On 6 October 2015, the UNU World Institute for Development Economics Research (UNU-WIDER), the South African National Treasury, the South African National Planning Commission, and the South African Reserve Bank, organised the policy symposium South Africa in Africa. The symposium brought together fifty international experts representing government, the private sector and the research community to reflect on more than two decades of experience since the fall of apartheid and discuss the roles, opportunities and challenges for African economic integration.
Why is regional integration imperative for South Africa?
A key point of agreement was that regional resource imbalances can only be redressed by further coordination among Southern African Development Community economies and across Africa. Representatives pointed out that while South Africa struggles with water and energy scarcity, its neighbors struggle from a lack of market access, financial resources, and infrastructure. These problems are not inherent in the local resource structure, but an artificial function of local borders. Further, South Africa’s natural advantages are not likely to last forever and the country is already facing greater competition in service provision from within and outside of Africa. Only greater regional integration and cooperation between countries can unlock the individual potential of every country involved.
Why is regional integration difficult?
Some participants stressed the role of history in shaping regional perceptions and politics to date, leading to a difficult position for South Africa — on the one hand expected to take a leading role in economic development and on the other hand viewed as a potential predatory force on the continent.
Furthermore the pursuit of multiple domestic objectives by South Africa has often implied a degree of policy incoherence with respect to African partners. Other core challenges include a lack of infrastructure, poor local coordination, and the vested agricultural and industrial interests which can influence trade policy.
The tide of trade is turning
The effect of the 2008 financial crisis in increasing the importance of intra-Africa trade in goods and services was also highlighted. For example, in 2013 South Africa’s trade with the rest of the continent surpassed its trade with the EU, and exports of services to the continent have grown dramatically from a small base.
Despite a strong consensus among participants on many key issues, questions and challenges remain. How can political will for integration be generated in the face of those who benefit from tariffs? How will Africa’s changing demographics affect prospects for further economic regionalisation, and who will pay for desperately needed infrastructure investment?
For more information on the event, visit the UNU-WIDER website.
This policy symposium was organised as part of the Regional Growth and Development in Southern Africa project.