Sub-Saharan Africa has demonstrated comparable inventiveness to other regions in developing regional and continental institutions, both sector-specific and comprehensive. For a long time, these groupings, despite their different characteristics and approaches, have even appeared, on the continent and in the view of major donors, as a stimulus and an essential way for the implementation in their member countries of the reforms and changes, often difficult, for economic and social development. The steady deepening of economic ties between Kenya, Uganda, and Tanzania has fostered growth among the founding members of the East Africa Community (EAC). The launch in 1989 of the Banking Supervision of the West African Monetary Union (WAMU), by modifying and enhancing the control of all commercial banks in this area, played an important role in the construction of a healthy and efficient banking system. Since the end of the 2010s, however, various issues have disrupted these positive trends in many places. The following four examples show the convergence of these difficulties.
In East Africa, and after an uncertain beginning, the EAC has become a force of attraction for many countries since the 2000s. The three founders – Kenya, Uganda and Tanzania – have indeed set up a common and suitable environment to the expansion of their respective economic activities: free movement of goods, labour and capital in the EAC; a customs union designed to regulate external trade; and privileged cooperation with other areas such as COMESA and SADC. Their demographic weight and the pragmatism of their policies have also encouraged the emergence of solid sectors, including industrial sectors, stimulated by Kenya’s success and the strength of economic and financial relations within the zone. It has therefore gradually expanded to the Great Lakes (Rwanda and Burundi), South Sudan and, more recently, to the Democratic Republic of Congo (DRC) and Somalia, bringing together English-speaking and French-speaking countries as a result. The EAC is thus now one of the most populous and extensive sub-Saharan communities – more than 350 million inhabitants to date, including the giant DRC. It is also a major economic entity: more than current USD 350 billion in Gross Domestic Product (GDP) at the end of 2024 and 3 times more in Purchasing Power Parity (PPP), with Kenya ranking 7th in the continent’s GDP; a great potential in renewable energy already remarkably implemented in Kenya.
However, the EAC faces notable weaknesses. Some are economic. The delay in major critical projects, such as regional transport infrastructure adapted to its size or a closer coordination of economic policies facilitating a harmonious development of the area, slows down the progress of structural reforms. The postponements for a common currency’s target allow the fragility of national currencies to persist, whose frequent depreciations are penalizing. The uneven development levels and economic structures of newly admitted countries make it harder to equitably share the benefits of the union among members. But political questions seem to become more dangerous; South Sudan has long been in a latent civil war; political and social tensions are taking on a worrying dimension in Kenya. Above all, the confrontation between the DRC and Rwanda, over political as well as economic contests, has reached a scale that could disrupt the functioning of the EAC institutions and affect other members such as Burundi. Efforts by the regional community to resolve the crisis have so far been unsuccessful and the US intrusion into the issue could generate further complications. A prolonged deterioration of this conflict would be a halt to 25 years of progress.
The Economic and Monetary Community of Central Africa (CEMAC in french) differs from the EAC in at least three ways. First of all, it is more modest in size: smaller area , less populated – nearly 65 million inhabitants only in 2024 – and less powerful – with a global GDP of about 115 billion current dollars, close to that of Kenya. At the economic level, it is characterized by the large domination of the oil and gas sector in the GDP and exports of four of the six members: this specificity was initially an important advantage for the growth and public finances of the Union’s members, but it has long since become a significant handicap because of the ups and downs in the prices of these products. Finally, in its composition, the zone appears to be a priori more homogeneous. Five of the six countries of CEMAC have been united since their independence by their Francophonie, by traditionally strong relationships with the former colonial power and by their common currency, the CFA franc. Like its twin structure in West Africa – the West African Economic and Monetary Union (UEMOA in french) – it has undergone several changes under different names with the aim of strengthening this community of states and broadening its responsibilities: the monetary union, materialized by the common currency and a single Central Bank, has evolved into an economic union with ambitions of harmonization of public policies and growth and modernization of the economies.
However, CEMAC has not been able to take full advantage of these institutional assets. The effective implementation of community decisions aimed at fostering economic and social progress has often been significantly delayed – or even obstructed – by national priorities taking precedence. Thus, two stock exchanges – Douala and Libreville – coexisted for more than a decade before merging in 2019, postponing the effective mobilization of domestic savings. Similarly, the free movement of people in the Union, decided in 2013 and ratified in 2017, did not fully enter into force until 2025 and still faces obstacles. The competition for leadership between Cameroon – the most powerful and the most populated – and several other nations – much less populous but with a higher average per capita income – makes it more difficult to take decisions on ambitious objectives for the Union and, above all, to achieve them in the service of businesses and populations. This probably explains the low attractiveness of the CEMAC, which only saw the entry in 1983 of Equatorial Guinea, attracted by the solidity of the CFA franc. It also sheds light on the slow pace of a coordinated diversification of national economic systems, which is the only way to reduce the Union’s heavy dependence on foreign countries and sectors with uncertain prospects. The modest growth of the Community’s GDP over the past few years is a direct consequence of this. Finally, the lack of political turnover – two Presidents have been in Office for more than 40 years and another for nearly 30 years – does not favour desirable structural reforms. The 2023 coup in Gabon has shown the limits of this political stability, at least in part due to economic and social failures.
(To be continued on August 1rst)
Paul Derreumaux