Bountiful in resources and plagued by conflicts, Africa still has a long way to go before economic integration, Rehab Ahmed reports Creating an integrated common African market appeals to most African countries, but the task is daunting. The African continent is home to 13 per cent of the world's population, which is expected to rise from 950 million to 1.8 billion by 2050. This is one reason why Global Trade Matters (GTM), a Cairo-based forum on international trade agreements, organised a round table discussion on the future of private investment in Africa. The round table on doing business with Africa focussed on the future of the continent's economic unity, and identifying some of the problems faced by the private sector investing on the continent. African nations, realising the importance of economic unity in dealing with internal economic problems, have founded many economic communities. The most notable are the African Unity (AU), the Economic Community of West African States (ECOWAS), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of Central African States (ECCAS) and Southern Africa Development Community (SADC). However, with respect to economic achievements, many of these integration schemes are perhaps nothing more than free trade arrangements. South Africa's Ambassador to Cairo Sonto Kudjoe believes that Africa should not always wait for foreign investments, but work on increasing inter- trade on the continent. Speaking at a round table discussion in Cairo two weeks ago, Kudjoe cited several potential trade relations. In terms of commodities, she said, Egypt could export cotton and has a strong petrochemical sector; South Africa is distinguished by its mineral, auto-motive industry and IT sectors; while the Ivory Coast is a major producer of cocoa. According to Ashraf Naguib, managing director of GTM, already existing African Regional Economic Communities (RECs) are very weak, and overall are not achieving their targets. "However, this rule cannot be generalised since SADC and COMESA are seen as the essential building blocks for the integration and economic development of the African continent," stated Naguib. He added that these are the most appropriate political structures providing pertinent geographical scale to implement policies aimed at transforming the social, economic and political well-being of the African continent. "I believe that inter-African directed investment is needed, but most African countries have economic complexities," he said. African economic integration unions should be judged independently, since each has its own peculiarities, but generally, coordinated efforts and funds are needed. "Regional economic unions are doing well in one area or the other," noted Kudjoe. "SADC has strong infrastructure and good transportation which helps countries trade easily among it." On the other hand, she continued, "we face a situation of duplicating efforts because of overlapping membership between SADC and COMESA." South Africa's ambassador further explained that projects of the same nature are duplicated as well. "The lack of coordination among regional entities raises the question of how much Africans can really benefit from them," Kudjoe stated. "If they integrate they would be able to consolidate their resources and focus their efforts." For his part, Bassel Hussein, chief investment officer at IT Ventures, underlined that African regional blocs need to further involve the private sector and be more empowered via activating already existing associations. Naguib concurred, saying that, "African leaders should make use of private sector funds to help develop infrastructure projects." But Hussein pointed out that the major challenges facing the private sector in Africa are the political risks represented in internal and external wars, conflicts and riots, as well as shaky regulatory laws. "When the private sector goes to invest in any African country, it needs to have solid and binding agreements with local governments," he said. Political instability and armed conflicts drive back local, neighbouring and international private investors. Ambitiously, Hussein suggested that warring nations should end all conflicts in order to make use of the continent's mineral and human resources, as well as raw materials. He noted that politically stable countries -- such as Egypt, Tunisia, Morocco and South Africa -- attract foreign investments and their economies are doing well. On the other hand, Hussein continued, countries like Kenya, Senegal, Nigeria, Mozambique and the Ivory Coast are emerging economies, while Central Africa still has a long way to go in achieving political constancy and eventually appealing to foreign ventures. As stated, there are various levels of economic development in terms of regions and countries which will impact how fast Africa moves towards economic integration. Hebatallah El-Serafi, from the Research and Development Department at the Cairo Stock Exchange, emphasised that most African countries have neither efficient microeconomics, currency convertibility nor a unified currency. Africa's frail infrastructure is usually cited as another major hurdle on the road to African economic integration. Focussing on Egypt, Naguib argued that, "Egypt itself does not have a reliable internal infrastructure. Consequently, trade between northern and southern Egypt is lacking, as is trade with Sudan, or even further south." GTM's managing director further pointed out the fact that Egyptians define themselves as Arabs, Muslims, Mediterraneans, and finally as Africans. "This means that they do not focus on their African identity as much as South Africans do," Naguib said. El-Serafi suggested that African countries should begin by establishing bilateral cross- listing and cross-trading agreements and regional blocs. This will be the focal point for a pan- African common market capable of competing with the Chinese, for instance, on the African and global arena. But obstacles facing African economic unity will not vanish overnight, especially that each nation needs to individually decide its requirements and priorities before being part of an African entity. In the belief that Africa must play a more active role in the era of globalisation, the African Union (AU) is developing a strategic economic partnership with Asia, India, China and Europe. Kudjoe noted that, "we are now, as a multilateral body representing the African continent, have multilateral agreements with other countries."
