AFRICA: TOWARDS REGIONAL INTEGRATION
ECOWAS should be selective in accepting foreign assistance,
argues Felix Oladeji
Regional aspiration as shared by West African statement, academia and citizen alike reflects a general desire to break out of the cycle of poverty and a denial of all that divides the region including barriers to free movement of good, service, labour and capital among the partnering countries. As it is, the quest for regional desire also constitutes a response to manifest incapacity of the countries to meet domestic need and the search for solution on how African can improve their share of the world trade without compromising the welfare of the nation.
The signing of ECOWAS Treaty with Switzerland in 2017 provides a new ambitious blueprint for economic integration and development in Africa. However, one of the remarkable features of this historic event was the relative lack of analysis on the implication on these moves on West African nations, particularly the major macroeconomics issues, political conflict, insecurity and economic backwardness facing the region before the treaty was drafted.
Historically, the first effort made to enhance economic integration is dated back to the establishment of the West African Economic Community (CEAO) in 1972 through the conversion of the much older customs and economic integration, union douanier et economique de l’ Afrique de l’ Quest (UDEAO) which was disbanded on the 14th March 1994. The other economic communities are the Mano River Union (MRU) established in 1972 and the Economic Community of West Africa State (ECOWAS), formed in 1975 (ECOWAS, 2010). The major emphasis in creating each of the three communities was the liberation of intra-community trade and regional road network to enhance free flow of resources within the region.
In line with this thinking, progress recorded by these three countries has been mixed. Highpoints of their achievement includes the remarkable advancement in the transportation and telecommunication network through external funding of the costa highway and PAN African Telecommunication Network that now linked the regions (World Bank, 2000, 2006). Notwithstanding the impressive performance recorded, effort to integrate these West African countries to meet the demand of globalization and break the vicious cycle of poverty affecting the region seems impossible to realize. Probably because of poor regional security, diverse in cultures, institutional difficulties and fear of domination caused by elevated political struggles in the region.
Moreover, the external forces in regional integration in Africa have played various roles to either advance the integrative scheme or undermine them. They are positive and negative forces. One of the instruments employed by the positive external forces on the integration scheme in Africa is foreign aid. Some African countries depend on foreign assistance infrastructural development.
Though, there have been divergent views on the effects of foreign aid by various scholars. In the last two decades, reports have indicated that ECOWAS accounts for the rising share in foreign aid inflow globally. The rising rate of foreign aid could be attributed to numeral factors, which includes the decision made by some donor agencies and more advanced countries to provide the means to finance poverty reduction measures, attend to humanitarian needs and bridge the development gap in less developed regions of the world. It should be noted that aid contributes to economic development in two ways. First, aid can accelerate the attainment of a steady-state potential growth rate by a country with limited capital. Second, aid can improve a country’s ultimate steady growth rate because it brings transfer of technology (knowhow) and encourages good governance and practices.
Undoubtedly, the growing influence of China in West Africa and African at large is overwhelming. The Chinese aid assistance has been at an increase with the intent of providing a robust overseas development programme estimated at tens of billions of dollars since 2000. It was revealed, “that at least 70% of China’s overseas aid was sent to Africa from 2000 to 2019”. Though some researchers argue that “Chinese aid substantially improves economic growth”, while others maintain that the huge assistance is geared towards undermining Western efforts to use aids in promoting “democracy and political reform, at a time when the US is pulling back on overseas spending.”
Whereas, the vertical integration of the African economy during the colonial era is a major impediment to the self-reliance and collective economic cooperation of ECOWAS. One of such was monetary cooperation between France, the member states of the CFA Zone formulated in the 1960s in a colonial pact. The CFA franc region epitomizes a state-controlled zone of cooperation based in Paris, from where the priority is the interests of France. The peripheral countries that are members of this zone are economically weak in West and Central Africa.
The operational logic of the CFA currency was entrusted to a common central bank (comprising BCEAO and BEAC). The inscription of African names is deception as it has no economic impact. They are mere bureaucratic institutions whose monetary policies are dependent on French Bank. They merely exist to give the impression that the CFA countries have monetary control over their currencies, which in reality is not the case. The francophone CFA Zone countries have maintained a monetary system arranged by their former colonial master.
