African Economic Institutions

Kwame Akonor

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135224578
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This book analyzes how, and under what conditions, African International Economic Organizations (IEO) have evolved, and what individual and collective contributions, if any, these African IEOs have had on Africa's socio-economic development.

Providing a comprehensive and accessible overview, the book covers the continent's main IEOs, The United Nations Economic Commission on Africa, The African Development Bank; and The New Partnership for Africa's Development as well as the five major Regional Economic Communities, including Economic Community of West African States, and Southern African Development Community.

Assessing the degree to which African IEO's have been able to chart their own course in coming up with their development agendas and priorities rather than following the lead of Global Institutions, this book:

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• Provides a descriptive and analytical overview of the historical and contemporary development blueprints produced for Africa

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• Clearly examines the contribution made by African economic institutions towards development

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• Considers whether African economic institutions are building blocks or stumbling blocks in Africa's development

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• Offers a detailed evaluation and critique of African IEOs

Enabling the reader to reach a deeper understanding of the challenges and potentials of development on the African continent, African Economic Institutions will be of interest to all students and scholars of African politics and development studies.

1
The history of African economic institutions and their development agenda

One of the main motivations behind the creation of the ECA, the ADB and NEPAD was a desire by African policymakers to have economic autonomy when it comes to managing the affairs of the continent. The following pages recount the challenges and historical record of Africa’s economic institutions. More importantly, the chapter seeks to find out if the economic independence that African IEOs so fiercely exhibited has in any way been compromised or weakened with time.

ECA

The question of establishing a regional economic commission for Africa was brought up as early as the ninth session of ECOSOC. On 11 March 1947 the delegation from India introduced a resolution calling for the establishment of a special economic commission for North Africa and Ethiopia. The Indian delegation felt that the creation of such an African commission was imperative since ECOSOC had earlier approved the establishment of the Economic Commission for Europe and an Economic Commission for Asia and the Far East. ECOSOC did not take any action on the proposal, and refused to do so again at its sessions in 1950 and 1951. ECOSOC objected to an Economic Commission for Africa then because it “thought that the establishment of such a commission would be premature, as it could be established only with the agreements of the principal governments in the area and the representatives of the governments administering the territories in Africa were not in favor of such action.”¹

The idea to establish the ECA did not feature on ECOSOC’s agenda till Ghana gained its independence from Britain in March 1957. Frederick S. Arkhurst, the Deputy Permanent Representative of Ghana to the United Nations during this period, who served as Chargé d’Affaires, recalled how little time the Ghanaian delegation had to prepare for the 12th regular session of the UN General Assembly, scheduled for 15 September 1957.² Arkhurst notes that the Ghanaian delegation was consumed with the idea of ECA and felt that there was “a great possibility of mobilizing a solid constituency of Afro-Asian, Latin American, Scandinavian and a few other delegations to support a resolution in the Second Economic Committee and in the General Assembly, to request the ECOSOC to establish a Regional Economic Commission for Africa. Accordingly, the African delegations met regularly to develop a strategy to achieve this end.”³

Together with their Asian and Latin American counterparts, the African delegation agreed on a resolution for ECOSOC, which recommended “for the purpose of giving effective aid to the countries and territories of Africa, the Economic and Social Council should give prompt and favorable consideration to the establishment of an Economic Commission for Africa.”⁴ The initial sponsors of the resolution were: Afghanistan, Brazil, Burma, Cambodia, Ceylon, Chile, Egypt, Ethiopia, Ghana, Haiti, India, Indonesia, Iran, Iraq, Lebanon, Liberia, Libya, Mexico, Morocco, Nepal, Pakistan, Philippines, Poland, Saudi Arabia, Sudan, Syria, Tunisia, Yemen, and Yugoslavia.

According to Arkhurst, when the resolution was circulated to members of the Second Economic Committee, the delegations of the colonial powers, comprising of Belgium, Britain, France, Portugal and Spain, “reacted with great consternation.” The British and the Belgians in particular tried to get the Ghanaian delegation to withdraw the resolution, arguing “that Africa did not really need an economic commission; that, in any case, the colonial powers were always available to support Africa with economic development assistance.”⁵ The Ghanaian delegation did not budge and countered that if Europe, one of the most economically advanced regions of the world, deserved and had its own regional economic commission, then so did Africa.

