African Economic Community

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  members of AEC pillar blocs

  states signatories to the AEC Treaty, but not participating in any of the pillars

The African Economic Community (AEC) is an organization of African Union states establishing grounds for mutual economic development among the majority of African states. The stated goals of the organization include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency (see African Monetary Union) thus establishing an economic and monetary union.

Pillars

Currently there are multiple regional blocs in Africa, also known as Regional Economic Communities (RECs), many of which have overlapping memberships. The RECs consist primarily of trade blocs and, in some cases, some political and military cooperation. Most of these RECs form the "pillars" of AEC, many of which also have an overlap in some of their member states. Due to this high proportion of overlap it is likely that some states with several memberships will eventually drop out of one or more RECs. Several of these pillars also contain subgroups with tighter customs and/or monetary unions of their own:

These pillars and their corresponding subgroups are as follows:

Pillar membership

African Union

This article is part of the series: Politics and government of the African Union

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¹ The Arab Maghreb Union does not participate in the AEC so far, because of opposition by Morocco

A clickable Euler diagram showing the relationships between various multinational African organisations.v • d • e

REC pillars of the African Economic Community.

Active REC pillars of the African Economic Community.

Other blocs

Other trade blocs in Africa not part of the African Economic Community.

Other African regional blocs, not participating in the AEC (their members can be part of other regional blocs which do participate), are the following.

• Greater Arab Free Trade Area (GAFTA) (also includes most Middle Eastern states)
• Economic Community of the Great Lakes Countries (CEPGL)
• Indian Ocean Commission (COI)
• Liptako-Gourma Authority (LGA)
• Mano River Union (MRU)

Their membership is as follows:

¹ Only African GAFTA members are listed.
GAFTA is the only bloc not currently stalled.

Goals

The AEC founded through the Abuja Treaty, signed in 1991 and entered into force in 1994 is envisioned to be created in six stages:

1. (to be completed in 1999) Creation of regional blocs in regions where such do not yet exist
2. (to be completed in 2007) Strengthening of intra-REC integration and inter-REC harmonisation
3. (to be completed in 2017) Establishing of a free trade area and customs union in each regional bloc
4. (to be completed in 2019) Establishing of a continent-wide customs union (and thus also a free trade area)
5. (to be completed in 2023) Establishing of a continent-wide African Common Market (ACM)
6. (to be completed in 2028) Establishing of a continent-wide economic and monetary union (and thus also a currency union) and Parliament

• End of all transition periods: 2034 at the latest

Parts of this article (those related to pre-2012 deadlines) are outdated. Please update this article to reflect recent events or newly available information. Please see the talk page for more information. (November 2010)

Stages progress

as of September 2007

• Stage 1: Completed, only Arab Maghreb Union members and Sahrawi Republic not participating. Somalia is participating, but no practical implementation as of yet.
• Stage 2: Steady progress, nothing factual to check.
• Stage 3:

¹ Members not yet participating: DR Congo (in talks to join), Eritrea, Ethiopia, Seychelles (in talks to join), Swaziland (on derogation until SACU gives permission for Swaziland to join the FTA), Uganda (to join very soon)[1]
² Members not yet participating: Angola, DR Congo, Seychelles [2]

• Stage 4: no progress yet
• Stage 5: no progress yet
• Stage 6: no progress yet

Overall progress

¹ not all members participating yet
² telecommunications, transport and energy - proposed
³ sensitive goods to be covered from 2012

Africa Free Trade Zone

The Africa Free Trade Zone (AFTZ) is a free trade zone announced at the EAC-SADC-COMESA Summit on Wednesday October 22, 2008 by the heads of Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). The African Free Trade Zone is also referred to as the African Free Trade Area in some official documents and press releases.

Signing

The leaders of the three AFTZ trading blocks, COMESA, EAC, and SADC, announced the historic agreement, an agreement aimed to create a single free trade zone to be named the African Free Trade Zone, consisting of 26 countries with a GDP of an estimated $624bn (£382.9bn). It is hoped that the African Free Trade Zone agreement would ease access to markets within the AFTZ zone and end problems arising from the fact that several of the member countries in the AFTZ belong to multiple regional groups.