The CFA zone economies are relatively very vulnerable. This is occasioned by the operational mechanism of the CFA franc, which is considered to be asymmetric. The monetary solidarity of the CFA zone countries was designed to benefit France. The CFA monetary cooperation has not produced an efficient and major banking/financial system in the CFA countries. For instance, in 1990, of the 107 banks within the CFA countries, 42 were declared bankrupt. To remedy the situation, the banking network was constituted, which increased the tie and strongly dependent on the banks in metropolitan France.
Given the above, France does not encourage external trade bilateral relations of a member CFA with other nations. For instance, when Senegal crude oil was discovered in Saint Louis, the country turned to Venezuela to help in its exploration instead of France. Paris considered this act as a betrayal of cooperation agreements that are tied to all CFA countries, and their resources solely to France. There are other instances, the crisis relating to uranium in Niger, gold in Mali, petrol in Chad, raw materials and the transfer of public utility shares in Cote d’Ivoire, DRCongo, all to protect French interests.
Several efforts have been made since April 20, 2000, in Accra, Ghana, when six leaders of West African countries indicated an interest in proceeding to monetary union among the non-CFA franc countries of the region by January 2003. As planned, the initial step was to guarantee a broader monetary union including all the ECOWAS countries in 2004. To actualize it, the six countries accepted to reduce their central bank financing budget deficits to 10, setting
up a common central bank, among others.
Despondently, one of the impediments has always been whether the French Treasury’s guarantee of convertibility of the CFA to the euro, at a fixed uniformity. The CFA franc is pegged to the Euro and that makes it a challenge to facilitate monetary union among West African countries.
The former President of Nigeria, Muhammadu Buhari while delivering a keynote address in the 57th Ordinary Session of the ECOWAS Heads of State and Government in Niamey, Niger Republic recognized “that some key unresolved issues remained such as delinking the CFA franc of the UEMOA from the Euro” (Aliemen,2020). It is imperative to note that a large part of their foreign reserves of francophone countries is sealed within the French treasury under the colonial-era agreement with France, therefore limiting their ability to enact a meaningful monetary policy in ECOWAS.
Second, while the Economic Community of West African States (ECOWAS) had agreed to embrace a single currency, the francophone countries hastily launched ECO. This action by the francophone countries had caused a division with the other anglophone and luxophone countries in the ECOWAS countries who intended to adopt the new currency but are relatively slow. President Buhari noted that foreign interference and so-called advice may not be in our best sub-regional interest…need for UEMOA to return to the agreed roadmap of the ECOWAS Single Currency by complying with the established framework under the roadmap and cooperate with other member countries in achieving the objectives of the programme.
President Bola Tinubu has emerged as the new chairperson of ECOWAS as he took over from the President of the Republic of Guinea-Bissau, Umaro Mokhtar Sissoco Embalo, who had just finished his tenure at the 63rd Ordinary Session of the Authority of Heads of State and Government. To underscore his commitment towards regional integration, the Nigerian President declared that he would prioritize political stability, peace and security, regional economic integration and strengthening of the ECOWAS institutions, declaring that democracy and good governance remain the abiding cornerstone of peace and sustainable development. While decrying the emerging pattern of coup d’etat in West Africa where soldiers have toppled the popular mandate of the people through barrel of guns, President Tinubu charged ECOWAS to stand firm in defence of democracy.
However, external forces have greatly impacted regional integration in West Africa. The United Nations system, nonviolent state actors, among others have positively promoted regional integration in Africa including foreign national government such as China. Other foreign national government such as France has undermined regional integration of the Economic Community of West African State. France has officially granted political independence to francophone countries in the West African region, yet has strong integrative bond that determines and enjoys all the colonial advantages of pro-independence periods. Paris considers any relationship outside her with francophone Africa as a betrayal. French government controls their monetary policy of the UMOA, a sub monetary organization of eight francophone countries in West Africa. This integrative scheme with Francophone Africa has adversely impacted the ECOWAS monetary policy. This was predicated on the hasty launching of the ECO by the francophone members of the West African Economic and Monetary Union (WAEMU) countries, and this has caused a division with the other Anglophone countries in the 15 ECOWAS Countries who want to adopt the new currency.
Hence, I would recommend that since certain external aids appear to have an abysmal impact on self-reliance, hence, ECOWAS must be selective in accepting foreign assistance. Some of the foreign aids can mortgage the future of the West African sub-region. Second, the francophone African States should reconsider their monetary union with France. The francophone countries should create an independent national currency that is elastic like the supranational organization such as the European Union national currency before the emergence of the euro. This will fast-track the ECO monetary policy of ECOWAS single currency.
Oladeji writes from Lagos
