by Zimkhitha Manyana | Mar 20, 2023 | Blogs
Zimkhitha Manyana
The victory of Bola Tinubu in Nigeria’s presidential elections has raised concerns about the neo-patrimonial and economic ideological implications of his presidency on trade and investment in the Economic Community of West African States (ECOWAS) and the African Union (AU). Neopatrimonialism is a system of a social hierarchy where patrons use state resources to secure clients’ loyalty to the general population[1]. While neopatrimonialism and trade liberalisation[2] are not necessarily mutually exclusive, the Tinubu administration’s prioritisation of neopatrimonialism over trade liberalisation could have negative consequences for the country’s economic growth and international competitiveness.
If the administration prioritises trade liberalisation, it could increase foreign investment, expand export markets, and generate greater economic growth. This could be achieved through policies such as reducing trade barriers, streamlining regulations, and investing in infrastructure and human capital development. However, if the administration prioritizes neopatrimonialism, it could lead to the misuse of state resources, allocation of government contracts based on political loyalty rather than merit, and imposition of tariffs and other trade barriers that limit competition and impede foreign investment.
Tinubu’s victory, challenged by Nigeria’s two major opposition parties due to widespread irregularities, has raised questions about his legitimacy and ability to lead effectively. Tinubu is also visibly aged, leading to doubts about his stamina for the job. He rose to the helm of Nigeria’s ruling political party, the All-Progressives Congress (APC) thanks to personal wealth and backroom deals. He outcompeted all challengers not based on a concrete and detailed program of government, but on political horse-trading across regions and ethnic divides, patronage, and the distribution of party cash.
Tinubu seeks to sustain the public-private partnership (PPP) model of former President Muhammadu Buhari[3]. While his reputation for raising taxes and appointing technocrats is promising for international investors, his control of Lagos long after his tenure as governor has led analysts to worry that market-friendly changes will fall victim to politics[4].
Nigeria is a significant actor in Africa, representing 70% of West Africa’s GDP, and is expected to become the world’s third most populous country by 2050[5]. As such, the future of ECOWAS, the Eco currency (postponed to 2025), and the African Continental Free Trade Area (ACFTA) rests in Nigeria’s hands. The success of these initiatives will significantly impact the rest of the continent, and Nigeria’s role in international bodies such as the G20 will also be crucial.
Tinubu’s presidency must be marked by transparency, good governance, and a clear vision for Nigeria’s economic future. Nigeria cannot afford to be led by a leader of questionable legitimacy or stamina, especially when the stakes are high. To ensure economic growth and international competitiveness, Tinubu’s administration must prioritise trade liberalisation over neopatrimonialism and invest in infrastructure and human capital development. The success of Nigeria’s economy will significantly impact the rest of the continent, and as such, Nigeria has an opportunity to lead by example in its economic policies and governance.
[1] Ana Huertas Francisco, 2010, Neopatrimonialism in Contemporary African Politics, E-International Relations, https://www.e-ir.info/2010/01/24/to-what-extent-can-neopatrimonialism-be-considered-significant-in-contemporary-african-politics/
[2] Caroline Banton, 2021, Trade Liberalization: Definition, How It Works, and Example, Investopedia, https://www.investopedia.com/terms/t/trade-liberalization.asp#:~:text=Trade%20liberalization%20is%20the%20removal,as%20licensing%20rules%20and%20quotas.
[3] Ronald Adamolekun, 2023, #NigeriaDecides2023: Atiku, Obi plan aggressive economic liberalisation while Tinubu, Kwankwaso want moderate reforms, Premium Times, https://www.premiumtimesng.com/news/headlines/583831-nigeriadecides2023-atiku-obi-plan-aggressive-economic-liberalisation-while-tinubu-kwankwaso-want-moderate-reforms.html
[4] Rachel Savage, 2023, Investors hope Tinubu’s Nigeria presidential poll win heralds reform, Reuters, https://www.reuters.com/world/africa/investors-hope-tinubus-nigeria-presidential-poll-win-heralds-reform-2023-03-01/
[5] Atlantic Council experts, 2023, Experts react: As the ruling party’s Tinubu wins a contested election, what’s next for Nigeria? https://www.atlanticcouncil.org/blogs/new-atlanticist/experts-react-as-the-ruling-partys-tinubu-wins-a-contested-election-whats-next-for-nigeria/
by Zimkhitha Manyana | Oct 3, 2022 | Blogs
In Africa, regional economic communities (RECs) are known as the ‘building blocks that integrate Member State (MS) economies into an eventual African economic union – according to the Lagos Plan of Action for the Development of Africa (1980) and the Abuja Treaty of 1991. Regional initiatives have advanced economic and political objectives, bolstering the African Continental Free Trade Area’s (AfCFTA) aim of economic inclusion. RECs’ actions have articulated numerous rewards for more domestic and foreign direct investment (FDI), which have brought continental reforms such as stabilisation, market policy, and liberalisation to increase public and private investments. The East African Community (EAC) is one of the African Union (AU) recognised RECs and a building block of the AfCFTA.