The African Free Trade Zone announced at the EAC-SADC-COMESA Summit (also known the AFTZ Summit and Tripartite Summit) effectively is the realization of a dream more than a hundred years in the making, a trade zone spanning the length of African continent from Cape to Cairo, from North African Egypt all the way to the southern-most tip of Africa in South Africa (Cape Town). The Cape to Cairo dream was envisioned by Cecil Rhodes and other British imperialists in the 1890s and was expressed in different contexts and versions including, but not limited to, the following ideals: Cape to Cairo Road, Cape to Cairo Railway, Cape to Cairo Telegraph, and Cape to Cairo Trade Union.

While other powers, notably Germany and Portugal had colonies or spheres of influence in the Cape to Cairo trade zone contemplated, the primary benefactor of the Cape to Cairo union would have been the Great Britain and British Empire. The biggest difference in the idea of the original Cape to Cairo zone and its current incarnation is that the African Free Trade Zone is the creation of African Countries for the mutual benefit and development of the AFTZ member countries, their peoples and the whole of continent of Africa rather than a trade zone for the benefit of Great Britain. Ultimately, it is hoped the AFTZ would serve as a key building block to African Unity and the realization of a united Africa under the auspices of the African Union.

Another important difference between the original and current ideal is that the AFTZ encompasses an area greater than the one even Cecil Rhodes could have imagine. The original Cape to Cairo idea in Cecil Rhodes' time and now under the AFTZ is a free trade zone spanning the whole continent from Cape Town in South Africa to Cairo in Egypt. Cecil Rhodes' Cape to Cairo would have involved at most a dozen countries. The current rendition of the Cape to Cairo zone actualized by the AFTZ encompasses most of Africa, almost half of the countries (26 out of 54), more than half of the production, trade, population, land mass and resources. If it actualizes its potential and becomes a truly integrated economic union, the AFTZ could actually rival any other economic union with its vast natural resources, huge markets, young population, and great technical know-how (mostly courtesy of SADC in general and the Republic of South Africa in particular).

In addition to eliminating duplicative membership and the problem of member states also participating in other regional economic cooperation schemes and regional political and security cooperation schemes that may compete with or undermine each other, the African Free Trade Zone further aims to strengthen the AFTZ block's bargaining power when negotiating international deals.

Analysts believe that the African Free Trade Zone agreement will help intra-regional trade and boost growth.^[6]

The AFTZ is considered a major step in the implementation of the AEC, an organization of African Union states establishing grounds for mutual economic development among the majority of African states. The stated goals of the AEC organization include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency thus establishing an economic and monetary union for the African Union.

The trade blocs

The three trade blocs that agreed to and make up the AFTZ, the COMESA, the EAC and the SADC, are already well-established in their own right and cover varying swathes of land, economic systems, political systems and a varied number of peoples (which includes Arabs in the North, multi-racial peoples in the East and South, including significant numbers of Africans of European descent, Asian Africans, including Indians, Chinese and other Asian groups as well as Colored Africans—mixed race Africans numbering millions in South Africa). Many of the membership of the three AFTZ member trade blocks overlap with several countries being a member of more than one of the AFTZ member trade blocks as well as a member of other alliances within and without the three trade blocks.^[7]

COMESA

The Common Market for Eastern and Southern Africa (COMESA) traces its genesis to the mid 1960s. The idea of regional economic co-operation received considerable impetus from the buoyant and optimistic mood that characterised the post-independence period in most of Africa. The mood then was one of pan-African solidarity and collective self-reliance born of a shared destiny. It was under these circumstances that the United Nations Economic Commission for Africa (ECA) convened a ministerial meeting of the then newly independent states of Eastern and Southern Africa in 1965 to consider proposals for the establishment of a mechanism for the promotion of sub-regional economic integration. The meeting, which was held in Lusaka, Zambia, recommended the creation of an Economic Community of Eastern and Central African states.

An Interim Council of Ministers, assisted by an Interim Economic Committee of officials, was subsequently set up to negotiate the treaty and initiate programmes on economic co-operation, pending the completion of negotiations on the treaty.

