How best can the EU support the new AU Key Questions for Contact Person
- 1. Political credibility
- . What conditions are required to make the AU into a strong and credible organisation that Africans believe in and feel proud of it ?
- . Are there any things that I would identify that the AU should do differently from the OAU to ensure a clear break with the past, and what aspect of the OAU tradition would I feel should be kept?
- 2. Strategic niche & added value
- · In what areas do I think there is added value in having a pan-African institution such as the AU?
- · While NEPAD had different origins than the AU, efforts are now being made to integrate it as a Programme of the AU – do I think this is the right approach and would I have any recommendations on the links between the AU and NEPAD?
- · What do I really expect the AU to deliver?
- 3. Process of Policy formulation
- · What conditions are required to ensure genuine ownership of the AU by Africans and what institutions do I feel should be directly involved in the AU structures and process?
- · How do I see the emerging pattern of multiple layers of governance – municipal, national, regional and continental – in Africa ; are these levels too numerous ? How should they divide up tasks?
- · How do I feel the AU should go about ensuring that African people are able to participate effectively in the AU?
- 4. Sustainability
- · How can the AU institutions be made sustainable?
- · How can we ensure the AU can command the human and financial resources it will need?
- · The AU Constitutive Act provides for a whole series of institutions (Assembly, Executive Council, Commission, Parliament, Economic social & Cultural Council, Court of Justice, financial institutions, etc) – do I have any thoughts on which should be given the highest priority and what the sequencing should be in the establishment of these institutions ?
- · Where should the financing for the AU structures come from?
- . How can dependence on external or powerful interests be avoided?
- 5. Role of external support
- . If the AU is to be genuine African institution what role should external donors, such as the European Commission, play in supporting the AU?
- 6. Role AU could play in my field
- . What constructive role or useful contribution do I see the AU making in my area of work?
- (i) absence of a strong motivation and a real commitment on the part of the African leadership;(ii) for their own cooperation and union, African rulers signed treaties that they could not implement. On the other hand, treaties detrimental to the interests of their people have been signed with former colonial powers by most African leaders;
- (iii) lack of resources and absence of a proper and unified budgeting system;
- (iv) the use of a global and bureaucratic approach rather than a step by step approach to unity;
- (v) the continuous interference in African political and economic matters of former colonial powers with their own objectives about the international labour division, which remains based on the exploitation of Africa as a supplier of basic products and raw materials rather than on the quest for its development;
- (vi) the prevalence of country based approaches to project financing and the lack, on the part of the donors, of coordination at the regional level, with regards to the implementation of structural adjustment programs;
- (vii) the fact of recycling retired and failed politicians and patronage as a way of renewing human resources.
The creation of the AU in replacement of the OAU, seems to be a mere reproduction of the institutions of the EU. That would mean overlooking the fact that, beside being born from a combination of totally different circumstances, the EU has adopted, since the signing of the Treaty of Rome in 1957, a steady step by step approach in building institutions, which led to landmark results in the areas of customs unions, single market, economic integration, EMS, Monetary Union, increased membership, etc. Such a copy carbon approach would mean that nothing has been learnt from the past and that pitfalls that befell precedent experiences would not be avoided.
In my view, the AU as articulated in its present form should be basically viewed as a projection of a new vision for the future, with the strategy to achieve it still to be defined. It is on this understanding that I endeavour to respond to your questionnaire.
1. Political credibility
. What conditions are required to make the AU into a strong and credible organisation that Africans believe in and feel proud of it ?
- genuine motivation and political commitment from the African leadership and from the International community as well;
- involvement of the elite and the masses (Professional associations, Trade unions, NGOs, Civil societies movements, Academics, Students etc.) in formulating policies and strategies ( for suggestions on how to achieve such involvement in setting up AU clubs, please see suggestions in response to question : How do I feel the AU should go about ensuring that African people are able to participate effectively in the AU?);
- the restructuring of existing sub-regional groupings involved in regional cooperation and integration in order to increase the volume of intra-Regional trade.
