With a commercial exchange rate estimated at less than 3% compared to a continental average of 17%, the Central African Economic and Monetary Community (CEMAC) is considered to be the least integrated zone on the continent, despite having a strong social and economic potential (1). This figure raises concerns about the effectiveness of sub-regional integration in the CEMAC zone. This paper, therefore, takes stock of regional integration in CEMAC, in particular, by identifying the factors that hinder its implementation. The aim is to draw the attention of public decision-makers to the necessity of respecting the cooperation agreements established in the zone. First, we will review the status of regional integration in Central Africa and secondly, we will present the opportunities provided by the AfCFTA for sub-regional integration in the CEMAC zone.
Status of integration in the CEMAC zone
According to the Economic Commission for Africa (2019), regional integration fosters socio-economic development through a number of factors, including the expansion of markets and the development of cooperation and trade, risk sharing, and regional stability. The criteria used to assess the performance of regional economic communities are generally based on five key points, namely: macroeconomic integration, productivity levels, trade integration, infrastructural integration, and free movement of people (2). In the case of CEMAC, the following main findings were noted.
In terms of macroeconomic integration, the region shows a good record of performance, with an average score of 0.684 (3). However, it should be noted that none of the members are signatories to existing bilateral investment treaties, so they can only be assessed on the basis of the regional convertibility of their currencies and their inflation differential, which so far looks good.
Concerning productive integration, it follows that the main productive activities are derived from agriculture. The share of agriculture in the GDP is about 25% for the whole community. Cameroon is the production hub of the zone (with the highest score of 0.871), followed by the Republic of Congo and Gabon (4). However, this zone is not diversified in terms of either agricultural products or fossil fuels, which reduces the level of intermediate imports (less than 5% of community trade).
Regarding trade integration, there are several reasons for failure. Firstly, a lack of willingness by member countries to adopt preferential trade reforms. Secondly, the failure to respect established agreements. Indeed, all countries in the CEMAC sub-region violate the institutional provisions in force. This situation, therefore, has an impact on the application of tariff and non-tariff barriers. Also, the inadequacy of legal texts to the realities of the zone, the weakness of human and financial resources, and the power of the bodies responsible for monitoring, controlling, and evaluating programs and policies. Finally, the dependence on external aid, because the countries trade more with Western and Eastern countries than with those in the same economic zone.
Infrastructural integration, on the other hand, has many problems in terms of infrastructure. There is still the delicate problem of respecting agreements. For example, the project to create a community airline has never materialized because no agreement has been reached on the legal form of ‘Air CEMAC’, nor on the identity of the private investor partner, not to mention the level of participation of the member states and even the headquarters of the future company. Another problem is the administrative bottle necks of certain states. This is the case, for example, with the construction of the road linking Yaoundé to Brazzaville via Djoum. The Congolese part of the road was completed on time, but on the Cameroonian side, work was slow and the project was delayed.
The free movement of goods and people remain an illusion rather than a reality in the CEMAC zone because it is hampered by conflicts linked to national interests. Indeed, these egoisms are fueled by a belief in a demographic invasion which, according to some, could lead to migratory movements that are harmful to certain sectors of activity (5). All this is due to the fact that legal texts are not adapted to the realities of the area, the lack of human and financial resources, and the weakness of the bodies responsible for monitoring, controlling, and evaluating programs and policies.
The AfCFTA: A boon for improving CEMAC’s sub-regional integration
According to the World Bank (2020), the AfCFTA could increase regional income by 7%, accelerate growth in the wages of skilled and unskilled workers (10.3% and 9.8% respectively), and lift nearly 30 million people out of extreme poverty by 2035. (6). In view of all these, CEMAC should position itself to benefit from this free trade area. For this to be achieved, several structural factors must be improved. These include;
- Eliminating non-tariff barriers to increase cross-border trade. This is a challenge that must be addressed by the CEMAC states in order to take advantage of the benefits of the AfCFTA. Indeed, cross-border imports between countries of the same REC in CEMAC are very low (0.2%), yet they are very high between CEMAC countries and Europe (5%) (7). According to the IMF (2019), eliminating tariffs on inter-regional trade could improve trade in the region by about 15-25% in the medium term.
- Bridging the infrastructure and logistics development gaps between countries. This is a major obstacle to the expansion of sub-regional trade and therefore to economic growth in the region. Indeed, the quality of infrastructure would stimulate an improvement in intra-regional trade flows of 7% (IMF, 2019). An improvement in the quality of infrastructure could be an indirect stimulus to trade. Good quality infrastructure has a strong implication for growth in productivity and the removal of supply-side constraints.
- Accelerating the structural transformation of economies. Accelerating structural transformation is important for several reasons. First, it promotes sectoral diversification, the development of regional value chains and industrialization, and consequently the development of economies of scale and improvement in their level of competitiveness. Secondly, structural transformation of the economy is important because it would boost manufacturing capacity, which would help alleviate the problem of supply constraints, as well as the establishment of policies and programs to train a specific workforce in sectors that can grow SMEs.
- Financing small and medium-sized enterprises. In order to reap the benefits of the AfCFTA, it is necessary to improve the level of financial inclusion in the sub-region by facilitating access to bank financing for SMEs.
In view of the above, there is no doubt that CEMAC regional integration is not yet fully effective. Several options can be considered by CEMAC policymakers to improve the level of sub-regional integration. These include;
- Increase the number of meetings between decision-makers of the sub-region for more follow-up on the decisions taken;
- Establish a sub-regional market that could benefit from the AfCFTA and improve trade with the world market;
- Apply strict corrective measures to any member state that refuses to respect the established agreements.
Dr. Hervé Ondoua
Hervé Nicanor ONDOUA, est titulaire d’un Doctorat Ph.D en Economie de Développement obtenu en Janvier 2021 à l’Université de Yaoundé II-Soa (Cameroun). Il a dans la même université obtenue un Master en Gouvernance et Développement Economique et une Licence en Economie publique.