The colonial powers continued to question the wisdom of an ECA institution. This time they used the Committee for Technical Cooperation in Africa South of the Sahara (CCTA), which was established in 1950 by the colonial powers “to maintain links between them and their former colonies after independence, and to promote mutual economic cooperation.” The supporters of CCTA felt a need for an African forum since the UN at the time had little interest in Africa. Although CCTA was created to deal in technical matters, critics, including Ambassador Arkhurst, claimed that the CCTA was political ploy by the colonial powers to keep the UN out, to reduce the publicity given to African problems, and to “maintain their control of their African colonies.”⁶ Ghana, which by this time was the only African member of the CCTA in the UN, was again persuaded by the CCTA representatives of Belgium, Britain, France, Portugal and Spain to withdraw the resolution. They tried to impress on the Ghanaian delegation that “Africa was really two entities—North Africa and Africa south of the Sahara—and that the two entities had different problems and objectives which could not be accommodated under the same Economic Commission.”⁷ Again, the Ghanaian delegation was not moved and formally submitted the ECA proposal for debate on 21 October 1957. At the end of the debate the Second Economic Committee overwhelmingly adopted the resolution on 24 October 1957, by a vote of 70 in favor, and none against (with Belgium and the United Kingdom abstaining). The General Assembly of the United Nations, on 26 November 1957, unanimously adopted the resolution, again with Belgium abstaining.

The ECA was established in 29 April 1958 under resolution 67aA (XXV) of the Economic and Social Council of the United Nations (ECOSOC). It was one of the four regional commissions created by ECOSOC by virtue of its powers contained in Article 68(2) of the United Nations Charter.⁸ There are currently five such regional commissions.

Membership changes and mandate

Membership in early regional commissions was not exclusive to countries of a particular region. Not surprisingly, the ECA’s membership at the time of its founding in 1958 was more colonial than African, but this changed shortly after the 1960s when a majority of African states gained independence. The 1958 document specifying the ECA’s terms of reference states in paragraph 5: “Membership of the Commission shall be open to Belgium, Ethiopia, France, Ghana, Italy, Liberia, Morocco, Portugal, Spain, Sudan, Tunisia, the Union of South Africa, the United Arab Republic, and the United Kingdom of Great Britain and Northern Ireland, and to any state in the area which may hereafter become a Member of the United Nations, provided the States which shall cease to have any territorial responsibilities in Africa shall cease to be members of the commission.” Paragraph 6 in the terms of reference states that, for the territories in Africa under colonial rule, they could apply to be a part of the ECA only if the states governing them presented their application to the commission. Upon acceptance, they would become associate members of the commission—not full members. The associate members at the birth of the ECA were: the Federation of Nigeria, Gambia, Kenya and Zanzibar, Sierra Leone, Somaliland Protectorate, Tanganyika, and Uganda. Once a territory became independent, then it could apply directly for membership through the Commission and it would be a full member.⁹

As more African states became independent they put pressure on the UN General Assembly to change the ECA membership requirements. Resolution 1466 was subsequently adopted in 1959, requesting that member states of the ECA propose the participation of colonial territories.¹⁰ As a result, associate member states that were not yet independent were admitted to the ECA, including Burundi and Rwanda. From 1960 onward, more territories in Africa gained independence, and by virtue of belonging to the UN, they became a part of the ECA. So the character of the ECA became increasingly African, which prompted a review of the membership of colonial powers in the ECA. The bone of contention was compliance of colonial powers with UN resolution 1466. Portugal and Spain were targeted for not complying, and South Africa was targeted for its apartheid government. Eventually, ECOSOC, in 1963, expelled Portugal from the ECA for noncompliance with resolution 1466 (Spain had already complied at that point) and reworked the ECA’s original terms of reference to downgrade the colonial powers to associate member status, which meant that African members would have the primary say in the ECA. Non-governing territories were still relegated to associate membership. ECOSOC allowed South Africa to remain a member of the ECA, but forbade it to participate in the Commission until it changed its racial policy.¹¹

The Ethiopia-based ECA was mandated to promote the economic and social development of its member states, foster intra-regional integration, and promote international cooperation for Africa’s development. The legal framework, which is referred to in resolution 67aA (XXV) above as “the terms of reference of the Economic Commission for Africa,” provides that the ECA, like the other UN regional commissions, operate with a dual mandate: it is required to act “within the framework of the policies of the United Nations and subject to the general supervision of the Economic and Social Council” and at the same time serve its constituents, the African states (whose sovereign powers must be respected at all times). Thus, the ECA can only take action if it has the consent of the African member states, and where its policy advice is likely to significantly impact the global economy, it must submit such proposals to ECOSOC for consideration. Furthermore, the ECA must seek the approval of the ECOSOC before establishing any subordinate organs.

