Provision of Loans: Internal lending becomes easy because of trustworthiness. It is also easy to get foreign loans, financing bodies and it is easy to lend organised bodies than a single country.
Wider market: African countries are very small in terms of population thus regional cooperation helps in creating large markets for African states.
Joint development: Regional cooperation helps in bringing all resources together for joint development purposes. Therefore, the small African states with a small resource base stand to benefit greatly with such integration.
Raising capital: African countries have got very small capital. It is only through regional cooperation or integration that they even mobilize the scarce capital resources for joint economic projects which would be very expensive if one single county tried.
Attraction of investors: Large markets created by regional economic grouping attract foreign investment. Foreign capital investments are also of the major prerequisites for industrial development in Africa.
Specialization: Regional economic cooperation fosters specialization and avoids wastage of resources especially in industry.
Access to sea ports: Regional economic cooperation among states can help landlocked countries like Uganda, Rwanda, Burundi, etc to get free access to the sea.
Reduces dependence: Economic cooperation in Africa can assist in reducing dependence on developed countries for the manufactured goods for example with PTA, Uganda can purchase tractors easily from Zimbabwe than from Europe. It can also purchase transformers at cheaper costs from Tanzania than from Europe.
Fighting natural hazards: With economic cooperation, it becomes easy to fight natural hazards such as water hyacinth.
Impetus to agriculture: A wider market for agricultural projects may improve on agricultural production efficiency and promotes agricultural development. Countries with different climatic conditions can consume goods from other areas.
Common currency: Countries adopt a common currency, which enables the smooth running of trade.
Removal of Trade barriers: Economic cooperation helps in increasing the volume of trade among member nations. Commodities are free to move from one country to another without any barrier.
Reduces economic imbalance: Economic cooperation can assist in removing economic imbalance between member nations. Poor nations within the group are in a position of benefiting from the resources of richer member nations.
Political relationship: Regional economic cooperation can help in promoting good political relationships between member states.
Joint research: Allows member countries to conduct joint research so as to discover more at a low cost.
DISADVANTAGES
Low quality goods: Countries may be compelled to buy commodities of poor quality within the region instead of importing better ones from elsewhere.
Different political ideologies: Different political ideologies among member countries pose big problems in the smooth running of the affairs of the cooperation.
Differences in policy: Different foreign policies of member countries make it difficult to harmonize common external tariffs.
Production of same goods: Most countries produce almost the same commodities. Therefore, there is need to trade with developed countries.
Unequal development: May lead to uneven distribution of industries for example in the EAC, Kenya acquired many industries and the social infrastructure at the expense of Tanzania and Uganda.
Political instability: In case political upheavals occur in the country, people are left to suffer because they may not have own industries.
Loss of revenue: Countries tend to loss revenue, which would be earned, from custom duties and tariffs. With economic co-operation, these are eliminated.
Political differences: Some leaders in the same regional grouping may not co-operate. Sharp disagreements and criticisms may lead the group to collapse.
Colonial Legacy: Different colonial backgrounds make economic co-operation difficult because there still exists neo-colonial links. This was experienced among the Ecowas member countries.
Dominance: The more powerful states may tend to dominate group. A good example is the influence of Nigeria in the Ecowas member countries.
What methods have independent African states employed to minimise the problem of dependency?
How to answer the Question. Define dependency. Analyse the various ways in which independent African states have tackled the problem. Tense must be respected. Points to consider
Dependence involves a state relying on another for assistance e.g financial, military, technological and other forms of assistance. Most African countries have continued to depend on donations, grants, expatriates, etc. Nevertheless they have tried to minimize such dependency by putting in place some measures as discussed hereunder.
1. Several African countries have embarked on economic integration. This has taken the form of establishing economic groupings e.g the EAC, ECOWAS, SADC, PTA, etc. With these bodies, interterritorial trade has been promoted to overcome reliance on foreign markets.
2. Privatization has taken strong roots in various states. This has encouraged more private economic establishments to come up hence increasing the volume of locally produced goods. Privatisation has also encouraged efficiency and increased production; corruption has been somehow dealt with. Privatisation has been encouraged in Kenya, South Africa, Uganda, etc
3. Educational reforms have been undertaken. The education system has been reformed in order to produce local skilled labourforce and better entrepreneurship and to promote research. E.g provision of UPE in Egypt during the } 952-70 revolution, Uganda starting 1997, Kenya beginning 2003; there has been establishment of technical institutions in many countries e.g Uganda etc.
4. Economic diversification has boosted the African economies. African states have attempted to create various economic activities to overcome dependency on agriculture, which makes them compete for foreign markets. For example, in Gabon, apart from agriculture, there is mining and forestry, in Uganda; there have been constant calls by the government to embark on industrial production.
5. Market research has been carried out. This has been geared towards export market diversification to minimize dependence on one foreign market. In Kenya, eg, the tourism industry has been advertised world wide through the supply of magazines containing wildlife, use of the Internet, television, establishing tourism offices in various foreign cities etc. In Uganda, president Museveni himself took foreign journalists around Uganda's tourist centers to sell the country's tourist potential.
6. There has been agricultural development. The aim has been to increase food supply so as to attain self-sufficiency in food production e.g, in Egypt, South Africa, Sudan (Gezira irrigation scheme), Uganda (Mubuku irrigation scheme) etc, there is irrigation farming which has encouraged food production during dry seasons. Many African countries have adopted strategies e.g the Plans for Modernisation of Agriculture (PMA) in Uganda, ministries of agriculture in various states have been strengthened, etc.
7. Import substitution programmes have taken roots in Africa. Industries have been established to produce goods locally and therefore reduced dependence on imports e.g in Kenya, industries for food processing, beverages etc have been set up.
8. Emphasis has been put on mineral prospecting. This has involved surveying opportunities to exploit mineral resources and reduce dependence on foreign resources. In Uganda, there has been mineral prospecting on lake Albert (oil) and Karamoja (Gold). Once mining takes place place, much foreign exchange will be saved.
9. Political stability has been encouraged. Political instability has been one of the major causes of dependence; it leaves affected states in economic and social crises. African sates have therefore attempted to create stability e.g through democratic change of government like in the presidential elections in Uganda (1996,2001, 2006) in Kenya (2002) and Nigeria (April 2003), in DRC the peace process is bearing positive results, etc.
10. Export promotion programmes have been encouraged. Most African states have aimed at increasing the volume of exports so as to earn more foreign exchange and reduce dependence of foreign aid. E.g, Uganda has joined the AGOA scheme to export clothes. South Africa exports Benz [vehicles] to USA. Liberia has made efforts to increase the quality other rubber and hence increase its exportation etc.
11. Population growth control measures have been undertaken. A big population increases the demand for consumer goods; many African countries have taken measures to reduce the population, eg in Nigeria and Egypt through establishing family planning associations
12. Seeking internal borrowing has been a further step. African states have at times borrowed money from local business tycoons so as to avoid depending on the foreign donor community. The African Development Bank was also established by OAU to act as a financial resource for African states
13. Fighting corruption has been the order of the day to ensure maximum benefit from foreign aid; ie if money is not swindled, it can be put to developmental activities. The income generated from these activities could therefore be used not only to clear debts but also to be ploughed back in other activities. Uganda, e.g has instituted Commissions of Inquiry into public offices, the office of the IGG was been put in place and probably that is why its position among the corrupt countries has reduced. In Kenya, the current government of Mwai Kibaki has come in vigorously to probe corruption tendencies of the previous regime; Mwanawasa's government in Zambia has tried the former president (Chilluba) for mismanaging public funds.
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