To that end, the emphasis should be put on the creation of an “Organisation for Economic Cooperation” with the aim to dismantle quantitative restrictions on intra-African trade. The second priority would be the creation of an”African Payments Union” to finance intra-regional trade. The third priority would be the establishment of”Clearing Houses”. These institutions have to be strong, independent and well endowed with sufficient and readily available resources. The fourth priority will concern monetary cooperation with an emphasis put on stable exchange rates and improvements in the area of monetary policy coordination and currency convertibility.
It is worth mentioning, in this respect, the particular case of the CFA franc whose existence as a colonial relic, has a nullifying effect on current policies to strengthen UEMOA and UDEAC. Under colonial times, the French colonies in these areas were operating as two distinctive Federation of States and the CFA franc was their common currency. On achieving independence, these countries undertook immediately to dismantle the federal structure in which they were operating and erected trade barriers between them. Paradoxically, they kept the CFA as their common currency and agreed to surrender the management of 65% of their foreign exchange reserves to the French Treasury in exchange for the convertibility of the CFA. France was also given the right of veto whenever the special account in which these funds were kept was overdrawn. Furthermore, since these former French colonies were no longer trading among themselves, the CFA money supply was mostly based on the volume of their trade with France.
This political decision, which suited France and the governing African elite created an unsuitable economic environment for development and was, among other negative elements, a recipe for unabated flight capital and the main reason why these former French colonies remained plagued with appalling poverty worsened by the devaluation of the franc CFA in January 1994. No wonder than, in spite of their common currency and, their traditional links market integration and intra-trade have not significantly advanced.
There is, obviously, a need to review and reform the whole system if any headway is to be expected in their attempts to build economic and monetary unions
4. selective measures of protection and capital control in the consolidation phase of the process;
5. Resolution of the African debt issue. It is worth remembering Keynes’ recommendation with regard to West Germany’s debt after the 2nd World war: “to make a bonfire with Germany’s debt to the allies”. If this recommendation were not implemented, the concessionary loans of the Marshall Plan provided by the USA, proper subvention mechanisms and capital controls set in place, Europe would not have existed.
. Are there any things that I would identify that the AU should do differently from the OAU to ensure a clear break with the past, and what aspect of the OAU tradition would I feel should be kept?
For the first part of the question, the answer is pragmatism, flexibility, step by step strategy to economic integration in addition to true motivation, political commitment, strong and competent leadership, long term planning and accountability.
But a clear departure from the OAU’s previous profile as an exclusively political organisation, a “Club of Head of States”, with the role of the Secretary General reduced to that of a Chief of Protocol is a sine qua non condition, if the AU is to succeed. However, this breakaway with the past should go hand in hand with that of the International community in its treatment of Africa as a continent doomed to be exploited and not developed. The West should realise that the development of Africa is in its own interest.
With regard to what practices should the AU avoid in order to break with the past, please, also refer to questions raised in the Background Chapter at the beginning of this paper.
For the second aspect of the question, the breakdown of the Continent into sub-regional Organisations is to be maintained.
2. Strategic niche & added value
· In what areas do I think there is added value in having a pan-African institution such as the AU?
- expanded market and expanded economic possibilities;
- increased efficiency and economies of scale;
- extended bargaining power and better prospects for intra-trade oriented growth;
- better understanding between peoples and readiness to accept diversity and considering it as an asset rather than a liability;
- deepening sense of solidarity, organisation, method, respect for order and responsibility;
- peace and healing of centuries long humiliation;
· While NEPAD had different origins than the AU, efforts are now being made to integrate it as a Programme of the AU – do I think this is the right approach and would I have any recommendations on the links between the AU and NEPAD?
NEPAD development strategy is based on neo-liberal politics which require an environment that Africa does not have. Industrial growth was under 1% in the 1990s (compared with 8% in the 1960s).Transport, insurance and telecommunications costs are the highest in the world which contributes to increase the lack of competitiveness of the Continent. Africa’s share of world trade fell from 3% in 1990 to just over 1%, the total of which being basic products and raw materials and not manufactured goods. Africa has no access neither to technology and know-how nor to international capital markets. Africa attracted only $1.1 billion of direct inflows in 2000 with three countries: Nigeria, Angola and Mozambique receiving the lion’s share of it. The investments were made to finance exploitation of natural resources. This is not this kind of policies that will sort out Africa’s problems.
