Transformative regional integration could be achieved through collaboration between countries rather than through economic competition, economists and policymakers said yesterday.
This was during a policy dialogue on regional integration organised by the Office for Eastern Africa of the UN Economic Commission for Africa (ECA), in collaboration with the University of Bremen in Germany, at the Kigali Convention Centre.
Dr Thomas Kigabo, chief economist at the National Bank of Rwanda (BNR), noted that the Brexit is “a very interesting example and experience.”
Throughout the initial session, examples were drawn from Britain’s exit from European Union (Brexit) and, like the other economists present, Kigabo could not pin down with certainty the likely implications but noted that these could be normal.
Kigabo said: “I think that on a negative note, this [Brexit] may give some argument to some countries which want to exit regional integration. It’s really a very bad example because we have been considering the EU as a good model for integration.
“Definitely, experience is showing us that it is not a good model. It has its own weakness and the reality is that UK has decided to go out. This may have negative impact on our own efforts to have our own economic bloc.”
The lesson learnt from the faltering regional integration process in Europe, he said, is that when countries are negotiating a similar protocol or agreement, they need to avoid “copy-and-paste” and be sure that when they decide to establish a regional economic bloc, they also put in place protection mechanisms to ensure that it is intact.
Brexit and EAC
Discussing Brexit’s potential impact on the East African Community (EAC), Andrew Mold, acting director of the Office for Eastern Africa of ECA, explained that it might be reduced though levels of UK’s official development assistance (ODA) to East Africa might be affected.
Mold said: “One of the consequences of Brexit has been the change in outlook of British domestic politics. The previous conservative government, under David Cameron, was actually very supportive of ODA.
“I think that possibly will change under the new government of Theresa May, particularly because you have someone in charge of DFID who has been very critical of overseas development. There are chances that there will be a reassessment of development cooperation.”
Mold, who also noted that a number of things were “thrown up in the air” by the Brexit, including Economic Partnership Agreements (EPAs) with the East African Community, said there will be the possibility that the UK suffers from the situation.
“Trade is not going to stop between the UK and the EU because of Brexit,” he said, noting that it is only the conditions under which trade happens that will change.
Last month’s signing of EPA with the EU by trade ministers of Rwanda and Kenya was regarded as a step in the right direction, by business leaders and government officials from the two EAC partner states.
Burundi, Tanzania, Uganda, and the new EAC member, South Sudan, are yet to put pen to paper.
However, in July, Tanzania announced it would not sign, citing the “turmoil” that the EU is experiencing following Britain’s decision to exit the EU.
Amb. Ali Idi Siwa, Tanzanian envoy to Rwanda, noted that the position of his country is well known.
He said: “We have not signed, and we did not say that we are not going to sign but we are giving ourselves time.”
The envoy gave reasons, including that the industrialisation plan for Tanzania is to go beyond import substitution and produce goods both for home consumption and export purposes.
“We have a feeling that that the EPA may jeopardise this position. So we gave ourselves time to have a closer look at this scenario so we can come up with a decision which is good for both Tanzania and the east African region,” Amb. Siwa added.
Richard Kabonero, Uganda’s envoy to Rwanda, said: “Definitely, we negotiated as a region. The commission we negotiated with is no longer in place. It looks like there are some changes there [in the EU]. The exit of the United Kingdom has a big impact. We need time to look at all the clauses. Even the EAC itself has changed, with the entry of South Sudan.”
EAC Heads of State have since asked for more time for further consultations on the proposed trade deal.
The purpose of the policy dialogue was to debate and discuss recent research on regional integration and consider the latter’s strategic implications on policy.