In 1978, at a meeting of Ministers of Trade, Finance and Planning in Lusaka, the creation of a sub-regional economic community was recommended, beginning with a sub-regional preferential trade area which would be gradually upgraded over a ten-year period to a common market until the community had been established. To this end, the meeting adopted the Lusaka Declaration of Intent and Commitment to the Establishment of a Preferential Trade Area for Eastern and Southern Africa (PTA) and created an Inter-governmental Negotiating Team on the Treaty for the establishment of the PTA. The meeting also agreed on an indicative time-table for the work of the Intergovernmental Negotiating Team.

After the preparatory work had been completed a meeting of Heads of State and Government was convened in Lusaka on 21 December 1981 at which the Treaty establishing the PTA was signed. The Treaty came into force on 30 September 1982 after it had been ratified by more than seven signatory states as provided for in Article 50 of the Treaty.

The PTA was established to take advantage of a larger market size, to share the region's common heritage and destiny and to allow greater social and economic co-operation, with the ultimate objective being to create an economic community. The PTA Treaty envisaged its transformation into a Common Market and, in conformity with this, the Treaty establishing COMESA was signed on 5 November 1993 in Kampala, Uganda and was ratified a year later in Lilongwe, Malawi on 8 December 1994.

It is important to underline the fact that the establishment of PTA, and its transformation into COMESA, was in conformity with the objectives of the Lagos Plan of Action (LPA) and the Final Act of Lagos (FAL) of the Organization of African Unity. Both the LPA and the FAL envisaged an evolutionary process in the economic integration of the continent in which regional economic communities would constitute building blocks upon which the creation of an African Economic Community would ultimately be erected.

The Member States of COMESA are as follows:

Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe.

COMESA’s Vision is to “be a fully integrated, internationally competitive regional economic community with high standards of living for all its people ready to merge into an African Economic Community.”

East African Community

The East African Community (EAC) is the regional intergovernmental organization of the Republics of Burundi, Kenya, Rwanda, Uganda and Tanzania with its Headquarters in Arusha, Tanzania. The Treaty for Establishment of the East African Community was signed on 30 November 1999 and entered into force on 7 July 2000 following its ratification by the original three Partner States – Kenya, Uganda and Tanzania. Rwanda and Burundi acceded to the EAC Treaty on 18 June 2007 and became full Members of the Community with effect from 1 July 2007.

The EAC was originally set up in 1967. However, disagreements between the original founding members, Uganda, Kenya and Tanzania, led to its collapse. The 30 November 1999 treaty was signed for its re-establishment and the new EAC came into being in 2000, reincarnated as a more mature group. The EAC is one of the more naturally homogenous of the African trade blocks given the prevalence of Swahili as a common language in its member countries as well as their long history of regional cooperation, even going back to colonial times.

The EAC aims at widening and deepening co-operation among the Partner States in, among others, political, economic and social fields for their mutual benefit. To this extent the EAC countries established a Customs Union in 2005 and are working towards the establishment of a Common Market by 2010, subsequently a Monetary Union by 2012 and ultimately a Political Federation of the East African States.

With the enlargement of the Community in 2007, the EAC really became energized. The realization of a large regional economic bloc encompassing Burundi, Kenya, Rwanda, Tanzania and Uganda with a combined population of 120 million people, land area of 1.85 million sq kilometres and a combined gross domestic product of $41 billion, "bears great strategic and geopolitical significance and prospects of a renewed and reinvigorated East African Community." See EAC website.

The regional integration process is at a high pitch at the moment. The encouraging progress of the East African Customs Union, the enlargement of the Community with admission of Rwanda and Burundi, the ongoing negotiations of the East African Common Market as well as the consultations on fast tracking the process towards East African Federation all underscore the serious determination of the East African leadership and citizens to construct a powerful and sustainable East African economic and political bloc.

The vision of the EAC is similar to that of the COMESA to “be a fully integrated, internationally competitive regional economic community with high standards of living for all its people ready to merge into the African Economic Community.”

Southern African Development Community

The Southern African Development Community (SADC) is the largest, arguably the most integrated and possibly the most successful of all of the African trade blocks (in terms of regional cooperation and the mutal benefit of the members. While South Africa may be the driving force behind a lot of SADC's economic integration, all member countries seem to have greatly benefited. Out of many truly came an organization greater than the sum of its parts. Several SADC countries have the highest GDP in Africa.

