Press Release
Prospects of an African Economic Union Focus of Congressional HearingExamines potential benefits for U.S., Africa
Efforts to create an African Economic Community to promote development and overcome poverty and weak economies—and to examine the potential benefits for Africa and the United States—were the subject of a hearing held Thursday by Congressman Chris Smith (NJ-04), Chairman of the House congressional panel that oversees U.S. policy in Africa.
The African Union (AU) is in the midst of creating an African Economic Community through the eventual merging of existing Regional Economic Communities. U.S. policy is to support regional integration in Africa as enhancing the success of U.S.-Africa trade by reducing trade barriers and creating larger markets. “A focal point in U.S.-Africa trade policy is the encouragement of integrated markets in Africa,” Smith said. “It makes trade with Africa more efficient and beneficial for African businesspeople and governments. It also is more attractive for foreign investors. “Varying languages, conflicting legal and commercial systems and often incompatible transportation infrastructures make this worthy goal a major challenge, and there are other obstacles that make this effort even more daunting,” said Smith, who is the author of H.R. 1777, “The Increasing American Jobs Through Greater Exports to Africa Act of 2013.” The bill was recently passed by the Foreign Affairs Committee. “The example of the European Community demonstrates the difficulty even when involving developed nations.” Click here to read the chairman’s opening statement. “Will there be an African Economic Community?” was the title of the hearing of the Committee on Foreign Affairs’s Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations. Featured witnesses with expertise in the fields of African policy and trade, were: Amadou Sy, Ph.D., Senior Fellow for the Africa Growth Initiative at The Brookings Institution; Stephen Lande, President, Manchester Trade; Peter Quartey, Ph.D., Senior Research Fellow, Institute of Statistical, Social and Economic Research, University of Ghana, and; Witney Schneidman, Ph.D., Nonresident Fellow, Africa Growth Initiative, The Brookings Institution. “Promoting regional integration will enhance the regional markets of African countries; it will promote trade in the sub-region; and it will facilitate peace and security,” said Quartey. “Attempts to strengthen these communities have to meet several challenges, however, and therefore require the support of the United States and its allies. This assistance will go a long way in enhancing personal livelihoods, reducing civil strife, promoting peace and stability in the region, and fighting terrorism and organized crime.” Lande said that regional economic communities (RECs) are effective at promoting regional integration. “Just visit any African international airport and observe the special queue to facilitate entry of citizens from countries that share REC membership with that country,” Lande said. “Note the blue berets operating… to maintain peace and democracy in a West African country. Experience an almost seamless road trip on the corridor linking Mozambique with South Africa. Intra-Africa trade totals are up four fold, but look at intra-REC membership numbers and these are even higher.” Sy testified that, “In spite of its remarkable economic performance over the past decade, Africa needs to grow faster in order to transform its economy and create the resources needed to reduce poverty. Over the past 10 years, sub-Saharan Africa’s real GDP grew by 5.6 percent per year, a much faster rate than the world economy, which grew by 3.2 percent. At this rate of 5.6 percent, the region should double the size of its economy in about 13 years. However, Africa remains vulnerable to both internal risks such as armed conflicts and external risks such as volatile commodity prices. More importantly, this rate of growth still hides important disparities among countries and falls short of the level needed to achieve the structural transformation that countries such as China have achieved.” Schneidman said, “Will there be an African economic community? It is not possible to know precisely when or if the eight regional economic communities that are recognized by the African Union will fully integrate into one. After all, the Abuja Treaty of 1991 envisioned the establishment of an African Economic Community by 2028.” To read the witnesses testimony, or watch the hearing, click here. |