The EAC was formed when Kenya, Tanzania, and Uganda signed a treaty in July 2000. Rwanda and Burundi joined in 2007, while South Sudan became the sixth member in August 2016. After submitting Instruments of Ratification on the Treaty for the establishment of the EAC to the EAC Secretary-General on 11 July 2022, the Democratic Republic of the Congo (DRC) officially became the community’s 7th full member[1].
The overall EAC goal is for the seven countries to form a new independent entity called the East African Federation (EAF). The mooted EAF, which would likely be headquartered in the Tanzanian city of Arusha, which would most likely serve as the proposed state’s capital, would be home to approximately 300 million individuals scattered across a territory of 4.8 million square kilometers. According to the Africa Regional Integration Index (ARII), which measures the EAC’s regional integration in five dimensions—trade, productive, macroeconomic, and infrastructural integration, and free movement of people—the region performs best on the free movement of people, but macroeconomic integration is not far behind[2].
However, with the inclusion of the DRC and possible extension of membership to Somalia, vast and challenging geopolitical, regulatory, and economic repercussions have been raised. On the one hand, the DRC stands to greatly accelerate its development, which is battling political turmoil and military incursions from neighbouring states. Through interventions already in place to mitigate these challenges by MS that have signed a troop deployment agreement indicating the official deployment of soldiers to confront rebels in the country’s east along with other interstate interventions.[3]
On the other hand, this may hinder the proposed EAF’s political and economic stability prospects for the region. Also worth noting is that if Somalia is admitted, it would become the bloc’s fifth-biggest state, behind South Sudan, Kenya, Tanzania, and the DRC. However, with a population of 16 million people and a GDP of $7.29 billion according to World Bank estimates, it remains to be seen what Somalia will bring to the table.[4]
Integration to Support Economic Growth
The COVID-19 outbreak, increasing state debt, intensifying inflationary pressures, declining tax collections, and currency depreciation have only exacerbated circumstances the EAC, where problems have been escalating for more than a decade.[5] The region is also confronted with enormous economic issues, many of which have impacted the rest of the globe in the current year. Russia’s conflict in Ukraine, for example, has huge repercussions for East African nations, notably Rwanda, Tanzania, and the DRC. These states buy more than half of the grain their populations consume from Ukraine and Russia. Rwandan Finance Minister Uzziel Ndagijimana stated that the resultant price rises in food imports have already accelerated inflation and hindered the country’s economic progress.
EAC and other African nations are working to maximise the economic advantages of integration. It has already created a free-trade zone. A common external tariff (CET) would impose a standard levy on imports sold in any EAC member state. This tariff has risen to 35%, which some believe is excessively high during high inflation. EAC Secretary General Peter Mathuki notes that the new CET would encourage local manufacturing, value addition, and industrialization. Sustainable economic development also seems to be a priority. The EAC presented a Regional Bioeconomy Strategy in late June 2022 that allows member states to leverage the region’s vast natural resources, including underutilised agricultural waste materials, to produce value-added products for food, health, energy, and industrial goods.
Recently, Kenya’s political and economic dynamics under newly elected President William Ruto has focused on the projected future of the EAC. Uganda’s President Yoweri Museveni has been the most vocal supporter of the EAC Federation, and in the last two years, he has been joined by Kenya’s departing President, Uhuru Kenyatta. It will be important to assess whether Ruto will be as strong a proponent of the EAC’s federation status.
Unquestionably, regional integration consolidation is advancing, although maybe more slowly than some had hoped. Nonetheless, there is optimism that these seven countries, with their rapidly expanding economies, will be able to confront the long-standing issues facing the region via economic growth and development. The growth of Africa’s actual economic might remain an alluring possibility.
[1] Johnson, M. (2022) The East African Federation: A potential new economic superpower looms, International Banker, https://internationalbanker.com/news/the-east-african-federation-a-potential-new-economic-superpower-looms/
[2] African Regional Integration Index (ARII), (2022) EAC: East African Community, https://www.integrate-africa.org/rankings/regional-economic-communities/eac/
[3] The Independent, EAC, DR Congo sign agreement to deploy joint regional force, https://www.independent.co.ug/eac-dr-congo-sign-agreement-for-deployment-of-joint-regional-force/
[4] Musoke, R. (2022) Somalia bids to join East African Community, The Independent https://www.independent.co.ug/somalia-bids-to-join-east-african-community/