In the face of the appalling poverty which characterises Africa, what is needed is not a neo-liberal medicine but a rebuilding based on Keynesian economics. However, no one would question the need to involve the private sector in any development, when properly channelled. The private sector can bring about productive investments in a Continent where investment is in short supply. It can also increase efficiency, provide jobs and good management practices. It is in that context that links between the AU and NEPAD can be envisaged in addition to good governance. The A.U. must take the lead in scrutinizing all the aspects and implications of NEPAD in order to amend the counterproductive aspects of NEPAD with regard to Africa’s interests, coordinate, monitor and control the interventions of the international community within the framework of this program. To that end, the NEPAD secretariat should be under the umbrella of the A.U.
· What do I really expect the AU to deliver?
The AU must be the centre that links all sub-regional groupings and AU clubs with regard to strategy, policy coordination, harmonisation of macro-economic and sectored policies, initiating debates, forums, workshops, active participation of the African populations, the members of the Diaspora, the private sector and the International community, innovating in such areas as how to solve the African debt problems, proposing reorientation of the Bretton Woods, the African Development Bank, the EU and others lenders lending programmes to shift from country based to regional coordinated financing.
The AU should also ensure that a unified budgeting system is in place to allow a smooth functioning of entities such as sub-regional Organisation for Economic Cooperation, the African Payments Union, the sub-regional Clearing Houses and the Compensatory mechanisms in securing concessionary loans and grants from the international community and borrowing in the capital markets at the most favourable conditions.
On the Political side, the AU should set the criteria and create a surveillance system for democratic elections. It should treat the end of ethnic slaughtering, nepotism, tribalism as a priority area of action. Suitable control systems should be put in place to stop and correct any failure to meet the set criteria by any means necessary, including suspension of membership or exclusion of culprit countries without exception. Emphasis should be put on quality rather than quantity and as the experience of the EU demonstrates the smaller, the better in the first phase of consolidation of partial or complete union. Success of the core members in delivering economic progress is the best incentive for other countries to follow suit.
Peace keeping should also be part of the AU mandate with a rapid deployment force equipped and trained with the help of the International community providing air cover and other facilities whenever necessary. A pan-African peace keeping army will gain experience, enforce peace, discipline, solidarity, organisation, responsibility and order. It will sideline warlords, incompetent despots and corrupt leaders, eradicate tribalism and contribute to political union.
3. Process of Policy formulation
· What conditions are required to ensure genuine ownership of the AU by Africans and what institutions do I feel should be directly involved in the AU structures and process?
The owners of the AU are the people of the Member States. African integration cannot progress without the active participation of the African populations and the members of their Diaspora. But States have the prime responsibility to devise ways and means to secure the adhesion of theses groups, to meet their obligations and to abide by the treaties they sign. There must be in every country a policy and a strategy of Communication directed to the people that would relay and translate the objectives and the action of the A.U. to create the wide support that the O.A.U. did not manage to have.
The institutions that should be directly involved in the AU structures and processes are: the UN security council ( please refer to the role that might be assigned to the security council in response to question : Where should the financing for the AU structures come from ?), the UN Economic Commission for Africa, Representatives of the sub-regional groupings, African trade unions, employer’s organisations, consumer groups, chambers of commerce, AU clubs, etc.
· How do I see the emerging pattern of multiple layers of governance – municipal, national, regional and continental – in Africa ; are these levels too numerous ? How should they divide up tasks?
Experience in Europe has highlighted the importance of the principle of subsidiarity. Each issue has to be dealt with at the appropriate level with the understanding that regional cooperation and economic integration will always require partial or total surrendering of national sovereignty to regional authorities whenever regional solutions are required to solve specific problems. The principle of subsidiarity involves a clear division of labour among the various levels. The cost and benefits of cooperation and integration should be clearly perceived and effective compensatory mechanisms put in place.
· How do I feel the AU should go about ensuring that African people are able to participate effectively in the AU?
