An interview with H.E. Mr Erastus Mwencha, Deputy Chairperson of the African Union Commission

11 December 2010

What are in your view the main challenges and drivers for regional integration in Africa? How can the AUC best support the Regional Economic Communities and the pan-African integration process?

From a supra-national level, the context is such: a continent regrouping one billion people in 53 markets. Opportunities are obvious given the resource endowment of African markets and economies. We therefore believe regional integration is the key to give life to these opportunities and enhance their scope. Regional integration will also lead to economies of scale, which will in turn generate growth. We believe in our capacity to generate this momentum for growth.

We are also aware of the current impediments. One of the main bottlenecks to regional integration is the poor quality of infrastructure, which makes it difficult to interlink and connect regional markets. The second impediment we identify is the lack of what I would call "tradeables." Not only do most African countries produce mainly primary products, but they also produce similar goods. As a result, creating intra-African trade becomes a challenge. We have identified how we can overcome this problem, namely through value addition. At the moment, we export primary products and we see these products being re-imported in the continent as finished goods. We want to produce goods with more added value. Finally, the third impediment has to do with peace and security. No investor wants to invest in an environment in which his investment cannot be secured.

This said, one should acknowledge that Africa has made a lot of progress in that area. In the last ten years, conflicts have been reduced almost by half and there has been emphasis on the importance of governance to fight corruption and thereby create a readable environment for investors. Another difficulty is that, in the eyes of external observers, each single member state represents the whole of Africa and what one member state is doing is often externally seen as what "Africa" is doing. The image of Africa is "country X," and that "country X" is seen as Africa. There are countries in Africa with high growth rates and with excellent performance but these countries are not standing out to the general public.

Against this background, the African Union has been active in many areas. First, we have been at the forefront in international fora to tackle the crucial question of debt, since with a less heavy debt burden, countries will perform much better. Secondly, our focus has been on peace and security, with the objective of creating an enabling environment for development, i.e. an environment conducive to growth and investment. The AU has put in place a peace and security organ that is robust. And I must say that here we are working very well with the UN Security Council and the European Union to strengthen it. The third area in which we have focused our efforts relates to infrastructure. The AU has already put in place the Program for Infrastructure Development in Africa, which is a very solid programme with clear priorities and projects identified. We are now looking at how to mobilise the resources from both the public and the private sectors to invest in infrastructure so that the interconnectivity of markets is ensured. Finally, Africa is also a place with issues of poverty. So the development of sectors like agriculture (with initiatives such as the CAADP) is critical to address the issue of poverty and empower the population to increase the consumables in Africa.

The G20 summit in Seoul committed "to support the regional integration efforts of African leaders, including by helping to realise their vision of a free trade area through the promotion of trade facilitation and regional infrastructure." What kind of concrete support and initiative do you expect?

The EU has the capacity to help us strengthen the Programme for Infrastructure Development in Africa and I would like to thank the G20 for recognising and acknowledging the importance of trade facilitation and infrastructure. As mentioned earlier, poor infrastructure is one of the main impediments to regional integration in Africa.  The fact that this could be recognised -- thanks to the Prime Minister of India who was leading that process and thanks to the G20 leaders who also accepted that principle -- is definitely a good thing. But what we now need is more innovative and ambitious instruments for infrastructure. We keep repeating that Official Development Assistance (ODA) is not enough. Africa is talking about US$90 to 100 billion to modernise infrastructure on an annual basis. Africa is raising nearly half of that amount from within the continent itself. But the rest cannot be expected to come from ODA. We are aware of the challenges that Europe and other countries are facing! Therefore, we need to see how we can leverage ODA funds to increase capacity for private-public partnership so that Africa can develop a really vibrant infrastructure sector.

Although not directly involved in the negotiations, the AUC was mandated by African heads of state and government in the Maputo Declaration of 2003 to coordinate EPA negotiations. What has been the role of the AUC in this process and how effective is it, notably in evaluating strategies for the way forward on the EPA negotiations?

This is an extremely important issue at the moment, because we believe in trade as an instrument for development. We believe that trade has the capacity to help us move away from poverty and bring about rural development. As you mentioned, the AU is not directing the EPA process. If we look at the last ten years, we must admit that not much progress has been made in terms of completing the negotiations. The reason is that there are fundamental issues that have not been adequately addressed. I would classify them in two categories.

The first one relates to the fact that the link between trade and development has been neglected. Even when the EU is talking about Aid for Trade, the  development component remains absent. Yet, that component has always been the call of African countries. One should not look at trade as an end in itself, but at trade as a means that could bring about change in terms of competitiveness, productivity, value addition and capacity to transform economies. The capacity to trade is also an important element that should be looked at.

The second aspect is the fact that there are some contentious issues in the EPAs that simply contradict the philosophy that is espoused even by the EU. We are both talking about tackling poverty, yet we can see in the EPAs some elements that go against this aim. Just to give you an example: the MFN clause. Why would one want to add it? And it is not the only example. One could indeed similarly question the standstill as well as the non-execution clauses. There are many contentious issues and the EU continues to say "let's be flexible." When it comes to the scope of liberalisation in the context of  EPAs, for instance, the EU insisted when we started the negotiations on an interpretation of "substantially all trade" that covered 90 percent of total trade between the parties. But this definition can be flexible and flexibility can make a substantial difference in some countries, as some weak industries need some time to be nurtured. Moreover, in some of the sectors, like agriculture, Europeans provide subsidies to their farmers, and if the African side is not allowed to have safeguards, it becomes difficult to cope.

At the moment, the EU is providing duty-free, quota-free access to its markets (DFQF) to LDCs. Now, if you ask LDCs to sign a comprehensive EPA, which will generate revenue loss, without putting in place a compensatory mechanism to address EPA-related costs, they might of course be reluctant. These are some of the things we need work on so that we can move forward.

But these issues have been contentious for quite some time now; they have been subject to negotiations at least since the conclusion of the interim agreements in 2007. It has been three years, and we have not seen much progress. So how can we move forward?

The answer is very much in the court of the EU. At the recent Africa-EU summit, Africa has again raised its concerns. The EU promised to look at flexibilities in the mentioned areas; resolving some of the contentious issues would be a way forward.

You mentioned the recent Africa-EU summit that took place in Libya on 29-30 November. What are the key concerns that the AU raised at this event and how do you assess the EU's response to those?

We have clearly progressed since the first Summit in Cairo. This third summit has come up with specific objectives and timeframes and has identified responsibilities. We do recognise, however, that there has been more programming than concrete results. We need concrete outcomes, so that Africa can achieve the MDGs, so that Africa can achieve growth and so it is able to address the challenges of employment and investment. In many aspects, it is already doing so.

You have mentioned at the beginning of this interview that the actions of a single country often represent the actions of the whole of Africa. There is therefore one question we cannot avoid in view of the recent news and it of course concerns what is currently happening in Côte d'Ivoire. What is the position of the African Union in this respect? Is the post-election situation in Côte d'Ivoire shedding bad light on Africa?

Right now our priority is to ensure that we do not allow the situation in Côte d'Ivoire to degenerate in a civil war and that the will of the people is respected.

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