what you have to do is legitimize this unrecorded trade through import liberalization, and really make it effective.

AR: Should African states follow that process or try to influence the nature of the cross-border markets

Adedeji: There’s no role for the public sector except to provide an enabling environment. It’s not that these African states, as states, will take part in the trade. The people are doing that very well. If you go to Cotonou [Benin] today, a large proportion of the goods you find there come from Lagos [Nigeria]. But instead of smuggling it in, what we are saying is that they should be encouraged to bring it in directly. So states can do a lot to regularize and legitimize, but not get involved in direct trading at all.

ARYou have spoken of your own frustrations in trying to arrange support from donors to finance cross-border roads and other infrastructure links. Some African leaders, such as President Abdoulaye Wade of Senegal, have emphasized the importance of private sector investment in infrastructure development. Do you also see some role for the public sector there

Adedeji: We have based the development of infrastructure on the public sector up to now. And we have not been very successful. So I believe that if the private sector can be encouraged to participate – in collaboration with the public sector, not to the exclusion of the public sector – that can really accelerate the process.

I must acknowledge here the role that some governments have played. Let me give you an example. The ECA in the 1960s came out with three major highway programmes: the Nouakchott-Lagos road, which would cut across the Sahara; the Lagos-Mombasa road, which would go from one end of West Africa to the extreme end of East Africa; and the Cairo-Cape road, to South Africa. The standards were agreed upon. The laws and regulations were agreed upon. It was assumed that each government would be responsible for constructing its own part, within its territory. Some parts have been built by national governments.

But for some governments, the road is not yet on their priority list. Take the Lagos-Mombasa road: Between Lagos and the border of the Central African Republic, you can drive. From the Central African Republic, through Zaire [now the Democratic Republic of Congo], up to the border of Uganda, about a thousand kilometres have not been built. Then through Uganda up to Mombasa, it’s again free passage. The road involves about half a dozen countries. But because two countries have played foul, the project has not been completed.

I remember on one occasion, I went to see Mobutu, who was then the president of Zaire. He took me to his village and insisted I spend the night there with him. At dinner, we were both drinking beer. He said to me, “Professor, why do you hate me” The glass nearly dropped from my hand. I said, “Mr. President, what do you mean by ‘I hate you'” He said, “You know, you are insisting on this trans-African highway being built. I have insurgents. Now if I build the highway, I won’t be able to control them. I’ll be overthrown.” So you can see how personalized public policy is in our countries.

There was a lot of liberalization in Africa in the 1980s and 1990s, of a unilateral nature, often within the context of structural adjustment programmes. From the perspective of producing manufactured goods that African countries can trade with each other, did that experience help or hurt

Adedeji: It didn’t help. It hurt, and hurt a lot. After independence, African governments, one after the other, had embarked on industrialization as a major policy. According to the conventional wisdom of the 1950s and 1960s, industrialization would lead to import substitution, which meant that you started producing your own textile goods, your own consumer goods, mainly. To do that effectively, you built a tariff wall, because comparative advantage is never on the side of the newly industrializing countries.

The import-substitution industrialization policy was carried too far by the Africans. [To manufacture the goods] they imported the capital goods, the skills, the professional labour. One had assumed that the raw materials would come from Africa. But in many cases they had to be imported too. So really the manufacturing plants became merely places for assembly. They were very vulnerable. They needed protection. And the protection could not be removed after five years, as envisaged. They kept it up.

Togo plastics factory: Africa needs to produce more manufactured goods, but wholesale liberalization has brought “de-industrialization”.

Photo : UN / Betty Press

That was the time liberalization was forced on Africans, as part of the structural adjustment programmes. And that led to the de-industrialization of Africa. In 1960-1975, 10-15 per cent of GDP was accounted for by manufacturing industries. Today, most countries’ industrial contribution is less than 5 per cent. So Africa has gone through a massive process of de-industrialization. The liberalization imposed by structural adjustment opened the African market to goods coming from the highly industrialized countries, which no African country can ever compete with. So, it’s put back the hands of the clock, as far as Africa is concerned. And now with the World Trade Organization, it is even more difficult for a regional organization to set up a tariff wall.

This is one of the problems the African Union will have to face. How do you launch a new process of industrialization in Africa That will call for negotiations with the World Trade Organization and the rest of the international community, to take Africa as a special case. Give it ten years or so, during which it can really restructure its industries, not on the basis of importing everything and just relabelling it, but on a more serious basis.

Leave a Reply