The African integration process will not be possible without the active involvement of the populations. The most active sections of these populations have been along the years the local NGOs, the civil societies movements and activists, academics, students and the members of the Diaspora in Europe and the United States. They will be needed to keep the issue of African Union high on the agenda throughout the process. A way to achieve such aim would be to set up AU clubs linked to each other, to all sub-regional groupings and to the centre in Addis Ababa through an intra-net network.
· How can the AU institutions be made sustainable?
The sustainability of the institutions of the AU depends on:
1. their strong financial muscle in disposing of sufficient and readily available resources;
2. their capacity to be independent from political interference from any individual Member State in order to focus on general welfare and to work for the common interests of all the Members States;
3. To ensure that the costs and benefits of the process involving cooperation and integration are well understood by the participants and to set up compensatory mechanisms and policies to smooth disparities and mitigate imbalances resulting in unwarranted and destabilising migration from less-favoured to more prosperous areas.
· How can we ensure the AU can command the human and financial resources it will need?
For the AU to be able to harness the human and financial resources it needs given the derelict state of the finances of its Members States, there will be a need for:
1. a review of the Members States expenses bearing in mind Heads of States travelling in their own private jets, Ministers and Members of Parliament travelling first class, fleets of Mercedes and other expensive cars for officials, addictive consumerism of expensive imported goods, etc. A whole new culture is to be implemented to give overriding priority to meeting budget contributions. A zero tolerance policy must be applied for arrears on budget contributions. Any such occurrence should automatically lead to suspension of membership pending exclusion if the problem persists.
2. the A.U. must work to convince the International community that the development of Africa must be perceived in the same way that the USA perceived that the reconstruction of post war Europe was in the interest of the U.S.A and provided cheap money and allowed the European countries to use subsidies and protectionism in their reconstruction and union building process. It needed a long term view and the result was an unprecedented period of economic expansion and wealth creation for the benefits of the western hemisphere for over 30 years.
The USA is now running a widening trade and budget deficit. Germany and France, the locomotives in the drive for European Union are having difficulties meeting their obligations in terms of budget deficits and the Stability and Growth Pact is being questioned by Romano Prodi himself. Japan’s economy has been in the doldrums for the last decade in spite of billions of dollars of expansionary measures taken. The Bush’s Administration bomb-and-rebuild Keynesian economics can provide work for US companies but is no recipe for world-wide expansionary policy. It is only the reconstruction of Africa that can do the trick. This stand was advocated to deaf ears within the G7 by Tony Blair and Jean Chretien, the UK and Canada Prime Ministers.
Prejudice against Africa is one thing, but the costs and benefits for the International community should be clearly perceived now, mostly by the Europeans and the Americans so they can provide the financial, technical and military resources, scale down their subsidies, give greater access to their markets to African exports, increase productive investments, solve Africa’s debt problems, stop backing incompetent despots and corrupt leaders and arming warlords, allow subsidies and protectionism to take place in Africa during the AU building process for the endeavour to succeed.
· The AU Constitutive Act provides for a whole series of institutions (Assembly, Executive Council, Commission, Parliament, Economic social & Cultural Council, Court of Justice, financial institutions, etc) – do I have any thoughts on which should be given the highest priority and what the sequencing should be in the establishment of these institutions ?
The least thing that the AU needs is to be transformed into an inefficient club of Head of States, Commissioners, Members of African Parliament squandering scarce resources in useless expensive trips, window dressing meetings and making integration in Africa a purely bureaucratic and governmental matter with another failure as the end result. I think that since the AU is a reproduction of the EU, I would rather see ECDM recommending the step-by-step EU strategy towards achieving realistic goals and setting institutions on the same sequencing adopted by the EU since the signature of the Treaty of Rome in 1957.
· Where should the financing for the AU structures come from?