The Southern African Development Community has been in existence since 1980, when it was formed as a loose alliance of nine majority-ruled States in Southern Africa known as the Southern African Development Coordination Conference (SADCC), with the main aim of coordinating development projects in order to lessen economic dependence on the then apartheid South Africa. The founding Member States are: Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.

SADCC was formed in Lusaka, Zambia on April 1, 1980, following the adoption of the Lusaka Declaration - Southern Africa: Towards Economic Liberation.

The transformation of the organization from a Coordinating Conference into a Development Community (SADC) took place on August 17, 1992 in Windhoek, Namibia when the Declaration and Treaty was signed at the Summit of Heads of State and Government thereby giving the organization a legal character.

The SADC Member States are as follows:

Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, United Republic of Tanzania, Zambia, and Zimbabwe.

The SADC covers a population of some 248 million people and a zone whose combined GDP is $379bn in 2006.

SADC headquarters are located in Gaborone, Botswana.

Historic significance of the AFTZ

The EAC-SADC-COMESA Summit is considered historic because for the first time, since the birth of the African Union, several key building blocks of the AEC have met on how to integrate territories and moving towards deepening and widening integration within the overall Abuja Treaty for the establishment of the AEC. Further, for the first time a truly transcontinental union came into being, ranging from the North to the South of the continent. The AFTZ (EAC, COMESA and SADC) currently have a combined population of 527 million and combined GDP of US$625 billion. In size and capacity, the AFTZ rivals most trade blocks. The only question is whether the AFTZ will fully integrate or simply be another one of those "feel good" African organizations with lofty goals but little results.

The SADC is the largest of the AFTZ member trade blocks and covers a population of some 248 million people and a zone whose cumulative GDP is $379bn in 2006.

COMESA, established in 1994 as a replacement for the Preferential Trade Area, includes 398 million people and the area has a combined GDP of US$286.7bn in 2006. Among its members are Zimbabwe, Zambia, Uganda and Sudan.

The EAC, the smallest of the member trade blocks in terms of GDP, had a GDP of US$46.6bn in 2006.

Members countries of the AFTZ

The AFTZ membership includes the following countries:

Angola, Botswana, Burundi, Comoros, Djibouti, Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Lesotho, Libya, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, Swaziland, South Africa, Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.

The only natural member of the AFTZ not included was Somalia, due to the civil war that has left most of that country without a functioning government.

AFTZ Summit Presidents

The AFTZ Summit, also referred to as the Tripartite Summit was opened and attended by six African heads of state representing the member trade groups. Attending the opening session on Wednesday were presidents Yoweri Museveni of Uganda, Paul Kagame of Rwanda, Robert Mugabe of Zimbabwe, Kgalema Motlanthe of South Africa, Jakaya Kikwete of Tanzania and Kenya's Mwai Kibaki.

Attendance of the AFTZ Tripartite Summit

The AFTZ Tripartite Summit was attended by the following Heads of State and Government:

• His Excellency, Mr. Yoweri Kaguta Museveni, President of the Republic of Uganda

• His Excellency, Mr. Mwai Kibaki, President of the Republic of Kenya

• His Excellency, Mr. Kgalema Motlanthe, President of the Republic of South Africa

• His Excellency, Mr. Jakaya Mrisho Kikwete, President of the United Republic of Tanzania

• His Excellency Mr Paul Kagame, President of the Republic of Rwanda

• His Excellency Mr Robert Gabriel Mugabe, President of the Republic of Zimbabwe

• Right Honourable Pakalitha Mosisili, Prime Minister of the Kingdom of Lesotho

• His Excellency, Gabriel Ntisezerana, Second Vice President of the Republic of Burundi

• Right Honourable Dr Sibusiso Barnabas Dlamini, Prime Minister of the Kingdom of Swaziland.