The ECA, which held its first session in Addis Ababa, Ethiopia, on 28 December 1958 through 6 January 1959, was given a number of tasks to assist African nations. The first of these was arranging for exchange of knowledge and experience of common problems at a technical level by means of conferences, meetings and seminars attended by experts from African countries and supported by consultations from African and non-African countries, and by arranging meetings between African leaders for the formulation of policy recommendations to governments or for negotiating multinational economic arrangements or the establishment of common institutions. Additionally, the organization was charged with increasing the opportunities for the training of African national supervisory or executive personnel through short intensive training centers and institutes. The ECA was also required to provide, through the regional advisory service and in other ways, on-the-spot assistance to the governments in development planning, public administration, trade promotion, natural resources, and development. Finally, the ECA was responsible for collecting, collating and disseminating statistical information, and the conducting and publishing of economic surveys and analytical studies.¹² Thus, the ECA was set up like a development think tank: formulating development strategies and making recommendations for its implementation, coordinating decision makers via meetings and seminars, advising governments and sub-regional organizations, performing research and policy analysis, disseminating reports and documents, and providing training and overseeing projects.

The ECA terms of reference were, however, unique in that they were drafted by Africans for Africans, and the scope of the Commission’s work was expanded to include the social aspects of economic development.¹³ The Commission was empowered, inter alia, to:

• Initiate and participate in measures for facilitating concerted action for the economic development of Africa, including its social aspects;

• Assist in the formulation and development of coordinated policies as a basis for practical action in promoting economic and technological development in the region;

• In carrying out the above functions, deal as appropriate with the social aspects of economic development and the inter-relationship of economic and social factors;

• After discussion with any specialized agency concerned and with the approval of the Economic and Social Council, establish such subsidiary bodies as it deemed appropriate for facilitating the carrying out of its responsibilities.

The ECA’s uniqueness both in terms of spirit and scope is particularly salient when we consider the ECA’s discourse on development, which will be discussed later in this chapter.

The African Development Bank (ADB)

The end of colonialism and the advent of new African leaders inspired several proposals in the late 1950s and early 1960s on how to finance the continent’s vast development projects.¹⁴ However, it was the vision of consolidating the fragmented continent of Africa in antithesis to the colonial powers, and the leadership provided by the ECA, that culminated in the establishment of the ADB. The ECA at its third session in February 1961 adopted resolution 27 (III) requesting its executive secretary to look into the feasibility of establishing a development bank for Africa. The executive secretary set a panel of experts to study the concept. The panel’s “Report on the Possibility of Establishing an African Development Bank,” which called for the speedy establishment of the ADB, was unanimously adopted at the ECA’s fourth session, held in Addis Ababa from February to March 1962, by its resolution 52 (IV).¹⁵ This same resolution created a committee of nine countries (Cameroon, Ethiopia, Guinea, Liberia, Mali, Nigeria, Sudan, Tanganyika (now part of Tanzania) and Tunisia), and charged it with the task of further research and consultations on the creation of the ADB. The committee met three times: in Monrovia (Liberia) from 18 to 22 June 1962, in Douala (Cameroon) from 24 to 27 September 1962, and in Casablanca (Morocco) from 14 to 23 January 1963. The outcome of these sessions was an ADB Draft Agreement, which was subsequently approved by the conference of finance ministers and African governments on 4 August 1963. The treaty establishing the ABD entered into force on 10 September 1964, and on 4 November 1964, the first board of governors meeting was held in Lagos, Nigeria. Mamoun Beheiry of Sudan was elected the first president of the ADB, and operations started on 1 July 1966, in Abidjan, Ivory Coast, with a staff of ten and $250 million in initial capital. Though it is permanently headquartered in Côte d’Ivoire, the ADB was temporarily relocated to Tunisia in 2003 for security reasons.

Membership and organizational changes

The goal of the ADB is to promote economic and social development through loans, equity investments, and technical assistance to its members. It is also dedicated to promoting development-related investment of public and private capital, responding to members’ requests to help coordinate development policies and plans, and focusing on national and multinational projects and programs promoting regional integration. The entire organization is called the ADB Group, and it has three components: the African Development Fund (ADF), the Nigeria Trust Fund (NTF), and the African Development Bank. The founders of the ADB intended it to be a wholly African institution, which meant it did not want any non-regional members included. In practice, however, the exclusion of non-regional members was not very practical; it ended up hampering the initial efforts of the Bank because its African members did not have much to contribute in terms of funding or expertise. As a result of these operational and financial diffi...

Table of contents

• Routledge Global Institutions
• Contents
• Illustrations
• Foreword
• Acknowledgments
• Abbreviations and acronyms
• Introduction
• 1 The history of African economic institutions and their development agenda
• 2 Structure and activities of the African IEOs
• 3 Toward a heterodox approach
• 4 African regional economic communities
• 5 Emerging issues and future direction
• Appendix 1 African Civil Society Declaration on NEPAD
• Appendix 2 Summary of African Development Bank Group activities
• Appendix 3 Directory of African economic institutions
• Notes
• Select bibliography
• Index