SOURCES OF FINANCING:
- Budget contribution from Members States;
- Borrowing : with a AAA rating the AU will be in the position to raise money in the Capital markets and issue bonds in existing African Stock Exchanges;
- Revamping the lending programmes of the Bretton Woods institutions and the African Development Bank : projects financing will be left to the private sector, structural adjustment programmes conducted by sub-regional groupings while the World Bank, the IMF, the ADB and other multilateral donors such as the EU and UNDP will provide back up loans and grants for budget assistance for schemes such as the sub-regional Clearing Houses, the Organisation for Economic Cooperation, the African Payments Union, the Compensatory mechanisms, etc;
- Greater access to African exports in the Western markets;
- Review of subsidies policies and dumping of goods in African markets practiced by the Western countries;
- Solving Africa’s debt burden,
- Return of exiled capital which was estimated by the Financial Times at $135 billion in 1991, including debt repayments, price differential between manufactured and primary goods, repatriated profits, excessive imposed reserves and flight capital. According to UNCTAD, every one dollar of net capital that enters sub-Saharan Africa is matched by a flight of 1.06 dollar out of the region. No wonder than 40% of Africa’s savings serve to finance the budget deficits of the OECD countries;
- Putting in place a mechanism tidying up the prices of African basic products and raw materials to that of industrial goods and services;
- Involving the members of the Diaspora;
- The UN might run a reformed scheme based on the Iraq oil sales for food. This time, the UN will earmark part of the export revenues of any given AU Member State for specific and defined programs or budget contributions,
- Using creative and innovative measures such as demonstrating for a company such as Microsoft the usefulness and the interest it would gain in setting up and financing the IT network linking AU clubs, sub-regional groupings and the AU center in Addis Ababa referred to in the question dealing with how to ensure effective African people participation in the AU.
. How can dependence on external or powerful interests be avoided?
In avoiding to rely exclusively on programs such as NEPAD to develop Africa which is tantamount to handing over Africa resources to Multinationals and big businesses whose interests lie in he exploitation of natural resources, petroleum and minerals in particular, perpetuating the region’s dependence and impoverishment. The “Africa syndrome” consisting of the African rulers and the elite aligning with foreign interests against the interests of their people dates back the times of slavery, went on during colonial times and is still the general practice nowadays. Let’s hope a departure from such practices in this new endeavour with regard to the AU.
5. Role of external support
. If the AU is to be genuine African institution what role should external donors, such as the European Commission, play in supporting the AU?
For the answer to this question please refer to development in paragraph 2 of the following question : “How can we ensure the AU can command the human and financial resources it will need?”
6. Role AU could play in my field
. What constructive role or useful contribution do I see the AU making in my area of work?
The Achilles’ heel of globalisation is in the formation of its money supply. Since the scrapping of the gold standard and fixed exchange rates in the early 1970s by Richard Nixon, money supply is determined by the volume of credits created to finance state, corporate and private borrowings. In this context of an unlimited amount of liquidity born out of unchecked money supply, prosperity stems from short-term economic activities fuelled by gigantic takeovers, acquisitions and mergers, and by foreign exchange and derivative trading. This economic cycle is not sustainable.
Sooner or later, the world will have to reconstruct in reversing to productive investments. In that prospect, it is worth recalling that according to the US Bureau of Economic Analysis (quoted in HSBC’s World Economic Watch, October 11, 2001) the rates of return on foreign direct investment were higher in Africa in 2000 – 19.4 per cent compared with 18.9 per cent in the Middle East, 15.1 per cent in Asia-Pacific, 8.3 per cent in Latin America and 10.9 per cent in Europe. And still in spite of delivering the highest rate of return, Africa attracted only $1.1 billion of direct inflows that year compared to $1.9 billion for the Middle East, $21billion for Asia-Pacific, $19.9billion for Latin America and $ 76.9billion for Europe.
It is my role to let the world know these facts and advocate the reconstruction of Africa as a mean to salvage the world economy. Racial prejudice and 500 years of systematic exploitation have to give precedence to economic pragmatism.
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About Sanou Mbaye (185 Articles)
Sanou Mbaye, ancien haut fonctionnaire de la Banque africaine de développement, est un chroniqueur politique et économique. Ses écrits sur le développement des pays africains proposent des politiques alternatives à celles mises en place, en Afrique, par des Occidentaux et leurs bras alliés : le FMI et la Banque mondiale.