The following Plenipotentiaries represented the Heads of State and Government of the following countries:

• Honourable Olivier Kamitatu Etshou, Minister of Planning, Democratic Republic of Congo;

• Honourable Rifki Abdoulkader Bamakhrama Minister of Trade, and Industry, Republic of Djibouti;

• Honourable Dr Osman Mohamed, Minister of Economic Development, Arab Republic of Egypt

• Honourable Dr. Ali Abd Alazziz Alsawi, Secretary General of Economy, Trade and Investment, Great Socialist People’s Libyan Arab Jamahiriya

Honourable Mrs. Joyce Banda, Minister of Foreign Affairs, Republic of Malawi

• Honourable Arvind Boolell, Minister of Foreign Affairs, Regional Integration and International Trade, Republic of Mauritius;

• Honourable Antonion Fernando, Minister of Trade and Industry, Republic of Mozambique

• Honourable Bradford Machila, Minister of Lands and Special Representative of His Honour the Vice President and Acting President of the Republic of Zambia

• Honourable Honourable Joaquim Duarte da Costa David, Minister of Industry Republic of Angola

• Honourable Neo D. Moroka, Minister of Trade and Industry of the Republic of Botswana

• Honourable Patrick Pillay, Minister of Foreign Affairs of the Republic of Seychelles

• His Excellency Hassan Ibrahim Gadkarim, Ambassador of the Republic of Sudan to Republic of Uganda, Republic of Rwanda and Republic of Burundi

• His Excellency Wilfried I. Emvula, Ambassador and Permanent Delegate to the African Union and the Economic Commission of Africa, Republic of Namibia

• His Excellency Salih Omar Abdu, Ambassador of the State of Eritrea to Republic of Kenya, Republic of Uganda and United Republic of Tanzania

• His Excellency Dr. Denis Andriamandroso, Ambassador of the Republic of Madagascar to the Republic of South Africa

• His Excellency Ambassador Clifford Sibusiso Mamba, Permanent Secretary, Ministry of Foreign Affairs and Trade, Kingdom of Swaziland

The following organisations were represented at the Tripartite Summit by their officials :

• H.E. Erastus J.O. Mwencha, Vice Chairperson, African Union Commission;

• Mrs. Lalla Ben Barka; Deputy Executive Secretary, UNECA;

• Mr. Mtchera J. Chirwa, African Development Bank;

• Dr. Kasaija Apuuli, IGAD; and Ambassador Liberata Mulamula, Executive Secretary, International Conference on the Great Lakes

Also in attendance were Chief Executive Officers of the

• COMESAMr. Erasturs Mwencha, Executive Secretary of COMESA

• EAC Amb. Juma Mwapachu

• SADC Dr. Tomaz Augusto Salomao, Executive Secretary, SADC.

SA President on AFTZ

President Kgalema Motlanthe of South Africa speaking in Kampala, Uganda, at a meeting of Africa's three regional economic communities, argues that the AFTZ is an important step in the integration of African economies and the eventually union of the continent. With the great uncertainty in the global economy following the food and energy price increases and, more recently, the upheavals in the financial markets, Motlanthe suggested that the advent of the AFTZ could not have been any more timely.

While African and other developing countries had marginal influence over the decisions that had brought the international financial system to the brink of collapse, unjustifiably, the poor and vulnerable of these countries would bear the brunt of the economic downturn.

"It is imperative that effective remedial measures are developed to mitigate the negative impact of the crises, and developing countries must now be included in the governance of international financial institutions," Motlanthe said. At the same time, it was necessary to work towards a more equitable global trade regime that put the concerns of developing countries, including African countries, at its centre. He also urged that the Common Market for Eastern and Southern Africa (Comesa), the Eastern African Community (EAC), and Southern African Development Community (SADC), increase co-operation towards greater integration. "The process we embark upon today marks a historic step towards fulfilling our obligations under the African Union and the Abuja Treaty framework of continental integration, which recognises that Regional Economic Communities are the building-blocks for the African Economic Community." The time had come for Comesa, EAC and SADC to bring together their respective regional integration programmes to further enlarge their markets, unlock productive potential, increase the levels of intra-Africa trade, and enhance developmental prospects. "As a next step in expanding regional markets in Africa, the process we launch today will place us in a stronger position to respond effectively to intensifying global economic competition and will begin to overcome the challenges posed by multiple memberships of regional organisations. "Let us therefore take the necessary decisions to work systematically and with determination to establish a single free trade area that will weld together our three regions into one,"

See also

• African Economic Outlook
• Economy of Africa
• Economy of the African Union

References

• A single African currency in our time?
• African leaders agree to form single market
• African Union Official Website
• South African webpage on RECs
• Pan-African Perspective