Explainer: African Economic Community (AEC)

Today there is no country in Africa that is not a member of at least one regional economic group. In addition to agreements at a regional level, attempts have also been underway to create economic cooperation (and ultimately meaningful economic integration) among African countries at a continental level. This effort culminated in the signing of the African Economic Community Treaty (or the Abuja Treaty) in 1991. This treaty came into force in 1994.

The adoption of the 1991 Abuja treaty was one of the major antecedents to the African Union. Article 6 of the Treaty envisages the establishment of the African Economic Community (AEC), as an integral part of the OAU upon passing six consecutive stages over a transitional period not exceeding thirty-four years. The African Union (AU) was meant to be a forum that can accelerate sub regional economic integrations, which would in due course be amalgamated to create the African Economic Community. In pursuance of this expectation, the African Union has so far recognized 8 Regional Economic Communities. Besides recognizing them, the African Union intends to collaborate with them so as to create integrated Africa.

Article 4 of the Abuja Treaty enumerates four basic objectives of the AEC. These are:

1. To promote economic, social and cultural development and the integration of African economies in order to increase economic self-reliance and promote an endogenous and self-sustained development;

2. To establish, on a continental scale, a framework for the development, mobilization and utilization of the human and material resources of Africa in order to achieve a self-reliant development.

3. To promote cooperation in all fields of human Endeavour in order to raise the standard of living of African peoples, and maintain and enhance economic stability, foster close and peaceful relations among Member States and contribute to the progress, development and the economic integration of the continent, and

4. To coordinate and harmonize policies among existing and future economic communities in order to foster the gradual establishment of the community.

The Regional Economic Communities (RECs) that are the building blocks of the African Economic Community (AEC) are:

1. Inter -governmental Authority on Development (IGAD): Established in 1996. It has seven member countries in East Africa. These are Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda. The IGAD was basically founded to address the recurring and sever droughts and other natural disasters that caused widespread famine, ecological degradation and economic hardship in the Eastern African Region. Its mandate eventually grew to include peace and security cooperation. It is on a path of closer cooperation with the other East African grouping The East African Community (EAC). Read more here.

au_and_rec_logos_02. The Common Market for Eastern and Southern Africa (COMESA): Established by Treaty in 1991. It comprises 19 member states: Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya (since June 2005) Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. The COMESA main objectives include taking advantage of a larger market size, to share the region’s common heritage and allow greater social and economic co-operation with the ultimate objective of creating on economic community. Read more here

3. The East African Community (EAC): is another sub-regional intergovernmental organization of the Republics of Kenya, Uganda, Tanzania, Burundi and Rwanda. Its main objective is to enhance the region’s competitiveness through ever-deeper integration inclusive of a customs union, a common market, a monetary union and ultimately a political federation of East African states. Read more here

4. The Economic Community of Central African States (ECCAS): Established in 1983. It has ten member states. These are Angola, Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon and Sao Tome and Principe. Among the vital steps taken by ECCAS, its adoption of a protocol relating to the establishment of a network of parliamentarians of Central Africa and the early warning system for Central Africa are the notable ones. Read more here

5. The Community of Sahel-Saharan States (CEN-SAD): Established in 1998. It is a sub-regional grouping of  twenty three countries including Benin, Burkina Faso, Central African Republic, Chad, Cote D’Ivore, Djibouti, Egypt, Eritrea, The Gambia, Ghana, Guinea Bissau, Liberia, Libya, Morocco, Mali, Niger, Nigeria, Senegal, Sierra Leone, Somalia, Sudan, Tunisia and Togo. Its objectives are establishment of a comprehensive economic union and elimination of obstacles impeding the unity of its member states. Read more here

6. The Economic Commission of Western African States (ECOWAS): Established in 1975. It is a sub-regional grouping of fifteen countries including Benin, Burkina Faso, Cape Verde, Cote D’Ivore, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. The EOWAS has four objectives: the removal of customs for intra-ECOWAS trade and taxes having equivalent effect, the establishment of common external tariff, the harmonization of economic and financial policies, and the creation of single monetary zone. Read more here

7. The Southern African Development Community (SADC): Established in 1992. It has fourteen member states: Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. SADC has monetary, economic, political, security and cultural objectives which aim at cooperation and integration among its member states. Read more here

8. The Arab Maghreb Union (AMU): Established in 1989. It has five member states: Algeria, Libya, Mauritania, Morocco and Tunisia. It dares to guarantee cooperation with other regional institutions and between its member states. Read more here

The pace of integration of the RECs varies widely as some groups (like ECOWAS, SADC and EAC) are more integrated than ECCAS and IGAD. The AU aims to harmonize the level of integration within them and between them. The consolidation and merger of these groupings will result in the formation of Free Trade Areas (FTAs), Customs Unions, a Continental Free Trade Area (CFTA), and a single market. The final goal of establishing an economic and monetary union will include an African Central Bank (ACB), African Monetary Fund and a single African currency.

As per the Rules of Procedure of the African Union Assembly, the RECs are made part of the African Union’s activities. In fact, it is decided that a delegate is appointed to interface with the RECs strengthening the legal relationship between the African Union and the sub-regional organizations. The RECs are now becoming organs that can implement decisions adopted by the African Union Assembly.

Agenda 2063, the grand African renaissance draft plan of the AU, maps the future and the role of RECs in realizing the AEC. Some of the expected results of the integration process are:

* RECs, AUC and all AU Organs will have the capacity to prioritize, design, execute their mandates, including Agenda 2063, by 2017.

* All protocols leading to free movement of persons in each REC will be domesticated by 2016 and Intra- African Trade will be raised from 10.1% in 2012 to 60% by 2063.

* The union will harmonize, ratify and domesticate treaties / protocols related to regional integration of all modes of communications by 2018 and Complete all infrastructure for connectivity by road, air, marine, electronic by 2025 and by rail 2040.

* African Free Trade Area (by 2017), Africa Custom Union (by 2019), African Common Market (by 2025) and Africa Monetary Union will be established by 2025. All Key economic and political governance institutions will be in place by 2060.

[You may also read a review of the draft Agenda 2063 here.]


Fetsum Berhane is an Ethiopian resident, economist researcher and a blogger on HornAffairs.

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